* Finmeccanica's Ansaldo units seen joining rail group
* GE could buy stake but Hitachi still in the running
* Italian railways could have role in new entity
By Danilo Masoni
MILAN, Oct 11 Italy is in talks to create a
national rail group and bring in General Electric or
another foreign firm as a majority investor, trade unions said
on Friday, in the latest intervention by the government to help
The plan would involve a state-owned holding company taking
large minority stakes in train maker Ansaldo Breda and rail
signalling firm Ansaldo STS, which are being sold by
defence group Finmeccanica, they said.
Finmeccanica, in which the state owns a 30 percent stake,
put its rail and other non-core assets up for sale nearly two
years ago in a bid to cut its near 5 billion euros ($6.8
billion) of debt and focus on aerospace and defence.
The idea of a national rail champion had already been raised
by Prime Minister Enrico Letta. Along with a bail out plan for
airline Alitalia, it is another example of his government's
increasingly active role in the recession-hit economy.
Finmeccanica, which agreed last week to sell its gas plant
subsidiary Ansaldo Energia to the state-backed FSI fund, wholly
owns cash-burning Ansaldo Breda as well as 40 percent of Ansaldo
STS, which has an overall market value of 1.3 billion euros.
Finmeccanica needs to sell these assets to join in an
expected consolidation of the European defence industry, which
is suffering from budget cuts in mature markets.
Marco Bentivogli, national secretary of the Fim Cisl union,
said the industry ministry informed unions on Friday about a
government plan to create a holding company for minority stakes
in the three Ansaldos, which together employ 7,000 people in
In a statement, Bentivogli said the holding company would
seek an international partner for Ansaldo Breda and Ansaldo STS,
building on talks already started with General Electric (GE),
which said in September it was interested in buying STS.
Italy's industry ministry and GE declined to comment.
GE already has a large presence in Italy and is credited
with turning round oil and gas equipment maker Nuovo Pignone,
which it bought in 1993 during a round of privatisations.
Reports of a recent visit by Ansaldo STS CEO Sergio De Luca
to executives of GE's transportation unit in the United States
to discuss a tie-up have not been confirmed or denied.
Hitachi Rail has also been considering buying
Finmeccanica's rail assets. A source familiar with the situation
told Reuters on Friday the Japanese group was still seen as a
Details of the rail project have still to be agreed. Trade
unions raised concerns that the operation could lead to job
cuts, a loss of technological know-how and lower investment in
Fim-Cisl, Uilm and the hard-line Fiom-Cgil trade union said
in separate statements that state railway company Ferrovie dello
Stato should take a leading role, and the project should also
support train maker Firema, which is under special
The Italian government came under fire on Friday after
stitching together an emergency bailout for Alitalia that
critics said should involve less taxpayer money and a
longer-term strategy. Top investor Air France refused
to commit to the plan.
The government has also indicated it might consider measures
to safeguard national interests after Spain's Telefonica
struck a deal last month that could see it gradually
take full control of former state-owned phone group Telecom