News Archive


GM recalls half million Camaros, safety crisis deepens


DETROIT (Reuters) – General Motors Co (GM.N) recalled 511,528 Chevrolet Camaros on Friday for an ignition switch problem similar to the defect linked to at least 13 deaths in Chevrolet Cobalts and other models.

GM said it was aware of minor accidents but no fatalities from the Camaro, a sporty two-door car. It said the Camaro switch defect differed from the problem in the Cobalts, but a consumer advocate said GM still should have recalled the Camaros sooner.

GM said a driver’s knee could bump the Camaro key fob and move the ignition switch out of the “run” position, causing the engine to shut off.

The earlier recall of Cobalts and other small cars involved an ignition switch in which a bump of the key fob could turn off the engine, disabling power steering and airbags.

That defect, first observed by GM engineers in 2002, was not reported to consumers for years. Chief Executive Mary Barra in recent months overhauled the way GM handles safety recalls.

The Camaro recall bloats the number of GM vehicles summoned back for switch-related problems to more than 3.1 million as Barra prepares to return to Congress next week to give more testimony on the earlier recall.

“It is troubling that GM continues to announce ignition switch-related recalls on late-model vehicles (which) raises questions about how pervasive the problem is and why it is taking so long for GM to act,” said Representative Henry Waxman of California, the senior Democrat on the House Energy and Commerce Committee that is investigating GM.

Barra will be joined by Anton Valukas, chairman of GM’s outside law firm Jenner Block, who conducted a months-long investigation that detailed deep flaws in GM’s internal decision-making process.

The so-called Valukas report, made public last week, triggered the departures of 15 GM employees, including several high-ranking executives in the legal, engineering and public policy groups.

GM’s 3.1 million switch-related recalls are a fraction of the record 16.5 million cars the automaker has recalled this year in 38 actions. That’s about as many cars as the entire auto industry expects to sell this year in the United States.

The switch problem in this recall, of Camaros from model years 2010 to 2014, is “not at all related to the Cobalt,” GM safety spokesman Alan Adler said in an interview. “The condition here is a switchblade key” in which a key pops out of the key fob when a small button is depressed.

The problem with the Camaro switch “is an external bumping issue,” Adler said. He said it involves “an atypical seating situation. If you sit somewhat normally and don’t pull your seat way up, you are not going to have this problem.”

The Cobalt and Ion had a similar issue involving the location of the switch on the steering column and the tendency of some drivers to bump that switch. Some other key issues also are similar: When the key fob is bumped and the switch is moved out of the run position, the engine can turn off, causing loss of power steering and failure of airbags to deploy in a crash.

GM said it was aware of three crashes causing four minor injuries linked to the issue in Camaro. Adler said air bags did not deploy in those crashes and he did not know details.

GM “should have recalled” the Camaro earlier, said Clarence Ditlow, director of the Center for Auto Safety, a Washington-based watchdog group. “GM said it’s not the same problem, but it’s a first cousin,” Ditlow said.

Adler said GM would send letters to Camaro owners, advising them to visit dealers to get a new key made. Until then, he said GM is advising Camaro owners to “drive the car and be aware” of the problem.

The U.S. National Highway Traffic Safety Administration, which is responsible for overseeing safety defects and recalls, had not yet posted an official Camaro recall notice, but the agency has received and posted several consumer complaints.

NHTSA said Friday afternoon it had not received GM’s official recall notice on the Camaro, but “is monitoring the issue closely.”

Lawmakers have criticized NHTSA for not acting more swiftly to recall GM small cars with defective switches.

The agency awarded the 2012-2014 Camaro five-star safety ratings, its highest, for safety in front, side and rollover crashes.

Adler said GM discovered the issue in the Camaro as it was testing a wide range of its 2014-2016 models after the widely publicized small-car ignition switch recall.

Jeff Boyer, appointed to the new position of vice president for GM global safety earlier this year in response to the small-car ignition switch recall, said the Camaro recall was a quick action that is “the new norm for product safety at GM,” according to the press statement.

GM shares closed at $35.63, up 11 cents.

