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Alstom to stop making trains at Belfort

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eisenach

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I heard this on French radio yesterday. Here's a link to a short report on the franceinfo: website:
http://www.francetvinfo.fr/economie...lfort-tout-un-symbole_1814619.html#xtor=AL-85

La fin du site de production d'Alstom à Belfort, tout un symbole
La direction d'Alstom l'a confirmé mercredi : d'ici 2018, le constructeur ferroviaire va transférer vers l'Alsace son unité de production historique de Belfort. Un signe des difficultés que rencontre l'entreprise. Alstom dans la tourmente. Faute de commandes suffisantes, le constructeur ferroviaire entame une restructuration. D'ici deux ans, le site historique de Belfort ne fabriquera plus de trains et sa production sera transférée sur le site de Reichshoffen en Alsace.

Cette décision a une forte valeur symbolique. Belfort est le bastion historique d'Alstom. Là où a été produite la toute première locomotive à vapeur en 1880, puis la première motrice du TGV. Mais de l'eau a coulé sous les ponts. Il y a un an, Alstom se recentrait sur le ferroviaire après avoir cédé sa branche énergie à l'américain General Electric.
Un marché français en berne et une forte concurrence.

Aujourd'hui le carnet de commandes a du mal à se remplir. Le marché français est en berne. À l'international, Alstom doit faire face à la concurrence de quatre géants mondiaux. Ces derniers mois, le groupe français a remporté plusieurs contrats majeurs en Inde, aux Pays-Bas et aux Etats-Unis... mais à chaque fois, la production des trains a été délocalisée.

Si le groupe n'arrive pas à remonter la pente, les syndicats craignent que la restructuration touche d'autres sites Alstom en France. L'entreprise deviendrait alors une proie aux yeux de ses concurrents.

La ministère de l'Économie et des Finances affirme suivre l'affaire avec beaucoup d'attention. Christophe Sirugue, le nouveau secrétaire d'État à l'Industrie, recevra le PDG d'Alstom dans les jours qui viennent.

Google translate renders it as:

The end of Alstom's production site in Belfort, a symbol
The management of the Alstom confirmed Wednesday: by 2018, the rail manufacturer will transfer towards Alsace its historic production unit of Belfort. A sign of the difficulties the company.

Alstom in turmoil. Although a lack of orders, the rail manufacturer began a restructuring. Within two years, the historic site of Belfort will not manufacture more trains and its production will be transferred to the Reichshoffen site in Alsace.

This decision has great symbolic value. Belfort is the historical bastion of Alstom. Where was produced the first steam locomotive in 1880 and the first drive of the TGV. But water has flowed under the bridge. There is one year, Alstom is refocusing on the rail after losing its energy division to the American General Electric.
French market at half mast and strong competition

Today the backlog is struggling to fill. The French market is at half mast. Internationally, the Group faces competition from four global giants. In recent months, the French group has won several major contracts in India, the Netherlands and the United States ... but each time, trains the production was relocated.

If the group fails to turn the corner, unions fear that restructuring affects other Alstom sites in France. The company would become a prey in the eyes of its competitors.

The Ministry of Economy and Finance says follow the case very carefully. Christophe Sirugue, the new Secretary of State for Industry, will receive the CEO of Alstom in the coming days.
 
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LNW-GW Joint

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This version is in rather better English:
http://www.railwaygazette.com/news/...o-cease-locomotive-production-at-belfort.html
FRANCE: Citing an anticipated 30% drop in orders from the French market over the next two years, Alstom announced on September 7 that it is embarking on a programme to reduce manufacturing capacity in the country.
Addressing a meeting of its European Works Forum at the Belfort plant in Franche-Comté, the company confirmed that it is intending to cease manufacturing in Belfort by 2018. The plant has been Alstom’s production centre for locomotives and TGV power cars, but its current contracts are nearing completion. The company pointed to a ‘crisis’ in French rail freight over the past decade, and noted that it had lost a recent tender for locomotives.
Belfort’s engineering and production functions are to be transferred to the Reichshoffen plant in neighbouring Alsace, which is reportedly also under-employed with fewer orders for Régiolis multiple-units than anticipated. Alstom says it will continue to provide locomotive maintenance and servicing at Belfort, accounting for around 80 of the current 480 jobs. The other 400 employees will be offered the opportunity to transfer to Reichshoffen or Alstom’s other 10 French sites.
 

