General Electric Co. (GE) - Get General Electric Company (GE) Report will pay 50 million euros ($57 million) for failing to meet a job creation target agreed to when it took over French group Alstom's energy business, France's Finance Ministry said on Tuesday.
When it bought Alstom's energy business in 2015, GE had committed to maintain jobs for at least three years in France and create 1,000 net new jobs by the end of 2018. However, GE has created only a net new 25 jobs in the face of weak demand for gas turbines, the Finance Ministry said in a statement Tuesday.
The U.S. conglomerate, which has been struggling with various underperforming units as well as maintaining its debt, is to pay the money into a re-industrialization fund bringing together representatives of the company, local authorities where it has plants, and the government, the ministry said.
GE last week reported adjusted non-GAAP earnings for the three months ended in December of 17 cents a share, down around 36% from the same period last year and below the 22-cent Wall Street forecast. However, revenue rose 5% to $33.28 billion, firmly ahead of the consensus forecast of $32.6 billion.
GE said it was able to retain or generate around $10 billion in cash over the quarter thanks to a dividend cut and the sale of parts of its stake in oil services group Baker Hughes (BHGE) - Get Baker Hughes, a GE Company Class A Report . Cash flow from operations, however, slowed 8.6% from last year to around $6.4 billion.
GE shares rose 4.1% to $10.63 in Tuesday's trading on the New York Stock Exchange.