Brutal cutbacks at General Electric Or: The consequences of breaking ALSTOM

Heinrich Neuhaus


On January 13, 2016, General Electric (GE) in Mannheim-Käfertaler and the other sites let the cat out of the bag. In a crowded staff meeting the CEO of GE-Alstom Germany, Alf Henryk Wulf, announced brutal cutbacks on behalf of the new corporate masters.


In consequence a total of 6,819 jobs will be lost in the European plants. In Germany the reduction of more than 1,700 jobs is planned in Bexbach, Mainz-Kastel. Mannheim and Stuttgart. Alone in Mannheim GE wants to sack 1,066 colleagues.


The “power”-branch of GE will be affected in particular. Around 500 jobs shall be eliminated. In the Mannheim turbine production approximately 560 additional locations in other departments (Kraftwerk Service, staff areas ...). Both the works council ( and the local IG Metall ( announced stiff resistance.


Following to the open-end staff meeting 1,200 colleagues protested in a march from the company to the factory at the market place in the city center of Mannheim.


A view back

On June 21, 2014 the Executive Committee of ALSTOM announced enforcement. In the bidding war, the French multinational group, Siemens and its partner Mitsubishi Heavy Industries lost out. The giant GE made the deal.


The specification of the ALSTOM's main shareholder Bouygues (29.4% shares) from the second half of 2013 had been implemented thus. ALSTOM - a global company in the fields of power plants (power), power transmission (Grid) & Railway (Transport) with approximately 96,000 employees and 20.3 billion euros in sales (fiscal year 2013/2014) - was smashed. The multi-billionaire Bouygues required "cash". He wanted to be actively strengthened in the mobile phone market, since faster profits with reduced stake can be made there.



Patrick Kron, former CEO of ALSTOM, Knight of the French Legion of Honor and mainly responsible for the problems of the group, when announcing the trade with GE, he boasted, that he had enforced "his" original plan. All were winners - ALSTOM, GE and the French State.

However, winners are mainly GE and shareholders and top managers of ALSTOM. As a bonus for years of looting of the Group, the criminal mismanagement and the destruction of the latter ALSTOM their already bulging pockets filled even more.

Around 4 billion euros flowed on ALSTOM accounts. The lion's share of this went to Bouygues. Group Boss Kron received according to the French press an additional bonus of more than 4 million euros, the 2,000 Group managers a total of 60 million euros. This was the Judas reward for the destruction. These huge sums belong to the employees, who have enabled this windfall with their work.


At ALSTOM the transport division is still left, which produces almost everything that can travel on rails from a tram to a high speed train TGV. There are 28,000 people active worldwide, who produce about 30% of the previous total Group sales. The largest plant is located in Salzgitter. Meanwhile there are rumors that the transport sector will not exist much longer in its present form.


US Multinational

GE has already started, both the conventional energy sector acquired by ALSTOM as well as the joint venture companies, de facto controlled by the US Company, submit a crunching profit maximization plan. The aim is to get back the purchase price as quickly as possible. GE has absolutely no understanding of "profit-barriers" in contrast to the works council members or effective collective bargaining coverage.


GE is one of the largest and most profitable conglomerates in the world. The US multinational is active inter alia in the fields of energy, finance, health, aeronautics and transport. GE was from 2001 to 2005, according to the Financial Times Global 500 the most expensive listed company in the world.


Around 300,000 employees, including approximately 80,000 in Europe, are generating in more than 100 countries, according to Capital magazine of May 22, 2014, annual sales of about 147.5 billion US dollars (2013) and reported a net profit of 24.6 billion dollars.


In Germany GE is represented at more than 70 locations with approximately 7,500 employees. Energy, "Green" technologies, medical technology, research and development and financial services in this country are the main business areas.


The US group icon takes a constant change of their structures. Hundreds mergers and acquisitions were counted in recent years only.

General Electric in its current form was widely shaped by John Francis "Jack" Welch jr., who served for 20 years as CEO. Welch was elect "Manager of the Century" in 1999 by Fortune magazine.

Under his leadership, the group sales (1981) grew from 27 billion dollars to 130 billion (2001). While the annual profit increased sevenfold, the number of employees decreased from 400,000 to 300,000 at the same time. This policy brought Welch the nickname "Neutron Jack".


