Bilger, Pierre 1941–

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Pierre Bilger

Former chairman and chief executive officer, ALSTOM

Nationality: French.

Born: 1941, in France.

Family: Married (wife's name unknown); children: five.

Career: Compagnie Générale d'Électricité, 19821991; GEC Alsthom, 19911998, chairman; ALSTOM SA, 19982003, chairman and CEO.

Awards: Honorary Commander of Order of the British Empire, 2002.

Formerly one of France's top business leaders, Pierre Bilger stepped down earlier than planned from his post as chairman of the international, French-based ALSTOM engineering conglomerate. Under his stewardship, the once-giant company eventually found itself on the brink of bankruptcy. Although credited with having served ALSTOM and its predecessors well during his 20-plus-year career, Bilger received harsh criticism for his actions during the final years of his tenure. He gained more positive renown when he became the first corporate executive in France's history to hand back a huge severance package. Bilger received an honorary CBE in 2002, just prior to ALSTOM's failure.


Bilger began his career with France's Ministry of the Economy and joined Compagnie Générale d'Électricité in 1982. By 1989 the French-based corporation was a giant in the telecommunications world and had changed its name to Alcatel Alsthom. That same year, Alcatel Alsthom embarked on a joint venture with the multinational, U.K.-based, electrical-engineering giant General Electric Company (now known as Marconi). The two conglomerations combined their capabilities in power-generation and distribution in a 50-50 partnership deal. The new venture was named GEC Alsthom; Bilger joined the new company and in 1991 became chairman.

In June 1998 GEC Alsthom was spun off by its parent companies and renamed ALSTOM SA in order to present, according to Joseph Fitchett in the International Herald Tribune, "an international image that signals it is making something new of something old" (June 2, 1998). Bilger was elected CEO. Before it floated, the new company was valued at between 40 and 50 billion French francs ($6.668.33 billion) and paid its parent companies EUR 1.2 billion in a special dividend. The payment left the company virtually penniless. However, in its initial public offering (IPO), just over half of ALSTOM's shares went on the market in what became the largest public stock offering in Europe that year. Shares sold at around 205 French francs (slightly more than EUR 31) on stock exchanges in Paris, London, and New York. Stock market value was estimated at $4.3 billion, and a jubilant Bilger noted that the global IPO was more than three times oversubscribed. A BBC news article quoted him as saying, "We begin life as a publicly-quoted company with a quality shareholder base and a sound platform on which to realise our ambitions" (June 22, 1998).

Bilger's ambitions were grand. According to Fitchett, Bilger said of the new company, "We will be managing our destiny for ourselves and no longer as part of a much larger ensemble" (June 2, 1998). However, while GEC Alsthom was given day-to-day autonomy, it remained under the control ofand funneled its profits intoits parent companies and had to incorporate the objectives and opinions of two separate groups of shareholders. Bilger's goal was to take the new company to world-class levels in several areas, particularly in the sectors of power generation and distribution and rail transit. Another major goal was to take the company's core businessbuilding turbinesinto the global marketplace. Fitchett wrote, "In meeting their own targets of performance and clear governance, ALSTOM has the advantage of a proven team in Mr. Bilger and Mr. Cronin [managing director and deputy CEO], both of whom were present at the creation of GEC Alsthom a decade ago" (June 2, 1998).

At the time of its inception, ALSTOM was renowned for its profitability and somewhat unique position as a joint French-British operation. In the transportation industry, ALSTOM's banner product was its French-engineered, high-speed TGV trains. It also manufactured Eurostar trains and was contracted to supply tilting trains for the West Coast line between Glasgow and London. On the shipping side, it built ships for major cruise lines, including the Queen Mary 2the largest cruise ship ever builtfor Carnival. It also built naval vessels and natural-gas tankers.

