The government of France is fining GE for not creating as many jobs as the company asserted it would in a deal four years ago to buy France’s Alstom SA.
GE initially promised that it would add 1,000 positions in France by the end of 2018. Part of the deal stipulated that GE would pay a fine of 50,000 euros ($57,000) for every job short of the promised number. The French ministry says GE has created 323 jobs as of April 2018, with unions and local officials asserting that the number is even lower. That adds up to a maximum fine of 50 million euros ($56 million). The Alstom purchase cost about $10 billion.
In December 2017, GE announced it would need to cut 12,000 jobs around the world as a reaction to decreasing use of natural gas and other conventional energy sources.
Negotiated four years ago, the acquisition of Alstom, a power and grid company with about 1,500 GW of installed base power generation, was supposed to widen GE’s portfolio and grow globally. This year, GE Ceo John Flannery called the results “very disappointing.”
The French government is expected to request the money in the next few weeks, according to a source from Bloomberg. Those funds collected from the fine will be allocated to support businesses in the areas where the jobs were intended to be created.