Read this article in:
27 November, 2006
A court in France last week sided with French energy trade unions, who argued that Gaz de France (GDF) needed to provide more information first to its European Works Council (EWC) before it can merge with Franco-Belgian utility group Suez. The court decision is likely to have serious repercussions on the planned €80 billion merger between GDF and Suez.
The unions filed the complaint after GDF failed to provide EWC members with crucial information, needed to get an informed opinion back to the company. The consultation process between the GDF and its EWC is one of the necessary steps in the merger process. The French judge last week ruled that GDF cannot take any decision on the merger before the EWC has given its opinion on the deal.
Trade unions are requiring from GDF information on the “social impact” of the planned merger. The unions are particularly concerned over the impact on employment, and seek details on the consequences of possible job losses and/or relocations in countries like France, The Netherlands, Italy and UK.
Because of the court decision, it became impossible for the boards of the companies to meet and take decisions last week, making it, in turn, impossible for shareholders to vote on the merger before the end of the year. That means that a vote on the merger will be postponed to some time early next year, possible until March or even later.
With French public opinion strongly in favour of state-controlled utility services, and with the French presidential elections looming early next year, unions representing GDF workers now believe it possible that the entire merger will be abandoned, particularly if the Socialist Party in France wins election.
On a separate issue, French unions at GDF strongly protested the planned decision by the presidents of GDF and Suez to assign only three seats, out of a total of 24, of the Administrative Council of the merged group to union representatives. That number would be the bare legal minimum. At GDF, unions have six seats out of 18.
A joint French trade union front, consisting of CGT, FNEM FO, CFE-CGC, and CFTC, has been resisting the government’s forced privatisation of Gaz de France, through the merger with the French-Belgian water and power concern. Another energy union, FCE-CFDT, while also hostile to the privatisation of GDF, suggests a separate solution, advocating a partnership between GDF and Suez. In a press release last week, FCE-CFDT repeated that position, saying it would have solved a lot of the current problems.