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Last Updated: Monday, 22 September, 2003, 05:33 GMT 06:33 UK
French PM upbeat on Alstom
Alstom train
Alstom is a major player in the transport market
French Prime Minister Jean-Pierre Raffarin has said he is "confident" a deal can be struck to rescue ailing engineering giant Alstom.

The government met banks at the weekend to work out a rescue package before a Monday deadline set by the European Commission.

The Commission on Wednesday rejected an initial bail-out plan on competition grounds.

Alstom is a French industrial icon with a workforce of about 110,000, including 11,000 in the UK, at factories in Birmingham, Rugby, Stafford and elsewhere.

Jobs threat

The company, which makes trains, gas turbines and cruise ships, has announced plans to cut jobs - including about half of its UK workforce - in an effort to stem losses.

It has been hit hard in recent months by weak power markets as well as cost overruns on key projects and accounting irregularities at its US operations.

It is also weighed down by debts estimated at 5bn euros (3.5bn; $5.6bn).

"I am confident... the problem has not been solved but we have come a good part of the way," Mr Raffarin said on French TV on Sunday.

"We made [the creditors] realise that bankruptcy would be a catastrophe. Together we are all on the verge of saving Alstom".

The government is reportedly asking the banks to provide 1bn euros to shore up the firm, while the state would inject a further 800m euros.

The BBC's Jeremy Howell
"Contracts are drying up"

EU blocks Alstom rescue plan
17 Sep 03  |  Business
Alstom confirms huge job cuts
10 Aug 03  |  Business

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