French govt intervenes to save under-threat TGV train factory

The French government said Monday it had intervened to save the Alstom factory that assembled the country's first high-speed TGV train.

Alstom said last week it planned to halt production at the locomotive factory in Belfort, eastern France, prompting a rapid response from the Socialist government.

Alstom said it wanted to centralise its train production at a site 200 kilometres (125 miles) further north in Alsace and promised to offer the 400 workers in Belfort other jobs.

But after a cabinet meeting on Monday, Transport Minister Alain Vidalies said production at the site would now continue "in the same proportions as the current level".

The French government has a 20-percent stake in Alstom.

Vidalies described the company's threat to close the factory as "incomprehensible" because there was a chance of landing new contracts in the near future.

President Francois Hollande said earlier that he had told his cabinet "to ensure that more orders are taken there".

Belfort is a symbol of French industrial prowess. Alstom's first steam train was produced at the site in 1880.

The prospect of job losses at the factory would have been of concern to the Socialist government, with presidential and legislative elections looming next year.

The French government has a track record of intervening when it deems French companies or jobs to be under threat, particularly from multinationals.

When US conglomerate GE announced a bid for Alstom's energy assets in 2014 the state got involved, getting German group Siemens to put up a rival bid before finally coming down on the side of GE.