(Additional reporting by Richard Cowan in Washington and Thyagaraju Adinarayan in Bangalore; Editing by Meredith Mazzilli, Bernadette Baum and David Gregorio)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/bSshD-ZbPmg/story01.htm

FCC looking into slow Internet download speeds


WASHINGTON (Reuters) – U.S. regulators will review agreements between Netflix, Verizon, Comcast and other content and Internet providers to figure out whether they are causing slow web download speeds for some consumers, especially for streaming video content.

Consumers have complained to the Federal Communications Commission about the ongoing spat between Netflix and Internet service providers (ISPs). Both sides accuse each other of causing a slowdown in Internet speeds by the way they route traffic.

“At the heart of this is whether ISPs that provide connectivity in the final mile to the home can advantage or disadvantage content providers, and therefore advantage or disadvantage consumers,” FCC Chairman Tom Wheeler said on Friday.

Large content providers such as Netflix Inc (NFLX.O) have historically paid middlemen or ISPs to deliver their content to consumers. The specifics of such agreements, known as “interconnection” and sometimes “peering,” have been secret and outside of the FCC’s regulatory scope.

The FCC earlier this year launched a new effort to set rules regulating how broadband providers manage Internet traffic on their networks. Netflix has urged the agency to begin regulating such agreements to do away with fees that content companies pay.

Though the FCC has not indicated that it plans to regulate the deals, the agency is now asking multiple Internet service providers and content companies, particularly video service providers, to provide details, Wheeler said.

“Consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for,” he told reporters after a monthly FCC meeting.

“What we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I,” he said.

In an earlier statement Wheeler said the commission is “not suggesting that any company is at fault.”

Consumer advocates, who support stricter regulatory oversight of relationships between content and Internet providers, welcomed the step and called on the FCC to make details of those agreements public.

It is unclear whether the FCC plans to do so.

Analysts pegged the FCC’s move as a win for Netflix, which on Friday welcomed the move toward more transparency.

“Americans deserve to get the speed and quality of Internet access they pay for,” Netflix spokesman Joris Evers said in a statement.

Netflix earlier this year agreed to pay fees to Verizon Communications (VZ.N) and Comcast (CMCSA.O) to bypass middlemen and deliver content directly to the companies’ subscribers, ensuring faster speeds.

“Netflix has been paying (for traffic delivery) since inception. It wants free, I get it, but someone has to pay for it,” Jim Cicconi, ATT Inc (T.N) senior executive vice president for external and legislative affairs, said earlier this week.

Netflix streaming accounts for nearly one-third of North American web traffic during peak times, according to research by Sandvine Corp.

Netflix vice president for global public policy, Christopher Libertelli, this week said the company already invests money in delivering traffic to the Internet provider.

“We pay a lot of money to drop content at the doorstep of an ISP. All we’re really asking is for the ISPs to swing the door open,” Libertelli said at the Aspen Institute think tank. “This has become a new choke point.”

The FCC has regulated “net neutrality” only on the part of the network that goes from the Internet service providers to the consumer, and has not delved into what happens before that. The agency’s proposed net neutrality rules keep that distinction.

Comcast, Verizon and ATT welcomed the FCC’s review on Friday. Internet providers pointed out that traffic exchange fees have long been negotiated through commercial agreements and said they hoped the review would focus on consumers and not a particular business model.

(Reporting By Marina Lopes and Alina Selykh in Washington and Lisa Richwine in Los Angeles; Editing by Ros Krasny and Chris Reese)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/bT495A3NzS4/story01.htm

Wall St. edges up on Intel but posts weekly decline


NEW YORK (Reuters) – U.S. stocks edged up on Friday, boosted by bullish news from the tech sector, but major indexes fell for the week as unrest in Iraq kept investors on edge.

Intel Corp (INTC.O) was one of the SP 500’s biggest gainers and one of Nasdaq’s most active names, but overall gains were capped as investors kept a close watch on violence in Iraq that drove oil prices CLc1 to their highest since September.

Analysts are worried about the impact a protracted period of high commodity prices could have on economic growth, especially with indexes near record levels.

President Barack Obama said on Friday he needs several days to determine how the United States will help Iraq deal with a militant insurgency, but he ruled out sending U.S. troops back into combat and said any intervention would be contingent on Iraqi leaders becoming more involved.

“The situation in Iraq is another one of these geopolitical flare-ups that have a short-term impact on the market. It will continue to create volatility in the oil market, but I don’t think it will spill over that much to equities,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.

