Hollande reaction to GE bid for Alstom is “a disgrace”

The French government’s reaction to GE’s proposed takeover of Alstom has been “a disgrace” according the chief economist of French insurance giant Axa.

Eric Chany said President Hollande was more concerned about “protecting the flag on the company” than he was about creating job security and cutting unemployment in France.

Last week, Hollande has said that GE’s €12.3bn offer for Alstom was neither sufficient nor acceptable. France Alstom

In what some observers called posturing, Hollande said the GE offer must be improved on jobs, highlighting fears that the buyout could result in significant job losses in France, which already suffers a record high unemployment rate of 10.4 per cent.

The French government has previously suggested that it would want Alstom’s headquarters to remain in France, which would help avoid job cuts or outsourcing.

But Alstom chief executive Patrick Kron said “the combination of the very complementary energy businesses of Alstom and GE would create a more competitive entity” and added that Alstom’s staff would “join a well-known, major global player, with the means to invest in people and technology”.

Speaking to BBC Radio 4’s Today programme this morning, Chany said that France “needs to have foreign investors – and that of course includes foreign companies – investing in this country”.

“The way the government has reacted to the friendly approach from GE to Alstom is just a disgrace. Because that means that looking forward, investors will in the end consider that France is not a place that you want to be.”

He said the French government “should welcome this kind of offer”.

“I think you have to think about what is the real goal of managing the economy. Is it to have people having jobs, is it to have unemployment down to five per cent, or is it to protect the flag on the company?

“I think the real goal should be to have unemployment down to five per cent and not to protect the flag on the company.”

He said that while there were some industries that were of national strategic importance, such as defence, “energy products are extremely important for the global economy, not just for France”.

He added: “I would tell President Hollande, ‘focus on the labour market. Think about jobs, not about the flag’.”  

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