Welch was considered a radical proponent of "shareholder values", i.e. the orientation exclusively to the interests of the (main) shareholder. He invented the "dictatorship of the numbers" as the principle of corporate management. His strategy was simple: "Fix it, sell it or close it".


Parts of companies with insufficient margin will be closed or sold if it does not reach the predetermined numbers after two years. On the other hand, more profitable or more profit promising businesses are purchased.  Welch presented to GE employees the "20-70-10 rule”.  According to this rule the 20%, the "Stars", will be rewarded with bonuses. The 70% in the middle are under demand and encouragement. The "weakest" 10 percent - contemptuously called "Lemons" – will be dismissed.


In spring 2009, Welch described the concept under the influence of the "financial crisis" the shareholder value concept as a "stupid idea". His successor Jeffrey Immelt has now trimmed the GE financial division to mainly focus on industrial areas. But Welch's strategy of "dictatorship of numbers" is continuing. Several months ago, GE ceded its traditional domestic appliances division.


"Union busting"

By smashing ALSTOM the interest representation of employees at European and national level will be done. GE already has appropriate corporate compliant "interest representation" structures prepared to "integrate" the tradition of trade union counter-power at ALSTOM smoothly

In addition, the German ALSTOM management had cancelled at the behest of the Paris headquarters, location- and employment guarantees for the end of 2014 (originally 2015). Earlier on restructuring plans have been made on the orders in of the Executive Committee. They went in the power range of ALSTOM for massive job cuts and plant closures.

"Dedicated to Excellence" (D2E) it was named as a "no alternative" propagated clear-cut program of the top management. D2E-pins on the jacket became mandatory for a good ALSTOM Manager.


Actions of Resistance

Since 2014 diverse forms of resistance emerged against the cuts and ALSTOM started to be noticeable in public perception. For example, in late April 2014 the Mannheim ALSTOM factory had a sharp conflict over the removal of turbine components which escalated into a multi-day blockade of the gate. Numerous protest demonstrations and rallies followed.


At ALSTOM of fierce dispute between management and the Group Works Council about to the termination of employment and location guarantees and the "restructuring plans" of the power plant division eventually led into a kind of trench warfare.


The attempt to implement an arbitration committee to resolve conflicts in this long-running dispute had failed. The termination of this process was an alarm signal. The ALSTOM management was preparing area and department closures with redundancies in close coordination with the new management. The closure of the Neumarker boiler construction plant last year was only the first step.


The "pacification attempts" of management to the employees and their representative bodies had a real impact.  The attacks orchestrated by a consulting company called Hoss targeted intimidation and division maneuvers became clearer. First, there were attacks against spokesmen of interest groups, including physical injury. Second, the management ignored the rights of the works council guaranteed by the Works Constitution Act. And third, were increasingly coordinated efforts of business and departmental managers to register to separate the workforces of their representatives. Served this purpose, for example, from advance terminated "employee information" of the management, to influence the employees in terms of the management and to keep them from visiting the announced staff meetings, etc. were used.

In particular, after the conflict end April 2014 – the failure to inform the works council about the removal of the turbine parts from the Käfertaler plant - reinforced the management pressure. They accused the Mannheim workers representatives falsely not to have given Workers Councils information, but organized "blockages" and "wildcat strikes" instead.

"Fair Opportunities"?

On November 1, 2015, the formal transition of conventional energy division of ALSTOM to GE became effective. The EU competition control authorities had given the green light for it - but on the condition that the heavy gas turbines section is sold to the Italian-Chinese competitor Ansaldo. This decision weakens the Mannheim plant especially.


The demand of the works council to obtain fair opportunities under the new owner was answered by GE with the above outlined clear-cutting program. After 30 years of struggle against job cuts Käfertaler colleagues had to revive their old slogan "Résistance – Widerstand" [the French and the German word for “resistance”].


In this sense, the Mannheim IGM- shop steward committee of GE initiated an inter-occupational solidarity committee Rhein-Neckar ( This regional alliance for mutual support, align themselves with more and more company and union structures in different industries.


Above all, the GE workforce, its IGM-shop steward committee and the work councils are well advised to act and to fight together in a group. The aim should be to enforce the demands from 2014 by the works council for s protective shield for jobs and training places be - in Germany and internationally.