The CBOE Volatility index VIX .VIX, Wall Street’s so-called fear gauge, fell 3 percent to 12.18 on Friday.

Intel shares jumped nearly 7 percent to $29.87 a day after the Dow component raised its full-year revenue outlook, citing stronger-than-expected demand for personal computers used by businesses.

OpenTable Inc (OPEN.O) popped 48.3 percent to $104.48 in heavy trading after Priceline Group Inc (PCLN.O) said it would buy the company for $2.6 billion. Priceline fell 3 percent to $1,189.30.

Among other Internet names, Yelp Inc (YELP.N) jumped 13.8 percent to $74.92 and GrubHub Inc (GRUB.N) rose 7 percent to $36.00.

The Dow Jones industrial average .DJI rose 41.55 points or 0.25 percent, to 16,775.74, the SP 500 .SPX gained 6.05 points or 0.31 percent, to 1,936.16, and the Nasdaq Composite .IXIC added 13.02 points or 0.3 percent, to 4,310.65.

For the week, the Dow was down 0.9 percent, the SP fell 0.7 percent and the Nasdaq was down 0.25 percent.

The week’s decline was the first after three weeks of consecutive gains on the SP 500. For the year, the broad market index is up about 4.8 percent.

Brent crude LCOc1 edged further above $113 a barrel on Friday, up about $4 since the start of the week, on concerns that an insurgency in Iraq could trigger civil war and eventually hit oil exports. [O/R]

In macroeconomic news, U.S. consumer sentiment unexpectedly fell in June as views by consumers with the lowest incomes soured, according to the preliminary June read from the Thomson Reuters/University of Michigan’s index.

Finisar Corp (FNSR.O) plunged 21.9 percent to $19.71 a day after forecasting weaker-than-expected earnings, citing higher capital expenditure in China.

Trading volume was at around 5.07 billion shares on U.S. exchanges, below last month’s average of about 5.76 billion, according to data from BATS Global Markets.

(Reporting by Angela Moon; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fxOqtoWYWnE/story01.htm

Exclusive: Honda expects to expand Takata airbag recall by more than 1 million cars


TOKYO (Reuters) – Honda Motor Co expects to recall more than 1 million more vehicles with potentially defective air bags, expanding a massive, multi-company air bag recall, according to a person with knowledge of the matter.

The recall involves faulty air bag inflators supplied by Takata Corp and would follow a similar move this week by Toyota Motor Corp. The Honda recall should be announced by the end of June, according to the person who asked not to be identified.

Honda, while waiting for further information from Takata on its inflator problems, is also investigating on its own how many vehicles it may need to call back and where they are, according to the individual. The number of vehicles it could recall is likely to exceed the 1.135 million vehicles Honda called back globally last year, the person said.

Asked whether Honda will expand airbag-related recalls from last year, spokeswoman Akemi Ando said: “We are conducting investigations quickly and if we decide that there are vehicles that should be called back, we will swiftly file for a recall.”

Toyota, the world’s largest automaker, on Wednesday called back 1.62 million previously recalled vehicles outside of Japan as well as 650,000 more in Japan not previously recalled. The additional vehicles brought to more than 7 million the total number of cars equipped with Takata air bags to be called back worldwide over the last five years.

Toyota’s recall from 2013 was a part of a bigger recall by car makers that also include Honda, Nissan Motor Co and BMW. In total, they recalled about 3.6 million vehicles with air bag inflators that could explode in an accident and send pieces of shrapnel into the vehicle.

Toyota said it has determined that the serial numbers of potentially faulty inflators that Takata previously supplied were incomplete. Takata said it supports Toyota’s decision to recall the vehicles.

The U.S. auto industry regulator, the National Highway Traffic Safety Administration, said it had opened a probe this week into an estimated 1,092,000 vehicles made by not only Toyota, but also Honda, Nissan, Mazda and Fiat SpA’s Chrysler Group after receiving six reports of air bags not deploying properly in the humid climates of Florida and Puerto Rico.

(Reporting by Yoko Kubota in Tokyo; Editing by Paul Lienert in Detroit and Peter Henderson in San Francisco)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Av12p3aVJVw/story01.htm

Alitalia board votes to accept Etihad offer, rapidly do deal: CEO


ROME (Reuters) – The board of Italy’s troubled airline Alitalia on Friday voted to accept an offer by Etihad Airways to invest in the company, and said it would move quickly to conclude the tie-up, the company’s chief executive said.