In the field of power generation and distribution, ALSTOM was still behind the giant U.S. company General Electric and two other world leadersSiemens, the German-based electrical-engineering and electronics conglomerate, and the Swiss engineering group Asea Brown Boveri (ABB). In March 1999, in pursuit of his goal to make ALSTOM a world leader in the power industry, Bilger announced that ALSTOM and ABB would embark on a 50-50 joint merger of their power generation businesses, which they named ABB ALSTOM Power. To account for the differences in the sizes of the two companies, ALSTOM paid ABB a cash compensation of EUR 1.4 billion. In a press release on the ABB Web site, Bilger stated, "This move will be a strong accelerator for the performance of both parent companies." A year later ALSTOM gained further autonomy when it bought ABB's share of ABB ALSTOM for EUR 1.25 billion. The new company became known simply as ALSTOM Power.


Four months later in July 2000 ALSTOM began to experience financial difficulties. There were serious and costly problems associated with the heavy-duty gas-turbine technology purchased from ABB. Although Bigler announced to shareholders that the difficulties would not affect profit margins, shares fell 15 percent on the day of the announcement. Next, following the September 11, 2001, terrorist attacks in the United States, several major cruise-liner orders failed. One of ALSTOM's clients, Florida-based Renaissance, filed bankruptcy. On September 24, Jean-Christophe Mounicq, writing for Tech Central Station, accused Bilger of bad management. Mounicq referred specifically to the Renaissance failure, noting that ALSTOM had taken on the contract without demanding collateral. Once again, an announcement from ALSTOM's corporate offices reassured shareholders that the company was covered against such incidents, but it also confirmed that the company's exposure could be as high as EUR 684 million. Once again, shares droppedthis time by almost 40 percent over two days.

In March 2002 Bilger announced his Restore Value plan, which was ultimately unsuccessful. In March 2003, nine months ahead of schedule and as the former showcase of French technology was bound for bankruptcy, Bilger proposed he step down as chairman and that Patrick Kron, recently elected CEO, take his place. Kron praised Bilger for developing the company into a world leader in transport and energy with a strong reputation for innovation. According to a report produced by the InterNet Bankruptcy Library, Kron said: "Together with the Board members and all the staff of the Company, I pay tribute to Pierre and his strong personal commitment" (March 14, 2003). Kron then announced a restructuring plan, but the next day ALSTOM stocks fell 50 percent to less than EUR 1. In the 2003 fiscal year ALSTOM suffered a net loss of EUR 1.38 billion. The company was forced to sell off its most profitable arm and Bilger's babyits power transmission capabilities.

Shortly thereafter, in an incident unrelated to the company's crash, Bilger and two other former ALSTOM executives were taken into custody as part of a judicial investigation into allegations of illegal commissions paid out during the 1994 construction of new ALSTOM transport headquarters in Paris. Judicial sources said the secret commissions were worth several million euros.

More bad news was yet to break: in June 2003, ALSTOM executives revealed that the U.S. Federal Bureau of Investigation and the Securities and Exchange Commission were conducting investigations into "significantly understated" losses experienced by ALSTOM's U.S. transport unit. Outside auditors discovered $58 million in unreported losses, and the company was charged that amount for accounting irregularities, further adding to its fiscal-year loss of $1.56 billion on sales of $24 billion. Between 2001 and 2003, under Bilger as chairman and chief executive, the company's debt soared to more than $5 billion and its share prices plummeted by 90 percent. London-based Deutsche Bank analyst Andrew Carter was quoted in BusinessWeek as saying, "ALSTOM's future is in the hands of the banks. Its shares are worthless" (July 21, 2003). Mounicq stated, "Alstom was the showcase of French technology. It is now the showcase of French bankruptcy" (October 24, 2003). ALSTOM staved off bankruptcy, however, after a highly controversial EUR 3.4 billion bailout by the French government in return for a 31.5 percent stake in the company. Analysts still wondered whether the bailout would be sufficient to revive the company, which did 90 percent of its business outside of France.

