Invest-Québec express, July 2010

The environment: a major issue for Alstom

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The Canadian and American subsidiaries of Alstom have maintained their growth objectives despite the significant environmental challenges they’ve faced.

Alstom has weathered many economic crises throughout its history. But according to Pierre Gauthier, President and Chief Executive Officer of Alstom Canada and US, the crisis that’s now ending was different in that it was accompanied by serious debate on climate change and greenhouse gas emissions. “That debate has had a crucial impact on our most important sector—power generation—which suddenly contracted over the past year and declined by 50% worldwide,” says Gauthier.

For Alstom, environmental issues have become almost as important as the crisis itself, as they have stemmed investment in power generation in many countries. “The US has been particularly hard hit,” stresses Gauthier. “The crisis there has resulted in a decrease in consumption and, thus, in the demand among our power generating customers. Most of those companies are now waiting to find out more about the new US energy policy rules before they start up new projects.”

Different situations

In Canada, the situation has been different. There has not been a substantial decline in demand and, since hydropower accounts for much of the energy generated, investment has continued. The Alstom Hydro plant in Sorel-Tracy, which supplies hydropower equipment and services, has not experienced any slowdown.

As for Alstom Transport, whose customer base consists primarily of government and quasi-government corporations, the level of activity has remained relatively steady. A number of governments have invested in this sector in the hope of kick-starting the economy. In the United States, for example, President Obama’s recovery plan has allocated some $8 billion to rail transport.

Staying the course

Despite the crisis, Alstom has maintained its growth objectives. “What’s changed is how we achieve those objectives,” explains Gauthier. “We decided to enter sectors in North America, such as wind power, where Alstom had been active only in Europe. We’ve now begun construction of a wind turbine nacelle assembly plant in Texas.”

Alstom also decided to improve its competitive position on its traditional markets. This year, it will be inaugurating one of its largest turbine manufacturing facilities for nuclear and fossil applications, in Tennessee. “The crisis also brought with it numerous opportunities,” remarks Gauthier. “We recently invested in BrightSource Energy, which specializes in the design, construction and operation of solar power plants, and we’ve signed an agreement with a Canadian company that owns underwater technology. That technology will be developed at the Alstom Hydro plant in Sorel-Tracy.” In addition, the multinational has ventured into the high-voltage transmission sector, with the recent acquisition of the Transmission Division of Areva, which owns a plant in La Prairie.

For Pierre Gauthier, none of this would have been possible without the excellent operational performance of the subsidiaries he oversees—an aspect the parent company strongly emphasizes. “We were well poised to seize these business opportunities because we were financially sound. That’s essential for coming through a crisis unscathed.”

	Alstom, a global leader in power generation and rail infrastructure, is well known for its innovative, non-polluting technologies. The French multinational, headquartered in Paris, employs more than 81,000 people in 70 countries, including 1,500 in Canada.

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