2 days ago
Delays on train orders putting factory jobs at risk, MPs told
Thousands of rail manufacturing jobs will be put at risk if the Government fails to sign off on a backlog of orders for new trains, bosses have warned.
Executives from manufacturers Alstom and Siemens told MPs that long gaps between contracts for new trains on Britain's rail network would jeopardise production and threaten jobs.
Only three tenders for new trains are in the offing, with both companies warning that they face a cliff edge in the rate they can build trains if they fail to win at least one of them.
Both businesses employ thousands of workers across the country, with Alstom's Derby factory dating back 140 years and Siemens having opened its first British plant in Goole, East Yorkshire, in October.
Sambit Banerjee, Siemens Mobility's UK chief executive, urged the Government to establish a five-year, fully-funded pipeline of orders to safeguard jobs.
'We see an immediate necessity to push ahead with procurement. A lot of stock is very, very old and to upgrade it is much more expensive than bringing new trains in,' he told the Commons transport select committee.
'What the industry wants is certainty of the pipeline and certainty of the projects coming on time. We want to win competitively, but we are not getting that opportunity.'
Since taking power last year, the Labour Government has pledged to establish an industrial strategy for rolling-stock and end what it called the boom-and-bust cycle of train orders by ensuring a strong pipeline of work.
However, Mr Banerjee warned that Britain risks missing out on future spending if there are no orders to chase following investment such as the £340m that Siemens devoted to the Goole plant.
He said: 'When I go to Munich I'm fighting with emerging economies and with the US, who are also asking for research and development money.
'If our shareholders give us £340m there has to then be projects coming to fruition.'
Mr Banerjee added that while refurbishment work can help bridge the gap between new orders, this often represents poor value for money, pointing to upgrades to the 52-year-old Bakerloo Line trains for Transport for London (TfL).
Siemens will also complete a contract for 94 Piccadilly Line trains in two years, Mr Banerjee said, after which the Goole site, which employs 700 people, faces 'a stiff drop' in production unless it wins work on trains for the Southeastern, TransPennine or Northern networks.
A four-year funding settlement for TfL announced on Wednesday by Rachel Reeves in the Chancellor's spending review should also fund a shorter term order for new Bakerloo Line trains.
Bidding for tenders has not been helped by changes to specifications and the number of trains needed, making it 'extraordinarily difficult for us as manufacturers to plan,' he said.
Alstom, whose Derby Litchurch Lane site is Britain's biggest train factory with 1,500 workers, is also concerned.
Peter Broadley, the company's commercial director, told the committee: 'There has been barely any rolling-stock procurement since the pandemic. If we were to win none of the three coming up it would be a tough environment.'
Alstom was last year awarded a top-up order for 90 Elizabeth Line carriages that saved the Derby site from potential closure ahead of fitting out work on trains for High Speed 2.
The companies face competition for contracts from Hitachi, which employs 700 people in Newton Aycliffe, Co Durham, and CAF of Spain, which operates a smaller plant in Newport, Wales.
Hitachi was itself handed a lifeline in December with a £500m, 14-train deal from FirstGroup's Lumo brand, which will compete with the nationalised Great British Railways.
Labour said last year that the rolling-stock sector would not be taken under state control, given costs estimated to be £10bn.
The Department for Transport was contacted for comment.
