For the unions, the government has crossed two red lines - the use of ordonnances, executive orders that fast-track the plan by reducing the time of parliamentary debate, and a plan to abolish railworkers' special employment status, decried as a "privilege" by ministers and media commentators.
So the four unions with elected representatives in the company were to meet at 5.00pm on Tuesday to discuss strike action.
The strongest one, the CGT, has already called for a day of protest on 22 March but now says it is ready to launch strike action.
"To force the government to back down, a month-long strike will no doubt be necessary," its railworkers' leader, Laurent Brun, told Le Parisien newspaper.
Another usually less militant union, the CFDT, has proposed an indefinite strike to start on 14 March.
The other two organisations also indicated they were ready for a fight.
The government has promised a two-month consultation process and Transport Minister Elisabeth Borne is to hold a first meeting with unions on Thursday.
After commissioning a report from former Air France boss Jean-Cyril Spinetta, Prime Minister Edouard Philippe unveiled the government's plans to reform the SNCF on Monday.
The company is in debt to the tune of 46.6 billion euros, with that sum rising by about three billion euros a year, and will be opened up to competition in 2019, to comply with European Union law.
In this situation, "the status quo is no longer possible", government spokesman Benjamin Griveaux said on Tuesday, while accepting that "clearly there will be a strike".
Economy Minister Bruno Le Maire and Budget Minister Gérald Darmanin both suggested that the government could take over responsibility for the debt but only on condition that the company is "transformed".
The debt is owed by the SNCF's permanent way branch, which is responsible for the track and other infrastructure and became a separate company to the branch that runs the trains in 1997.
The government claims that it does not want the SNCF to be privatised and that sorting out the debt and abolishing the special employment status is essential for the company to become competitive.
In fact, rail freight has already been opened up to competition and the SNCF has lost 40 percent of its trade to about 20 rival operators, who may be regretting their investment today since the market has drastically declined.
Regional train services will be opened up to competition in 2019, meaning that the SNCF will have to compete for contracts with private operators.
Several regional authorities have declared their intention of pressing ahead with the process as quickly as possible.
But many branch lines are highly unprofitable and the government rejected Spinetta's proposal to audit them with a view to closures after protests from MPs and local politicians.
That leaves a question mark over their future should more profitable lines be privatised.
Main lines, such as the TGV high-speed service, will cease to be a state monopoly in December 2020.
Shortage of train drivers
CGT leader Philippe Martinez on Tuesday denounced a "campaign of lies" about railworkers' employment status, accusing President Emmanuel Macron of suggesting that "those who have a little are privileged compared to those who have nothing at all".
The status, which was introduced when private companies had difficulty recruiting at the beginning of the 20th century, guarantees a job for life - except for in cases of professional misconduct - annual pay rises and early retirement.
Spinetta claims that it reduces competitivity by 30 percent.
But unions claim that the average wage at the SNCF is only about 100 euros a month higher than the national average and that the average SNCF employee retires just six months earlier than the average French worker because they need to accumulate credits to have a full pension.
Train drivers are the biggest winners from the status.
After several years' service, they can earn as much as 3,591 euros a month - more than a manager.
But the company is actually short of drivers because of the high standards it requires and the demanding nature of the job.
Of 60,000 applicants in 2016, only 700 actually ended up driving trains.
Training lasts 12-18 months and is reportedly quite arduous, a candidate's eyesight and hearing must be perfect and regular consumption of alcohol or recreational drugs is strictly forbidden.
Once accepted, successful candidates must be ready to work nights, weekend and public holidays and to move around the country to make up for staff shortages.
Nevertheless, a lack of drivers leads to regular cancellations in several parts of the country and unions warn that the problem will worsen over time.
An opinion poll published on Tuesday showed 69 percent of French people in favour of scrapping the special status and 59 percent in favour of reforming the company.
But 43 percent said they would support the planned strikes and demonstrations.