A merger of the rail businesses of Germany’s Siemens and France’s Alstom, billed as creating a European champion, was welcomed by investors but criticized in France as giving away control to Germany and risking job cuts.
The tie-up, set to help the European companies counter the rapid rise of China’s state-owned CRRC 601776.SS, represents an industrial win for Macron, who is proposing sweeping reforms for Europe including deeper trade cooperation.
While his government said on Wednesday the deal would preserve “strategic interests”, others accused him of neglecting national concerns.
“It is bound to bring a restructuring and no doubt the culling of hundreds of jobs,” said Olivier Kohler, a trade union official in the eastern French town of Belfort, where Alstom makes the high-speed TGV trains that travel the length and breadth of the country.
Alstom shares jumped as much as 8.5 percent and Siemens rose 2 percent as analysts focused on the cost savings.
French and German leaders have for years called for the creation of “European champions” such as Airbus (AIR.PA) to capitalize on the strengths of Europe’s single market and create the scale needed to compete with U.S. and Asian rivals.
Yet discussions have often run into difficulties as politicians vie to protect local jobs and retain national influence over an industrial sector.
Under the rail deal announced on Tuesday, Siemens will have a small majority of the Paris-based and listed combination, which promises eventual annual cost savings of 470 million euros ($552 million) a year, while Alstom boss Henri Poupart-Lafarge will become its chief executive.
While Joe Kaeser, CEO of Siemens, acknowledged there would be job losses, he said they would be in support functions such as human resources rather than in engineering.
“Of course there will be redundancies, that’s part of the synergies,” told a news conference.
French Finance Minister Bruno Le Maire told reporters in Paris he hoped Europe could now go on to create a leading naval company at a Franco-Italian summit in Lyon.
That would be part of a deal between Paris and Rome over the STX France shipyards.