Mikey C

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http://www.wsj.com/articles/frances...nt-closure-of-alstom-train-factory-1473684643

Naturally this has become a political issue in election year, despite Alstom offering to relocate the workers not needed there to other sites. It's also notable that Vossloh won a recent loco order, which shows that it isn't just the British who order from overseas suppliers...
Two months ago, the French state-owned train operator SNCF picked an Alstom rival, Germany-based Vossloh, for a €140 million ($157 million) order for 44 freight locomotives starting in 2018. Alstom was counting on that order to keep the activity at Belfort going, the spokeswoman for the company said.

The train maker has pledged to find jobs for all its 470 employees at Belfort. A group of 80 workers will remain in Belfort to service French trains, and the others will be offered work at one of the company’s 11 other sites in France.
 

Groningen

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So the French government has made a deal to save the plant in Belfort. Because the SNCF does not need it a new operator will use it from 2020. This new operator will compete with the SNCF; i am not so sure whether this is a good thing. Because i am not known with the french language i have the link (from Les Echos) below and you maybe have to use Google Translate,

http://www.lesechos.fr/industrie-se...que-pose-lachat-des-tgv-par-letat-2032418.php
 

LNW-GW Joint

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Fully explained here: http://www.railwaygazette.com/news/...-and-alstom-agree-belfort-rescue-package.html

That announcement provoked a furious reaction from local politicians and trade union representatives, and prompted a series of negotiations between Alstom and the government with a view to retaining more work at Belfort. The result of the negotiations is that the government has asked national operator SNCF to confirm a widely-expected order for six TGV trainsets to operate Paris – Milano cross-border services, while infrastructure manager SNCF Réseau is to order 20 shunting locomotives for rescue work and other operational support duties.

In addition, the government itself is to order a further 15 Euroduplex high speed trainsets to work Intercités services on the Bordeaux – Marseille cross-country route, which currently features no dedicated high speed infrastructure. The government says that this order is being placed ‘in anticipation of the future completion of the Bordeaux – Toulouse and Perpignan – Montpellier high speed lines’. The government says that it also expects to confirm ‘by the end of November’ an order for a further 30 inter-city trainsets for long-distance conventional services; these would be produced by Alstom at Reichshoffen

So Alstom has modified Belfort's run-down somewhat, and the government has pushed SNCF to buy trains it doesn't need yet.
 

daikilo

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Fully explained here: http://www.railwaygazette.com/news/...-and-alstom-agree-belfort-rescue-package.html



So Alstom has modified Belfort's run-down somewhat, and the government has pushed SNCF to buy trains it doesn't need yet.

Whilst the TGVs were possibly previously options, the shunting locos most likely were not. I get the impression that the SNCF chose Vossloh as it actually met the spec whereas this latest idea has not been subject to a call for tender.
Another twist that some have picked up on, is that te TGVs will apparently take the place of some trains that were previously part of the upcoming "intercity" deal potentially benefitting Alsthom over a competitor bid.

So much for the open bidding process not to mention avoiding state aid!
 

Mikey C

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Will the EU investigate?

Surely placing orders like this is against the rules...
 

Bertie the bus

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Indeed. EU regulations only apply to countries who are too weak to reject them or whose governments are too stupid to ignore rules that are against their national interest, such as ours. But as we’ll be out of it in 30 months that’s for others to worry about.
 

daikilo

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It seems that the French government has been told by their lawyers that, according to EU law, they can't buy rail vehicles without a competition. The tentative solution seems to be to transfer at least the order for the TGVs to SNCF to whom the government will then give the money to buy them. I assume SNCF had some outstanding options. No info yet on what happens to the shunters which as far as I am aware were not competed either as the order from the SNCF to Vossloh was for shunter/trip diesels and not the small ones refered to by the government.

I am looking for reliable written evidence.
 

daikilo

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That's quite a good Google translation, by Google standards!

Actually, I read the French (several articles) and wrote it myself. It seems that the legal opinion was actually given in early December and it has probably popped up now as the Alstom unions and management should be in talks today.

