Alstom wants to defy China’s train giant CRRC with the Bombardier mega merger

Alstom and the Bombardier train division merge. The new group is banking on growing rail traffic. What’s next at the German locations?

The French rail technology manufacturer Alstom has taken over the train division of Bombardier and now wants to stand up to the Chinese world market leader CRRC. For Alstom and the industry, the multi-billion dollar merger was a “unique moment,” said CEO Henri Poupart-Lafarge on Friday in Saint-Ouen near Paris.

Worldwide number two

The new Alstom Group has a turnover of around 15.7 billion euros, an order book worth 71.1 billion euros and employs around 75,000 people in 70 countries. According to industry information, the new group is number two worldwide with strong pillars in Europe and North America. The takeover, which has been in preparation for a long time, was due for 5.5 billion euros.

According to Poupart-Lafarge, Germany is an important market: “With 9,000 employees in Germany and development centers with state-of-the-art technology, we can offer all mobility providers tailored solutions that are agreed in Germany and delivered from there,” he told the German Press Agency in Paris. “This is important.” An independent regional organization is planned, which will also include Switzerland and Austria.

Alstom brand

When asked about a renovation in Germany and the future of the plants, Poupart-Lafarge said that all the strengths of the two companies that were now united would be needed to process the orders. “The success of the integration is paramount.” The manufacturer will in future appear with the Alstom brand. “The Bombardier brand will remain in the aviation industry.” The seller of the train division, the Canadian Bombardier group, also manufactures aircraft.

The trade union IG Metall called for clarification on jobs and locations as soon as possible. “The workforce maintained production under the most difficult pandemic conditions and did their part to ensure that the merger ran smoothly,” said the IG Metall district manager for Berlin-Brandenburg, Birgit Dietze.

Alstom sells locations

Poupart-Lafarge said the rail technology industry was significantly affected by the corona crisis and its economic consequences. “The climate crisis will remain. And it forces us to a mobility that is cleaner.” That is why he is convinced of the good prospects for the industry. The major shareholder of the newly formed group is the Canadian pension fund “Caisse des Dépôts et des Placements du Québec” (CDPQ) with 17.5 percent. Among other things, Alstom builds the TGV express train and regional trains.

The EU competition watchdog gave the green light for the deal last July . The new association has to hand over production facilities, including at the Hennigsdorf site near Berlin. According to earlier information, negotiations are in progress with the Czech company Skoda Transportation. Alstom will complete the sales as agreed with Brussels, the French insured. An Alstom plant in Alsace is also affected.

Great importance for East Germany

In the train division of the Canadian Bombardier Group, there had been several restructurings in recent years. Bombardier is particularly well represented in eastern Germany. 2200 permanent employees and temporary workers work in Hennigsdorf near Berlin and 1000 in Bautzen. There are 800 employees in Görlitz – as well as at the West German locations in Mannheim and Siegen. In Kassel there are 600. Smaller locations are Braunschweig and Berlin.

Prime Minister Dietmar Woidke (SPD) was confident about the future of the plant in Hennigsdorf. “This is of great importance for Hennigsdorf and for the entire capital region as an important location for rail vehicle construction,” he said. The state government accompanied the merger process and gained the impression that the negotiating partners tried to achieve a fair balance of interests, said Minister of Economics Jörg Steinbach (SPD). The interests of the employees were always kept in mind.

The merger was initially rejected

About two years ago, an initially planned merger between Alstom and the train division of Siemens failed due to resistance from EU competition officials. This veto had caused considerable resentment in Berlin and Paris.

Alstom did not comment in detail on the international market position. According to the Hamburg consultancy SCI Verkehr and other industry sources, the new association is well behind the Chinese industry giant CRRC.