Alstom to Cut Up to 200 Jobs

By Inti Landauro 

PARIS-- Alstom SA said Tuesday it plans to cuts jobs at two facilities in France and Spain as the engineering firm adapts to a weaker market for rolling stock.

The French group, known for its iconic TGV superfast train, plans to cut slightly fewer than 200 jobs at its rolling-stock manufacturing unit in Barcelona and roughly the same number at the headquarters of its train unit in Saint-Ouen, just outside Paris, a spokeswoman said.

The company has already begun consulting labor unions about the cuts, she said. She didn't specify how many workers will be laid off and how many will be relocated to other company divisions.

"The job cut is related to the need to adapt to the current situation of the market," she said. The planned job cuts are in addition to 1,300 job cuts announced by the company five months ago as part of a plan to slow cash burn.

Alstom, which also manufactures equipment for power plants, unveiled a plan last November to cut EUR1.5 billion ($2.07 billion) in costs through job cuts and other measures. The company also plans to raise between EUR1 billion and EUR2 billion by selling a minority stake in its flagship train business and other assets.

Two months after announcing these measures, Alstom cut its cash flow and profitability forecast, resulting in its share price falling to a nine year low, though it has since rebounded modestly.

Alstom is grappling with big cutbacks in capital spending by Europe's utilities, amid slack economic growth in the region. Less vibrant growth in emerging markets has also trimmed demand for Alstom's power turbines and equipment used to connect power stations to the grid.

On top of that, Alstom has problems of its own. It turns relatively little of the orders it gets into cash, a handicap in the capital-intensive energy-equipment and train-making sectors. Its main competitors such as General Electric Co. and Siemens AG of Germany have had fewer problems during the downturn because of their sheer size. Alstom's products are more exposed to cut-price competition from Asian rivals.

Write to Inti Landauro at [e-mail]

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