In a Business Week article, Carol Matlack noted that Kron indirectly defended Bilger's leadership of ALSTOM, believing the company was a victim of circumstances beyond anyone's control. He said that the company could not have been scuttled by one factor alone, but the combined circumstances had disastrous consequences. Matlack wrote, "Fair enough. But Alstom's previous management made things worse by repeatedly assuring investors that the company's problems were under control, only to acknowledge later that the woes were far worse than previously disclosed" (July 21, 2003). Regardless of such criticism, ALSTOM's board awarded Bilger a EUR 4.1 million severance payout that many called a "reward for failure." The payout enraged French investors, most of who blamed the company's collapse on Bilger's ambition and reckless leadership. John Tagliabue noted in the New York Times that Bilger was "bitterly criticized" during the company's July 2003 shareholder meeting for accepting the payout (August 19, 2003).


On August 14, 2003, in an entirely unprecedented move, Bilger sent a letter to his successor stating that he would return the payoutthe first time an executive had returned a payout to a French corporation. According to Noah Barkin, writing for, Bilger stated that he made the decision so as not to be an "object of scandal for the roughly 100,000 ALSTOM employees that it was my honour to direct for 12 years, nor among shareholders who trusted me from 1998." He also said he wanted to be able to look himself in the mirror when he thought about the people with whom he had worked. Some analysts, however, suggested Bilger's move was due to pressure from the French government. Colette Neuville, president of the shareholder group that so heavily criticized Bilger, was quoted by Tagliabue as saying, "We welcome it, even if it was not entirely spontaneous" (August 19, 2003). Tagliabue also said Bilger may have been trying to head off investigations that could have led to more and deeper problems.

Others gave Bilger considerable credit for his actions, contrasting him with Jean-Marie Messier, the former head of the troubled Vivendi, who, according to David Gow of the Guardian, received a EUR 20.5 million payoff "on the say-so of just one director without board approval and who faces French court proceedings to prevent him receiving the money" (August 19, 2003). Messier refused to relinquish the payoff of his own volition. Bilger did declare that his payout was his contractual due and was approved by the full board, and he was adamant that it was no golden parachute but was appropriately calculated in recognition of his more than 20 years of service since joining Compagnie Générale d'Électricité. He also stated that returning the money was unfair to his family, who had been profoundly affected by his complete dedication to the company over those twenty years. Alex Duval Smith and Katherine Griffiths of the New Zealand Herald quoted Bilger as remarking, "Whatever anyone may say, I have always been very careful to respect the principles of corporate governance" (August 23, 2003).

See also entries on Compagnie Générale d'Électricité and ALSTHOM in International Directory of Company Histories.

sources for further information

"ABB and ALSTOM Create World Leader in Power Generation," ABB, Press Releases,

"ALSTOM SA: Patrick Kron Succeeds Pierre Bilger as Chairman," InterNet Bankruptcy Library, March 14, 2003.

"Alstom Steams Ahead," BBC News, June 22, 1998,

Barkin, Noah, "Ex-Alstom Chief to Waive Severance Package,", August 18, 2003,

Fitchett, Joseph, "GEC Alstom Flotation to Unleash Major Player in Power and Rail," International Herald Tribune, June 2, 1998,

Gow, David, "Former Alstom Chief to Return His £2.7m Payoff," The Guardian, August 19, 2003,,1204,1021483,00.html.

Matlack, Carol, "Can Alstom Get Back on Track? It's a Financial Wreck, and the Rescue Plan May Not Work," BusinessWeek Online, July 21, 2003,

Mounicq, Jean-Christophe, "Liberté, Égalité, Bankruptcy!" Tech Central Station, October 24, 2003,

Smith, Alex Duval, and Katherine Griffiths, "Conscience Sparks Return of $7.8m," New Zealand Herald, August 23, 2003.

Tagliabue, John, "Alstom's Ex-Chief Rejects Severance Pay Package," New York Times, August 19, 2003,

Marie L. Thompson