FME can read and write any arbitrary text file, one line at a time.
Although you can use this reader and writer in a generic translation, this usually will not produce a useful result by itself. Instead, this format is typically used as part of a customized format or custom workspace.
In such a case, the lines read are parsed using FME transformers into data elements which are further transformed or combined before output is produced. The reader can directly read from gzip file with .txt.gz extension and the writer can write a compressed gzip file if the extension of the output file is .gz.