End of the line for Britain’s last train maker as 1,400 jobs face axe

MORE than 1,400 jobs are to be lost at Britain’s last train making company, Bombardier.

The axing of posts follows the Government’s decision to award a lucrative carriage order for the Thameslink route to Siemens of Germany rather than to Derby-based Bombardier.

The company said the job cuts would affect 446 permanent staff at Derby and 983 temporary staff.

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A consortium led by Bombardier had been competing with one led by Siemens of Germany for a contract for 1,200 new carriages as part of a £6 billion upgrade of the Thameslink route, which runs from Bedford to Brighton through London.

Last month the Government announced that Siemens would be the preferred bidder for the contract.

Announcing the winner, Rail Minister Theresa Villiers said the bid by Siemens, which will build the new carriages in Germany, represented the “best value for money for taxpayers” and stressed that the contract would create up to 2,000 new UK jobs.

But it was vital for Bombardier’s future that it won the Thameslink contract as most of its other contracts are due to finish in September this year.

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Bombardier does have a Tube train contract that will go on until 2014 but this will only support a few hundred jobs at Derby.

Bob Crow, general secretary of the RMT transport union, said: “It’s a scandal that the Government are colluding with the EU in a policy of industrial vandalism that would wipe out train building in the nation that gave the railways to the world.

“We will fight this stitch up tooth and nail from the shopfloor to the benches of the House of Commons.

“German rail giant Deutsche Bahn awarded a £5 billion fleet contract to German company Siemens and no-one batted an eyelid but when it comes to British skilled manufacturing jobs getting support from this Government all we get is a pack of excuses and they stand exposed as totally impotent in light of the Bombardier/Thameslink scandal.”

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Len McCluskey, general secretary of the Unite union, said: “The situation at Bombardier has reached crisis point. The Government must now act swiftly and decisively to save Britain’s last train manufacturer.

“The dire consequences of the Government’s misguided decision to exclude Bombardier from the contract to build carriages for the Thameslink project is now becoming a reality.

“Unite will be working tirelessly to maximise voluntary redundancies and natural wastage and we expect the company to fully cooperate with us but, the solution lies with the Government.

“It’s a tragedy because these redundancies would have been needless if the Government really cared about British manufacturing and British skills.”

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He added: “Just three months ago, the Chancellor, George Osborne proclaimed that the Tory-led government wanted the words ‘made in Britain and created in Britain’ to drive our country forward.

“Today, these hollow words will stick in the teeth of the loyal and hardworking men and women at Bombardier.”

Workers at Derby are now completing orders for London Underground carriages and for diesel trains for the London Midland main line train company.

Most of this work will be completed by the end of September this year.

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Francis Paonessa, president of Bombardier’s passengers division for the UK, said: “The culmination and successful delivery of these projects and the loss of the Thameslink contract, which would have secured workload at this site, means that it is inevitable that we must adjust capacity in line with economic reality.”

He went on: “We regret this outcome but without new orders we cannot maintain the current level of employment and activity at Derby.

“Over the next 90 days together with employee representatives we will work with individual employees to ensure the best possible outcome for our people,”

Colin Walton, chairman of Bombardier Transportation in the UK, said: “The loss of the Thameslink contract, has forced us to conduct a UK-wide review of our operations. This announcement today is part of an on-going process.”

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Transport Secretary Philip Hammond said the job losses were “by no means” all attributable to the decision not to award Bombardier with the Thameslink order.

“Bombardier are extremely disappointed not to win the Thameslink contract and we are extremely disappointed that they didn’t win it,” he told BBC Breakfast.

“But let’s if I may, just put this in context - Bombardier has had a fantastic run of success, they have been building train orders for all sorts of companies over the last few years, they have geared up their labour force.

“They always knew that when those contracts came to an end, they would have to make some job losses.

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“Indeed, the company wrote to me back in May and said that whatever the outcome of the Thameslink contract, regardless of whether they won or not, they would have to make 1,200 redundancies simply because of all the other contracts coming to an end.

“Of course, the Thameslink decision is bad news for Bombardier but the job losses being announced today are by no means all attributable to that decision.”

He said the Thameslink contract procurement process had been started by the previous Government.

“It has fallen to us to announce the result of that competition but actually we had no ability to influence the outcome of that decision,” he said.

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“The simple fact of the matter is under the criteria that the previous Government set out in the contract, Siemens were the winner of that competition and under European procurement law we had no choice but to announce them as the preferred bidder.”

Shadow business secretary John Denham insisted it was “not too late” for the Government to review the Thameslink contract, calling the decision a “body blow” for British manufacturing.

But Transport Secretary Philip Hammond told BBC Radio 4’s Today programme that was “not an option”.

He claimed the Government had been left with little choice because of the terms of the procurement process devised by the previous Labour administration.

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That was something he wanted to change for future major projects to ensure Britain was competing on a “level playing field”, he added.

The Transport Secretary insisted the job losses were not all as a result of the Thameslink decision.

Mr Hammond said: “The only options available to us were to go ahead and award the contract to the bidder who made the highest value-for-money bid on the basis of the criteria Labour set out when they launched this procurement in 2008, or to cancel the project altogether.

“We can’t cancel the Thameslink project, we have already invested billions of pounds in the platforms, the track improvements and the other major infrastructure changes.

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“It is the correct decision within the terms that were set out when the procurement was launched. I think the question is whether the procurement was correctly framed.

“The way some of our continental partners approach these things is to look more strategically at the support of the domestic supply chain and it is clear because the French routinely award contracts for trains to French builders and the Germans award contracts for trains to German builders.

“It is clear that it is possible to structure the contracts such that, even within the constraints of the European procurement directive, there are much greater chances of the domestic supply chain succeeding.

“I think we have got to look at how we manage these things for the UK in the future.

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“Vince Cable and I have written to the Prime Minister suggesting that we use the next stage of the growth review to do just that.

“I’m the first person to say that free trade and open markets are good for Britain but I also think that level playing fields are good for Britain and we do need to ask ourselves the question whether we are playing by the same rules as everybody else.”

He added: “Bombardier wrote to me in May of this year and they said - and I’m quoting from the letter - even if the Thameslink contract is awarded to us in the immediate future, the successful delivery of existing projects means it is already inevitable that Bombardier will experience a dip in workload, the scale of which will mean the lay-off of around 1,200 employees.”

Gerry Doherty, leader of the TSSA rail union, said: “Ministers must abandon their role as Pontius Pilate and stop standing idly by while train-making slowly bleeds to death in the UK.

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“They owe it to British manufacturing in general, and the people of Derby in particular, to reverse their decision to award this huge contract to Siemens of Germany.

“No German or French government would be so foolish as to award such a vital contract to an overseas manufacturer, threatening thousands of domestic jobs. We should be equally hard-headed when it comes to preserving our own train-building industry.”

Later, Mr Hammond said: “Any job losses are highly regrettable. However, Bombardier had previously advised my department that they expected to make over 1,000 redundancies at this time - regardless of the outcome of the Thameslink procurement - as several of their existing orders reach completion.

“The Thameslink procurement was set up and designed by the previous government and we are legally bound by the criteria set out at the beginning of that process. Going forward, however, we recognise that there is a need to examine the wider issue of whether the UK is making best use of the application of EU procurement rules.

“The Business Secretary (Vince Cable) and I have written to the Prime Minister on this issue and we plan to look into this issue as part of the Government’s growth review.”