GE faces penalties over French jobs pledge
The French government said US conglomerate General Electric would have to pay millions of euros in penalties, should it not be able to live up to its promise of creating 1,000 new jobs in France by the end of the year.
The French government said US conglomerate General Electric would have to pay millions of euros in penalties, should it not be able to live up to its promise of creating 1,000 new jobs in France by the end of the year. GE made the promise as part of its 2014 purchase of Alstom's power and electrical grid businesses, including its prized gas turbine operations. The transaction was valued at €12.4bn ($14.4bn).
CEO John Flannery told the French Finance Ministry a week ago that he could not honour the French hiring pledge, which had so far led to just 323 new jobs in the country.
“The contract called for a €50,000 penalty for every job not created,” Labour Minister Muriel Penicaud told BFM television. “If no new jobs are created by the end of the year, GE could be facing a fine of nearly €34 milloion.”
While the sums involved are small for a company the size of GE the move runs counter to the government's bid to liberalise labour markets. Shortly after the takeover GE announced plans to cut 6,500 power jobs in Europe because of falling oil and gas prices, and a further 12,000 job cuts in the sector were announced last December.
The hiring pledge was secured by France's previous Socialist government, and opposition parties have urged the current government of President Emmanuel Macron to apply the fine. Macron, a former investment banker, has vowed to make France more attractive to foreign companies, pushing through reforms to make it easier for businesses to hire and fire workers. The move could be a test of President Emmanuel Macron's bid to push through more business-friendly policies.