Bombardier cuts 1,400 jobs after German rival wins Thameslink contract

UK’s last train maker says jobs must go at its Derby site after failing to secure the £3bn government deal Bombardier is to cut more than 1,400 jobs at the UK’s last remaining train manufacturing plant, in Derby, after losing a £3bn government contract to a German rival. The Canadian engineering giant said the completion of recent orders and failure to secure a deal for the Thameslink route made a near-50% cut in its workforce “inevitable.” Bombardier announced plans this morning to shed 983 temporary staff and 446 permanent workers at its Derby factory, a total of 1,429 jobs. A 90-day consultation will be launched. Bombardier said it had to lose nearly half of its 3,000 staff because four out of five production lines will be idle from September once contracts for the London Underground Victoria line and the London Midland franchise are completed. Francis Paonessa, head of Bombardier’s UK passenger division, said winning the Thameslink contract would have “secured workload at this site”. He added: “We regret this outcome but without new orders we cannot maintain the current level of employment and activity at Derby.” In a blow to the government’s plans for Britain to manufacture its way out of recession, Bombardier placed its UK operations under review after the Department for Transport awarded a contract to make carriages on London’s Thameslink rail route to Siemens of Germany, bypassing Britain’s last remaining train factory. Siemens won the deal for 1,200 carriages on the trans-London route last month, sparking widespread criticism from politicians and trade unions. Bombardier held an 8am press briefing on Tuesday morning at its Derby headquarters. Senior shop stewards will be briefed on job losses in time for the end of the night shift at 6am. The jobs blow comes after Lloyds Banking Group said last week that it would cut 15,000 jobs and experts warned of up to 10,000 job losses on the high street as a succession of retailers including Carpetright, Thorntons, TJ Hughes and Habitat said they would close stores. In a recent letter to the transport secretary, Philip Hammond, Bombardier warned that 1,200 jobs could be at risk at Derby even if it won the Thameslink contract. However, it had hoped that winning a deal for more than 1,000 carriages on the rail route would allow the company to retain many of the jobs. If it lost the Thameslink deal, it said, more jobs could go by the end of the year, amid doubts over the 350-strong engineering unit. The head of Bombardier’s works committee, John Pearson, said the company hoped the announcement would force the government to review the decision, with protests from local politicians and the Labour party and even expressions of concern from two cabinet ministers. “The company is going to use it as a political lever to try to get the government to change its mind about Thameslink,” said Pearson, 63, a member of the Unite trade union, who has worked at the Derby plant for 26 years. “We are the last train maker in this country. How can we let those skills go? If we want trains in the future they will have to come from abroad.” However, the government cannot review the decision. In a letter to David Cameron, Labour has claimed that up to 20,000 jobs could be hit by the Thameslink decision and looming cuts at Bombardier. The train maker’s manufacturing lines will grind to a halt in 2014 when it finishes a contract for London Underground trains. Future orders for the as-yet unbuilt Crossrail and High Speed Two projects are years from being tendered. Unite has written to two cabinet ministers in an effort to have the Thameslink decision reversed. Diana Holland, assistant general secretary of the UK’s largest trade union, said the move could be the “last straw” for Bombardier in the UK. In a letter to Hammond and Vince Cable, the business secretary, she said: “It is Unite’s belief that insufficient, if any, consideration was given to the social and economic implications of your department’s decision,” she said. “Similarly, we are confident that the business case for Bombardier is a strong one and, coupled with the need to safeguard national manufacturing, ought to have seen it awarded the contract.” The RMT trade union, which also represents workers at Derby, said the effect of the Siemens decision would be “devastating.” Bob Crow, RMT general secretary, said: “This act of political sabotage to a key element of the remaining UK manufacturing base could leave the nation that gave the world the railways building nothing but a few basic components.” The government believes its hands were tied over the Thameslink decision by European Union procurement rules, which state that any EU state must not allow a company’s location or nationality to influence contract awards. Nonetheless, Unite has pointed out that Germany’s state-owned rail operator, Deutsche Bahn, recently handed a €6bn (£5.4bn) high-speed train contract to Siemens. Cable and Hammond made pointed references to the perceived bias of contracts awarded elsewhere in Europe in a recent letter to the prime minister. Siemens, which employs 16,000 people in the UK, claims the contract will create up to 2,000 jobs in the UK supply chain. However, even though some components will be made in the UK the trains will be built in Germany. Manufacturing sector Job losses Transport Rail transport Travel & leisure Dan Milmo guardian.co.uk

Posted by on July 5, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.