It's quite funny really as it was the President who announced the order out of the blue and against SNCF wishes. At the time I wrote (further up this thread) that I doubted it met bidding criteria! Now the government is saying they will provide the money which could be seen as a straight and illegal subsidy!.
 

Billy A

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I was actually referring to the very first post though which I mistakenly thought was a recent one, which was actually by Google. I wasn't casting aspersions on your French!
 

daikilo

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Government spokesperson now saying there will be announcements in the coming weeks on what will actually happen and how.
 

daikilo

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According to French media today, the new trains (double-deck) will now replace existing single-deck units on the TGV Atlantique and the order will be by SNCF with some government assistance such as tax reductions. This appears to be a government statement so we need to wait to hear what SNCF has to say.

No mention of how this is now compliant with European law, but as I have said before, SNCF probably has options to a previous contract.

No mention of the shunters for the track authority.
 

AlexNL

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No mention of how this is now compliant with European law, but as I have said before, SNCF probably has options to a previous contract.

Even if they don't, SNCF can put out a tender asking for "very high speed trains (320 km/h) of a fixed formation consisting of double deck coaches, powered by locomotives on each end, that are based on a proven platform" and they'll get one bid: Alstom.

None of the other train builders have a double deck HST in their portfolio, so there's no "proven platform". The Euroduplex is the only one in the market.
 

daikilo

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Even if they don't, SNCF can put out a tender asking for "very high speed trains (320 km/h) of a fixed formation consisting of double deck coaches, powered by locomotives on each end, that are based on a proven platform" and they'll get one bid: Alstom.

None of the other train builders have a double deck HST in their portfolio, so there's no "proven platform". The Euroduplex is the only one in the market.

Yes, you are no doubt correct, but they haven't done it, that is the issue under European law. Anyway, according to an article in the electronic version of the Le Monde newspaper dated 15/02, SNCF do have outstanding options. (In French - key text is second sentence in the paragraph beside the picture pf solar panels) http://www.lemonde.fr/economie-fran...-lignes-a-grande-vitesse_5080136_1656968.html
 
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Groningen

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According to a Dutch public transport the SNCF and french government are doing strange things to let it look that it is not government support for the SNCF. It is very technical. Total cost for the 15 trains is about 420 million euro.
 

MarcVD

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Why would they need to do that ? Is there a rule saying that domestic passenger rail transport cannot be subsidized ? In France they have not even introduced competition yet...

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OK, the issue here is State Aid. If the French government bought the TGVs direct from Alstom, it is highly likely that (apart from violating EU procurement law by not holding a tender) the purchase could be deemed to be illegal aid. Unless approved by the Commission as being in line with the treaties, the aid would be at risk of having to be repaid on demand by the EU. Broadly speaking, aid which is provided just to save domestic companies (which is what this is: my main witness being ...er ... the French President) will be deemed to be illegal as it is not offered to non-French suppliers (in Eurospeak 'incompatible with the single market').
But if the trains are bought via SNCF, and SNCF are then compensated by higher subsidy payments as the trains are amortised, then this perfectly fine: SNCF payments will not be regarded as State Aid provided they are in conformance with the EU PSO Regulation (1370/2007). Broadly speaking that allows governments to subsidise uncommercial passenger rail operations to their heart's content provided that they issue some public indication of what the subsidies are, what are they to be used for and are not a hidden way of subsidising commercial services such as freight.
The Le Monde article also says that the plan now is for older TGVs to take over the Bordeaux - Marseilles trains and for the new ones to go on the Paris-Bordeaux-Toulouse routes, ie. what we would call a cascade. This saves the cost of refurbishing the already refurbished ex-Corail fleet currently used on the service and allows some maintenance efficiencies at Bordeaux by the reducing the number of different types of TGV they have to look after. Sounds actually quite sensible given the non-TGV 'intercity' routes in France are fairly run down with ancient rolling stock.
For background, the French government nearly come to grief over Pres. Sarko's plan to save Alstom power plants a few years back ahead of the 2012 election which clearly was illegal state aid IMHO The French Government had to deploy max effort in Brussels to get it approved and hence here there has been considerable effort to devising a structure in advance that is, superficially at least, apparently compatible with EU law.
 
