February 26, 2018 / 10:15 AM / 10 months ago

Macron government takes on union bastion in French rail reform

PARIS (Reuters) - France will abolish jobs-for-life at the debt-ridden state-owned SNCF railways firm, the prime minister said on Monday, setting President Emmanuel Macron’s government on a collision course with powerful labor unions.

FILE PHOTO: Transilien trains, the suburban railway service of French state-owned railway company SNCF, are parked at a SNCF depot station in Charenton-le-Pont near Paris, France, May 31, 2016. REUTERS/Charles Platiau/File Photo

The overhaul of the SNCF, whose debts top 45 billion euros ($55.52 billion), is among the politically riskiest reforms to be pursued since the 40-year-old Macron won power in May 2017 on pledges to modernize France’s economy and do away with traditional Left-versus-Right politics.

Workers at the SNCF, a stronghold of the far-left CGT union, have already warned of protests and possible strikes over the reforms, which would spell the end of preferential terms that rail employees have enjoyed since nationalization in 1937.

“The situation is alarming,” Prime Minister Edouard Philippe said of the state of affairs at the SNCF group, where many of the 260,000 staff have jobs for life and the right to retire in their 50s, as much as a decade earlier than most.

“It’s time to dare it with a reform that the French people know is needed.”

In tackling the huge costs of France’s vast public rail system, Macron is taking on a challenge his predecessors either failed to master or simply ducked.

In 1995, SNCF unions spearheaded three weeks of strikes that crippled the French transport network and forced the then prime minister, Alain Juppe, to drop his welfare reforms and resign.

Philippe said fuller details of reforms would be set out in March and that the government was ready to push them through by decree, avoiding a vote in parliament, where it has a comfortable majority, if there were attempts to block them.

Two concessions may soften opposition: the scrapping of job-for-life contracts and generous pensions will apply only to new recruits, and a pledge not to close rural rail lines, as had been proposed in a report the government commissioned.

While that report, submitted to the government earlier this month, recommended that a debt of slightly more than 45 billion euros be taken off SNCF hands, Philippe made it clear that could only happen if the company changed its ways.

“It’s a shared effort. The state will live up to its duties before the end of its mandate to ensure the economic viability of railway system,” he said.

Four unions - CGT, Sud, Unsa and CFDT - meet on Tuesday to decide their riposte, with the CFDT urging the others to join in a rolling strike from March 12.

Of the government’s pledge to push reform through without votes in parliament if necessary, Sud-Rail chief Erik Meyer said: “This is blackmail by decree”.

($1 = 0.8106 euros)

Reporting by Brian Love; Additional reporting by Simon Carraud; Editing by Richard Lough and Mark Heinrich

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