GE CEO Immelt Pleads His Alstom Case to French LawmakersFrancois de Beaupuy, Richard Clough and Mathieu Rosemain
General Electric Co.’s Jeffrey Immelt made a rare appearance by a U.S. chief executive officer before France’s National Assembly, saying his $17 billion bid for Alstom SA’s energy assets would protect jobs and the nation’s industrial base.
“We come to build, we don’t leave when times are tough,” Immelt told lawmakers on the eve of a meeting tomorrow with French President Francois Hollande at the Elysee Palace. “From France we can create the technology that the world needs.”
GE would add employment in France and boost local research and development spending, said Immelt, whose appearance followed a competing presentation by Siemens AG’s France Chairman Christophe de Maistre. Siemens has proposed swapping its trainmaking business for Alstom’s energy assets, and plans to present an official offer by June 16 at the latest.
Immelt’s personal appeal to political leaders highlighted the importance attached to Alstom by both GE and the French government, which is seeking to extract the best guarantees from any bidder for jobs and the country’s energy independence. Alstom makes power equipment and the TGV high-speed trains.
Hollande and Economy Minister Arnaud Montebourg have called on GE to improve its offer for the energy unit of Alstom, which is based in the Paris suburb of Levallois-Perret. Hollande has said the bid is “not acceptable” and has called for stronger workforce guarantees, while Montebourg has publicly stated a preference for the proposal from Munich-based Siemens.
Immelt’s appearance before the National Assembly was “about as high-profile and high drama as it gets,” said Shannon O’Callaghan, a Nomura Holdings Inc. analyst in New York. He said Immelt used the opportunity to bolster GE’s case without making many concessions on the terms.
“He seems like he’s listening and responding to potential compromises around the margins, but is sticking to his guns,” said O’Callaghan, who has a neutral rating on the stock. “GE has a strong presence in France, a strong presence in Europe and they’re doing what they need to do in terms of making that case.”
GE rose 0.2 percent to $26.57 at the close in New York, paring the shares’ year-to-date decline to 5.2 percent. Alstom fell 0.2 percent to 28.69 euros in Paris, while Siemens slid 0.1 percent to 97.45 euros in Frankfurt.
Immelt responded to French concerns that the offer from Fairfield, Connecticut-based GE represents a takeover, pledging that the Alstom brand “lives on” and characterizing the deal as an alliance.
“Alstom will not disappear,” Immelt said. “You will have more global impact.”
Siemens’s de Maistre told the lawmakers that combining Germany’s largest engineering company with the energy business of its French rival would create European leaders in energy and rail.
“Alstom Transport is simply too small” to face Chinese, Japanese, Korean and Canadian competitors if it doesn’t merge with Siemens’s rail business, de Maistre said. “A critical size” is required to get bank guarantees for contracts, he said.
Immelt affirmed GE’s recent pledges to explore a partnership with Alstom in the rail-signaling business and said GE would consider selling the unit to Alstom.
The CEO said he expects GE to hire additional engineers and boost French employment incrementally. He also pledged to protect the sovereign nature of France’s nuclear power industry.
“We’re very sensitive to how important the energy industry is to France,” Immelt said. With a GE acquisition of Alstom assets, “France will become one of the most important and diverse energy centers in the world.”