“Today the Etihad plan was approved, and the board delegated myself and the chairman to study and rapidly come up with a draft of the final contract,” Alitalia CEO Gabriele Del Torchio said.

Abu Dhabi-based Etihad is prepared to invest up to 1.25 billion euros ($1.70 billion) over the next four years, Italy’s transport minister said on Wednesday.

Italy’s flagship carrier Alitalia, which received a 500 million-euro government-engineered rescue package last year, risks running out of cash by August unless it can find a cash-rich partner.

In a statement the privately held airline said it approved its 2013 balance sheet, without giving details. It said only that it wrote down 233 million euros in charges and devaluations for 2013 “in preparation for future strategies”.

A source with knowledge of the company’s 2013 balance sheet said losses, excluding the write-down, amounted to about 290 million euros.

Alitalia is still negotiating with banks about restructuring about 700 million euros in debt, Del Torchio also said.

“We’re proceeding, but you must understand that the sums are not small. We’re still working on it,” he said.

(Reporting by Alberto Sisto, writing by Steve Scherer; editing by Susan Thomas)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Cl_wRwMad38/story01.htm

Ackman sues Allergan over questions about poison pill


(Reuters) – William Ackman’s Pershing Square Capital Management on Friday it filed a lawsuit against Allergan Inc (AGN.N) seeking confirmation that its request to hold a special meeting of Allergan shareholders would not trigger poison pill takeover defense.

Ackman and Valeant Pharmaceuticals International (VRX.TO) (VRX.N) are pursuing in a hostile takeover of Allergan.

Ackman, who owns nearly 10 percent of Allergan, has called for a shareholder meeting to elect new directors to the company’s board. The suit seeks to confirm that Ackman is not about to trigger Allergan’s poison pill takeover defense as it seeks shareholder support for the meeting.

Allergan, which makes Botox for wrinkles and other uses, has rejected a $53 billion joint offer from Ackman and Valeant. Ackman last week filed documents with the Securities and Exchange Commission that would start a proxy battle.

Allergan and Valeant both declined to comment on the suit.

Allergan adopted a one-year shareholder rights plan, often called a poison pill, on April 22, the day Valeant and Ackman made their offer. The company said it needed time to consider takeover proposals.

Allergan’s pill will be triggered if a person or group acquires 10 percent or more of its shares. A poison pill aims to dilute a stock’s value by flooding the market with more shares; this makes it pricier for a shareholder to get a controlling stake.

The lawsuit filed in Delaware Court of Chancery said it followed a request to Allergan from Pershing Square on June 6 seeking confirmation that Allergan would not use its poison pill to impede Ackman’s request for a special meeting.

Allergan’s bylaws require that a group calling a special meeting collectively represents 25 percent of shares outstanding. In the suit, Ackman says he is concerned that by calling the meeting, it will trigger the pill.

A response from Allergan’s counsel dated June 11 did not provide confirmation that it would not, the document said.

Allergan said in the letter to Pershing Square that its solicitation and receipt of proxies from other Allergan stockholders for the purpose of requesting a special meeting would not, in and of itself, trigger the pill.

Allergan declined to answer more specific questions about the details of Pershing Square’s plan for soliciting those proxies in the absence of all the facts, according to a copy of the letter included in the lawsuit.

Allergan rejected a sweetened offer from Valeant and the activist investor on Tuesday.

Valeant shares traded in New York fell 0.3 percent to $120.40 while Allergan shares rose 0.6 percent to $162.97.

(Reporting by Natalie Grover and Sweta Singh and Caroline Humer in New York; Editing by Ted Kerr, Bernadette Baum and Dan Grebler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/a-dvTO0cQtQ/story01.htm

Chesapeake shareholders approve big governance reforms


HOUSTON (Reuters) – Chesapeake Energy Corp (CHK.N) shareholders on Friday approved a series of reforms that included the elimination of three-year terms for directors, deepening an overhaul that began in the months preceding the 2013 ouster of former Chief Executive Officer Aubrey McClendon.

Since McClendon’s departure in April last year, the board under Chairman Archie Dunham and the company’s largest shareholders, including billionaire Carl Icahn, have made reform a priority. Chesapeake had been criticized for McClendon’s heavy spending and a governance crisis.

