​Alstom, the world’s second-largest rail vehicle maker, is struggling financially due to debt and will cut 1,500 jobs. The company has many orders but is behind in fulfilling them, especially those it received through its 2021 takeover of rival Bombardier Transport. Alstom is due to supply “overground” trains for Romania, as well as metro trains for Bucharest, but has been late with deliveries.

Alstom Group has announced a comprehensive cost-cutting plan that will cut 1,500 full-time jobs as the move is linked to the final phase of completing the integration of Bombardier operations in early 2025.

Many times when an industrial company buys a large competitor, job cuts occur, especially when some positions overlap. Alstom will cut staff also because financial results have been weak, especially in terms of profit.

Alstom has debts of 3.4 billion euros and aims to reduce them by the spring of 2025 below the threshold of 1.5 billion euros.

In the first half of the year, Alstom’s turnover was €8.4 billion, and the value of orders for rolling stock from around the world exceeds €90 billion, which will span many years, but there are long delays in their fulfillment. 30 billion of the 90 billion euros in the order book “inherited” from the takeover of Bombardier.

Alstom promises to honor all contracts, but its immediate problem is its inability to generate cash flow from its business. These problems arose for a number of reasons, mainly because the rapid increase in production required large investments and a lot was spent stockpiling components where there was a risk of supply disruptions.

Some of the orders received from Bombardier are not being fulfilled and there are also delays in the mega contract to deliver more than 400 trains to the United Kingdom.

Sources: AFP, Financial Times, Le Monde

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