By Inti Landauro
PARIS-- Alstom SA said Tuesday it plans to cuts jobs at two
facilities in France and Spain as the engineering firm adapts to a
weaker market for rolling stock.
The French group, known for its iconic TGV superfast train,
plans to cut slightly fewer than 200 jobs at its rolling-stock
manufacturing unit in Barcelona and roughly the same number at the
headquarters of its train unit in Saint-Ouen, just outside Paris, a
spokeswoman said.
The company has already begun consulting labor unions about the
cuts, she said. She didn't specify how many workers will be laid
off and how many will be relocated to other company divisions.
"The job cut is related to the need to adapt to the current
situation of the market," she said. The planned job cuts are in
addition to 1,300 job cuts announced by the company five months ago
as part of a plan to slow cash burn.
Alstom, which also manufactures equipment for power plants,
unveiled a plan last November to cut EUR1.5 billion ($2.07 billion)
in costs through job cuts and other measures. The company also
plans to raise between EUR1 billion and EUR2 billion by selling a
minority stake in its flagship train business and other assets.
Two months after announcing these measures, Alstom cut its cash
flow and profitability forecast, resulting in its share price
falling to a nine year low, though it has since rebounded
modestly.
Alstom is grappling with big cutbacks in capital spending by
Europe's utilities, amid slack economic growth in the region. Less
vibrant growth in emerging markets has also trimmed demand for
Alstom's power turbines and equipment used to connect power
stations to the grid.
On top of that, Alstom has problems of its own. It turns
relatively little of the orders it gets into cash, a handicap in
the capital-intensive energy-equipment and train-making sectors.
Its main competitors such as General Electric Co. and Siemens AG of
Germany have had fewer problems during the downturn because of
their sheer size. Alstom's products are more exposed to cut-price
competition from Asian rivals.
Write to Inti Landauro at inti.landauro@wsj.com
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