Preliminary results from the company’s annual meeting, which was webcast, showed that 98 percent of Chesapeake’s shareholders who voted backed measures to increase the size of the company’s board of directors and to allow individuals or groups owning 3 percent or more of the company’s shares to nominate directors.

Investors also voted by a 95 percent margin in favor of Chesapeake’s pay packages for executives. In June of 2012, only 20 percent of the company’s shareholders backed the compensation plan.

Erik Gordon, a professor at the University of Michigan’s Ross School of Business who tracks governance issues, said he was encouraged by the changes.

“For all the talk about good governance, we rarely see a company take measures to improve itself,” he said.

Icahn and top shareholder O. Mason Hawkins took control of the board of directors in June 2012 when Chesapeake faced financial peril and there was lax oversight of McClendon by the previous board.

Under Chief Executive Officer Doug Lawler who started the job about a year ago, Chesapeake has slashed spending, sold assets and promised to focus on drilling wells that will bring the best returns to shareholders.

For example capital expenditures soared above $13 billion under McClendon as he snapped up millions of acres to drill, but this year Chesapeake said it expects to spend little more than $5 billion.

Shares of Chesapeake, which is based in Oklahoma City, Oklahoma, are trading around a three-year high. On Friday, the stock was down 9 cents at $30.40 in afternoon New York Stock Exchange trading.

(Reporting by Anna Driver; Editing by Leslie Adler, Terry Wade and Tom Brown)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Kmvv11HSSFw/story01.htm

Wall St. edges up as Intel leads gains in tech


NEW YORK (Reuters) – U.S. stocks edged up on Friday, boosted by bullish news from the tech sector, but major indexes remained on track to snap a multi-week string of gains.

Intel Corp (INTC.O) was one of the SP 500’s biggest gainers and one of Nasdaq’s most active name, but overall gains were capped as investors remained cautious about violence in Iraq, which has taken oil prices CLc1 to their highest since September.

Analysts are worried about the impact a protracted period of high commodity prices could have on economic growth, especially with indexes near record levels.

President Barack Obama said on Friday he needs several days to determine how the United States will help Iraq deal with a militant insurgency, but he ruled out sending U.S. troops back into combat and said any intervention would be contingent on Iraqi leaders becoming more involved.

Intel shares jumped nearly 7 percent to $29.87 a day after the Dow component raised its full-year revenue outlook, citing stronger-than-expected demand for personal computers used by businesses.

“The market isn’t cheap, but it isn’t crazy expensive and the sectors that are looking better are cyclical in nature,” said Michael Mullaney, chief investment officer at Fiduciary Trust Co in Boston. “Tech has been doing well from a price return standpoint, and that should continue.”

OpenTable Inc (OPEN.O) popped 47 percent to $103.52 in heavy trading after Priceline Group Inc (PCLN.O) said it would buy the company for $2.6 billion. Priceline fell 1.7 percent to $1,205.42.

Among other Internet names, Yelp Inc (YELP.N) jumped 14 percent to $74.99 and GrubHub Inc (GRUB.N) rose 8.2 percent to $36.41.

The Dow Jones industrial average .DJI rose 24.12 points or 0.14 percent, to 16,758.31, the SP 500 .SPX gained 4.45 points or 0.23 percent, to 1,934.56 and the Nasdaq Composite .IXIC added 13.20 points or 0.31 percent, to 4,310.83.

For the week, the Dow is down 1 percent, the SP is down 0.8 percent and the Nasdaq is down 0.2 percent.

The CBOE Volatility index VIX .VIX, Wall Street’s so-called fear gauge, fell 4.6 percent to 11.98 on Friday but was still up more than 10 percent for the week after Thursday’s selloff triggered a spike in the index.

We are “intermediate-term bullish, understanding that the overbought conditions can produce sharp but short-lived pullbacks at any time,” said Larry McMillan, president of McMillan Analysis Corp in Morristown, New Jersey, in a note to clients.

The week’s decline would be the first after three weeks of consecutive gains on the SP 500. For the year, the broad market index is up nearly 5 percent.

