Industrials : Alstom
In 1974, France’s SAFRAN (formerly called SNECMA) and General Electric (GE) created CFM International an equally-owned joint venture for producing turbofan engines for commercial jets. These world best-seller turbofans power a large number of commercial jetliners built by both Airbus and Boeing, in particular the A320 and 737 families of short/medium-range twinjets. In July 2008, the two engine-makers signed an agreement renewing their successful partnership until 2040.
SAFRAN, in which the French state has a stake of 22.4%, and GE are now developing an engine of the future called LEAP which will reduce fuel consumption, nitrogen oxide emissions and noise when compared to the present day engines. 6000 of these engines have already been ordered to date.
In June 2014, the France-GE relationship took a new dimension, this time in the energy sector. GE’s CEO Jeffrey Immelt got the agreement of the French government to buy outright, the gas and part of the steam turbine businesses of French engineering giant ALSTOM.
In the agreement, GE pledged to respect France’s control of its nuclear assets. This means that though GE will enter into an equally owned joint venture with ALSTOM where steam turbines for nuclear power plants are concerned, France will have the right of veto in the safety and technology area. In addition, patents for ALSTOM’s powerful ‘Arabelle’ turbine, used in third generation EPR nuclear power plants in France, the UK and China, will belong exclusively to the French company.
There will also be two other GE and ALSTOM 50/50 joint ventures in renewable energies (hydropower and offshore wind) and grid businesses.
GE pledged that most of the combined operations will have their global headquarters and decision-making in France. GE also promised to create 1000 new jobs in France over 3 years.
The French government will take a 20% stake in what will be left of ALSTOM after the GE deal, which is mainly the transport business. This includes France’s iconic bullet train forerunner, the TGV.
Sources : Wall Street Journal, Financial times
Video link : https://www.youtube.com/watch?v=MIbbu9PLWRQ
Online publishing, August 20th, 2014