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Next stop America for France's TGV?

Thursday, April 24, 2014 - 01:20

April 24 - General Electric keeps quiet on reports it's in talks to buy French turbine and train maker Alstom. Ivor Bennett reports on what could be an embarrassing rumour for the French government, with business-friendly reforms proving a hard sell.

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Train à grande vitesse - France's high speed railway is about as French as it gets. But could the TGV be on its way to America? According to Bloomberg, train maker Alstom could be bought by General Electric in a deal worth 13 billion dollars. GE has refused to comment. Although Alstom denies the rumour, suggestions are it could be announced as early as next week. For the French government the timing couldn't be worse. Labour reforms are proving hugely unpopular. Voters may find an overseas buyer difficult to swallow, says Reuters Breakingviews Pierre Briançon. SOUNDBITE (English) PIERRE BRIANÇON, EUROPEAN EDITOR, REUTERS BREAKINGVIEWS, SAYING: "We're facing a government, a new prime minister, who's trying to engineer the famous, or infamous, supply side shock that François Hollande wants to instill. They're trying to reform, cutting spending, cutting labour costs, doing overall very business policies. Which proves to be a hard sell in France." Alstom also make wind turbines, and for them, the timing couldn't be better. Weak electricity prices have fuelled a drop in orders. Cash flow concerns triggering a 20 percent slump in shares over the past year. Talk of a potential deal has prompted an instant rebound.

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Next stop America for France's TGV?

Thursday, April 24, 2014 - 01:20