France will fine General Electric Co. 50 million euros ($57 million) for creating fewer than 3 percent of the jobs it had promised as a condition for getting the green light to take over Alstom SA’s energy business in a deal that stirred political controversy.
The Boston-based company added a net of 25 jobs over the past three years compared with the 1,000 it had pledged, French Finance Minister Bruno Le Maire said in a statement Tuesday. The money will be put into a state-operated fund designed to foster industry, and GE plans to develop renewable energy operations in France, he said.
The fine is the latest reminder of how GE’s takeover of Alstom’s energy business soured. The problems in France exacerbate woes at home for the 127-year-old company being dismantled following the ouster of two chief executive officers in quick succession and a plan to cut 12,000 jobs worldwide in its troubled energy branch.
The GE-Alstom deal was touted by then-CEO Jeffrey Immelt as a win-win for the two companies and for France. Yet, it has left a bitter taste all around, with former GE CEO John Flannery calling the purchase “very disappointing.” Last month, a former Alstom executive grabbed headlines in France after alleging in a book that the French company’s corruption-related legal woes in the U.S. were used to force the deal through.
GE employs about 16,000 people in France including in renewable energy and health care. The government on Tuesday said it has created 3,000 jobs and invested almost 1 billion euros in the country during the past three years.
Demand for gas turbines collapsed not long after GE completed the takeover, as clean energy became more affordable. Orders for services later crumbled as well, in part because of upgrades that reduced outages and extended turbines’ life.
Bloomberg | February 5, 2019