Brent crude LCOc1 edged further above $113 a barrel on Friday, up about $4 since the start of the week, on concerns that an insurgency in Iraq could trigger civil war and eventually hit oil exports. [O/R]

In macroeconomic news, U.S. consumer sentiment unexpectedly fell in June as views by consumers with the lowest incomes soured, according to the preliminary June read from the Thomson Reuters/University of Michigan’s index.

Finisar Corp (FNSR.O) plunged 23 percent to $19.49 a day after forecasting weaker-than-expected earnings, citing higher capital expenditure in China.

(Reporting by Angela Moon; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/fxOqtoWYWnE/story01.htm

Siemens and Mitsubishi finalize Alstom offer


MUNICH/PARIS (Reuters) – Germany’s Siemens (SIEGn.DE) and Japan’s Mitsubishi Heavy Industries (7011.T) are putting the finishing touches on a joint offer for Alstom’s (ALSO.PA) turbine businesses that includes a cash element of roughly 9 billion euros ($12.25 billion), sources close to the bidders said.

Under the complex offer, which would counter an existing $17 billion offer from U.S. conglomerate General Electric (GE.N) for Alstom’s power arm, Siemens would acquire Alstom’s gas turbines business while Mitsubishi would inject cash and industrial assets into a joint venture in steam turbines, the sources said.

As part of the deal, Mitsubishi and the French government would take equal stakes in Alstom, acquiring a portion of the 29 percent holding of French group Bouygues (BOUY.PA), union representatives said after meeting with Economy Minister Arnaud Montebourg.

“The minister described Mitsubishi’s offer… Clearly, this is an alliance scheme that counters GE’s proposal,” said Gabriel Artero, CFE-CGC union representative of France’s steelworkers federation.

“The state and Mitsubishi would take joint and equal stakes in Alstom,” he said, adding that these holdings could reach 5 to 10 percent each. “Having the government take a majority stake is not something being considered.”

Alstom would keep control of its energy transmission and renewables activities, which would not be part of the Siemens-Mitsubishi bid.

In a second step that one source described as “completely independent” of the turbines deal, Siemens and Alstom would combine their rail activities.

It is still unclear what stakes the two firms would have in this business. If the French government took a stake, one senior source said Berlin would also consider buying shares in order to stay at “eye level” with Paris in a group combining the high-speed ICE and TGV train activities of Siemens and Alstom.

“What is being discussed is an industrial and commercial partnership in turbines,” one source familiar with the matter told Reuters. “But it’s not enough for a deal to make sense on paper. You need to see the stars align.”

Two separate sources said Siemens and Mitsubishi would be offering about 9 billion euros in cash under the turbines offer. That compares to the 12.35 billion euros ($16.9 billion) offered by U.S. conglomerate General Electric (GE.N) for all of Alstom’s energy assets, including turbines, renewables and grid operations.

“The offer can’t be compared with that of GE as they’re so different in nature,” another source close to Mitsubishi said.

Siemens, Alstom, Mitsubishi and Bouygues all declined comment. A GE spokeswoman said: “We are very confident in our proposal.”

UNWIELDY HOLDING

Under the proposed offer, which is expected to be rubber stamped by the supervisory board of Siemens on Sunday evening, Alstom would have a future in the energy business and be at the center of a European rail champion — both potentially attractive prospects for the French government.

“GE could still win a deal but for that they would have to do what the French government wants, in other words come up with an alliance rather than a buyout,” one source close to the matter said.

But the complex proposal would also turn Alstom into an unwieldy holding company, with myriad stakes in disparate businesses. That may ultimately make it difficult for Siemens and Mitsubishi to convince Paris that its deal is a jobs creator.

When GE Chief Executive Jeff Immelt met with French President Francois Hollande last month, he promised to create 1,000 new engineering and manufacturing jobs within three years, according to sources close to the talks.

French Economy Minister Arnaud Montebourg reiterated in a newspaper interview on Friday that he favored an alliance that preserved Alstom’s identity, industrial sites, decision centers and jobs.

He said a tie-up with Mitsubishi would be “a serious alternative” to GE’s proposal, but he added the government was still waiting for the Japanese group to make a formal move.

(Additional reporting by Alexander Huebner in Frankfurt, Gernot Heller in Berlin, Jean-Baptiste Vey, Natalie Huet and Matthieu Protard in Paris, Lewis Krauskopf in New York; Writing by Noah Barkin)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/BQ02k61n60I/story01.htm