A new champion in the rail sector?
ICE manufacturer Siemens and TGV manufacturer Alstom have announced plans to merge their rail operations. The two companies say the partnership is aimed at implementing the European project and creating a new European rail champion. This railway sector merger will have dire consequences, some commentators fear. Others see no reason for all the fuss.
Not too late to nationalise Alstom
The rail alliance must be prevented, the former Socialist economics minister Arnaud Montebourg comments in Le Monde, arguing that it and recent sales of other French companies would have a disastrous impact on the French economy:
“How can we ignore the dire consequences this decision would have in the medium term? The decision-making centres will move abroad where different interests prevail. Our country will be technologically impoverished. Thousands of jobs will be lost; at first this will be covered up but in the end it will come to light - a disaster for many areas and regions. It is not too late to nationalise Alstom. ... It is not too late to start new negotiations aimed at establishing an alliance between equals that is fictitious today, according to the model developed 20 years ago for Airbus. ”
Product quality is the key
The growing anger in France over the rail operations merger is completely out of place, the liberal economist Jacques Garello writes in Contrepoints:
“There's no reason for nationalistic emotions. ... All the fuss is due to the fact that the merger involves a major company listed on the [benchmark French stock market index] CAC 40. The business papers give priority to these groups which nonetheless by no means represent the fabric of the French economy. ... The day when the French understand that there is no economic war, that the prosperity of a company has nothing to do with national sovereignty, and that the decisive factor is the quality of the goods and services shipped around the world, we will have come one big step forward.”
A necessary marriage of convenience
The railway merger was long overdue in view of the growing competition from the Far East, L'Echo comments:
“The merger is good news for Europe, whose railway sector is currently in upheaval. The EU is planning investments amounting to 500 billion euros between 2020 and 2030 to develop the network of key routes. This challenge must be met, but the competition is stiff. China's transportation giant CRRC has global ambitions. The Chinese transportation companies have ousted European firms in Asia, Africa and even Europe. Moreover, this offensive is the sign of a more long-term trend: the rebirth of the Silk Route. This profoundly European merger is a marriage of convenience and a result of the new consensus between France and Germany.”
National privileges compromise efficiency
Although the merger is being praised as the realisation of the European project it is dominated by national interests, the Neue Zürcher Zeitung comments:
“The purported new champion in the railway sector is anything but the result of a free interplay of market forces. The French government intervened heavily in the negotiations and secured considerable job guarantees which jeopardise the efficiency of the new company. The main headquarters of the new conglomerate will be in the Paris area and the former Alstom CEO will lead the company, which is also listed on the Paris stock exchange. The jobs, plants and research and development investments are to remain untouchable in France in the four years 'after the effective implementation of the merger', as Minister for Economic Affairs Le Maire stressed.”
Strengthen French capitalism
The merger plans prompt an appeal to France's politicians from David Barroux, editor-in-chief of Les Echos:
“They must now admit that the weakness of our capitalism is the reason why French companies are more like animals of prey than predators. To have the decision-making power in merger negotiations our companies need to be rich and powerful. Consequently our politicians must act swiftly and efficiently to allow our capitalism to prosper. Otherwise there's a good chance that in the years to come more Siemens will swallow up more Alstoms for good reasons and by making promises that nothing guarantees they'll keep.”