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randyrippley

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I have to say that after the way Alstom / Alsthom acquired and butchered much of the British rail, power, controls and electronics industries I feel quite a satisfaction to see them struggling.
 

daikilo

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But if the trains are bought via SNCF, and SNCF are then compensated by higher subsidy payments as the trains are amortised, then this perfectly fine: SNCF payments will not be regarded as State Aid provided they are in conformance with the EU PSO Regulation (1370/2007). Broadly speaking that allows governments to subsidise uncommercial passenger rail operations to their heart's content provided that they issue some public indication of what the subsidies are, what are they to be used for and are not a hidden way of subsidising commercial services such as freight.
The Le Monde article also says that the plan now is for older TGVs to take over the Bordeaux - Marseilles trains and for the new ones to go on the Paris-Bordeaux-Toulouse routes, ie. what we would call a cascade. This saves the cost of refurbishing the already refurbished ex-Corail fleet currently used on the service and allows some maintenance efficiencies at Bordeaux by the reducing the number of different types of TGV they have to look after. Sounds actually quite sensible given the non-TGV 'intercity' routes in France are fairly run down with ancient rolling stock.

I cannot imagine how Brussels could accept that the TGV network merits a sibsidy as it is both long distance and has never been put out to franchise bidding (and I think Brussels already has some issues with that.

As I read it, the current single-deck TGV Atlantique, some of which came off the TGV SudEst , will be scrapped "au rebut".

I have also seen somewhere in the last 24hours that the call for tender for the 30 TET sets will now be rewritten with again the name Alstom being cited as a reason to do so.

Also, the 20 Alstom shunters has come up again with them being described as "to rescue failed trains" when previously they were for the French equivalent of NR. Either way they seem to have missed the bidding step and I think the last SNCF 4/6-wheel shunters date from the last century.
 

Chris999999

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I cannot imagine how Brussels could accept that the TGV network merits a sibsidy as it is both long distance and has never been put out to franchise bidding (and I think Brussels already has some issues with that.

As I read it, the current single-deck TGV Atlantique, some of which came off the TGV SudEst , will be scrapped "au rebut".

I have also seen somewhere in the last 24hours that the call for tender for the 30 TET sets will now be rewritten with again the name Alstom being cited as a reason to do so.

Also, the 20 Alstom shunters has come up again with them being described as "to rescue failed trains" when previously they were for the French equivalent of NR. Either way they seem to have missed the bidding step and I think the last SNCF 4/6-wheel shunters date from the last century.

I don't understand why you "cannot imagine how Brussels could accept that the TGV network merits a sibsidy". This is France and it has become quite clear over many years that France can do things that the UK can't. The reason: The UK gold plates and implements rules and regulations to the letter. France and many other European countries put their efforts into not gold plates, but into working round regulations to their own advantage.
 

jopsuk

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For all the moaning about UK being overburdended by EU rules that eg France tries not follow, I'm pretty damn sure that everything around rail franchising, open access and all the tendering and procurement rules that go with it originated in Whitehall and was more or less foisted upon the rest of the continent by us
 

Chris999999

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For all the moaning about UK being overburdended by EU rules that eg France tries not follow, I'm pretty damn sure that everything around rail franchising, open access and all the tendering and procurement rules that go with it originated in Whitehall and was more or less foisted upon the rest of the continent by us

Perhaps, but it does not affect the premise.
 

daikilo

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For all the moaning about UK being overburdended by EU rules that eg France tries not follow, I'm pretty damn sure that everything around rail franchising, open access and all the tendering and procurement rules that go with it originated in Whitehall and was more or less foisted upon the rest of the continent by us

I have a feeling this is an urban myth for two reasons (1) in the detail, the UK has in many respects gone much further than EU rules actually require (2) the current rules are a stacking of individual rules which have been built up over time each of which will be valid from a given date and may or may not have been transcribed into the law of an individual country. In addition some are "must do" and others are recommendations, with only the former potentially leading to dispute with the EU.

I previously suggested that the EU may be taking a dim view of the fact that no attempt has been made to open the domestic TGV network to other operators than the SNCF. I realise now that this is apparently not required until at the earliest 2020. However, that doesn't detract from the fact that the French government is making no attempt to open up the passenger network to private companies with even the TER networks apparently required to use SNCF vehicles.
 
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