UK: Bombardier train factory at risk

[John Ashworth]

Bombardier train factory at risk after £3bn Thameslink deal goes overseas

Unions attack 'disgraceful' move they say exposes Tory support for manufacturing as a sham

* Tom Bawden
* guardian.co.uk, Thursday 16 June 2011 20.40 BST

The future of Britain's last remaining train factory was thrown into doubt on Thursday after the government named an overseas consortium as the preferred bidder for a £3bn contract to make carriages for the upgraded Thameslink route.

The decision to sideline Bombardier Transportation's factory in Derby in favour of a group led by Siemens means one of Britain's largest train orders is likely to be made in Germany at a time when Britain desperately needs to boost its own manufacturing.

The move was greeted with anger by unions and Labour MPs, who said the appointment made a mockery of George Osborne's budget pledge in March that "we want the words made in Britain, created in Britain, designed in Britain, [and] invented in Britain to drive our nation forward".

Maria Eagle, Labour's shadow transport secretary, said: "The Tory-led government's claim to want to support the British manufacturing that is vital for jobs and growth is exposed today as nothing more than a sham."

Mark Young, regional co-ordinating officer of the Unite trade union, said the decision to hand the work to an overseas consortium was "absolutely disgraceful".

The contract is part of a £6bn upgrade of the Bedford to Brighton, cross-London Thameslink route that will extend the service from 50 to 150 stations and almost double peak-time capacity on its central London section. The 1,200 new commuter carriages will carry up to 1,750 passengers and, by 2018, up to 24 trains an hour will operate through central London.

Transport minister Theresa Villiers acknowledged that "there will be disappointment in Derby" but insisted that the Siemens bid represented "the best value for money for taxpayers" and would benefit Thameslink passengers with "modern, greener and more reliable trains".

She said that the Thameslink contract would create up to 2,000 jobs in Britain – about 600 to make train components, about 650 to build two new maintenance depots and about 750 to maintain the trains and operate the depots.

However, it is estimated about 1,500 staff will be needed to build the trains and they will be based in Germany.

Bombardier, which employs about 3,000 people in Derby, is understood to be reviewing its entire UK strategy in the wake of its failure to become preferred bidder, which sources said could potentially lead the Canadian company to significantly slim down its UK operation.

Four of the Derby factory's five UK train manufacturing contracts – two for National Express, one for London Midland and the other for the Victoria underground line – will be completed by September. The remaining deal – to supply trains to London Underground – will run until the end of 2014.

"Bombardier is going to have to reassess its entire future in the UK as a result of this, not just in Derby," said a source close to the company.

In addition to the Derby manufacturing plant, Bombardier makes signalling in Plymouth and overhauls and repairs trains in 15 centres including Crewe, Burton upon Trent and Ilford. In total, Bombardier Transportation employs about 5,500 rail staff in Britain, and its aerospace division has about 5,000 employees in Belfast.

The group also recently lost out on a £7.5bn contract to build 1,400 high-speed trains for the east coast and the Great Western main lines.

Eagle said the failure to win the Thameslink deal would put Bombardier at a disadvantage in the bidding to make trains for the new Crossrail service in London and the south-east, for which Bombardier and Siemens are shortlisted bidders.

"The Thameslink and Crossrail projects are very similar and economies of scale will put Bombardier at a competitive disadvantage. The loss of this project has wider ramifications," Eagle said.

A spokesman for Bombardier said: "Bombardier is extremely disappointed not to have been selected as the preferred bidder for Thameslink. We will need to be debriefed by the Department for Transport to understand why we were unsuccessful."