Posted 2nd July 2011 | 7 Comments
PM urged to intervene over 20,000 Derby jobs at risk
This model of Siemens' new Desiro City units was displayed at Railtex in mid-June
BUSINESS and council leaders in Derby are warning that the award of the Thameslink rolling stock contract to Siemens has placed 20,000 jobs at risk, and are urging the Prime Minister to intervene.
A delegation from the city has been holding urgent talks at the Bombardier global HQ in Berlin over the past couple of days, because they were alarmed at reports that the company was now reviewing its UK activities after losing the £1.5 billion contract, with a decision due within the next two months.
One member of the Derbyshire group in Berlin was John Forkin, the managing director of Marketing Derby, an agency which is funded partly by the city council and partly by local businesses.
He told Railnews: “It was a useful visit, and we now have a relationship at a very senior level in Bombardier. The point is that this procurement decision was weak. The process was very narrow, with no consideration given to the effect on the local economy.”
Adam Wilkinson, the chief executive of Derby City Council, said the decision to choose Siemens was surprising. “Bombardier were disappointed and shocked that they lost the contract to Siemens,” he said. “Their bid included technological advantages and was highly competitive.
“We are now seeking an urgent meeting with the Prime Minister, which we understand will take place in early July. We want him to intervene. If Bombardier did leave Derby 6,800 jobs would be lost, and another 13,000 or so could follow in the wider supply chain.”
Chris Williamson, the MP for Derby North, has launched a petition to the House of Commons, which urges the transport secretary to reverse the decision in favour of Bombardier.
Bombardier has been saying only that it was 'disappointed', and has sought a debriefing from the Department for Transport on how it came to lose at the final hurdle. Two days before the Thameslink announcement on 16 June, Bombardier had learnt that it had won a £354 million contract to renew the signalling on the subsurface lines of London Underground, although some of the work for this will be done overseas.
Others are also worried. One Railnews reader wrote: “I have lived in Derby all my life. We are in shock today, and cannot believe they have given the contract to Siemens. Derby has a railway heritage going back over 100 years. Everyone knows someone who works there.”
As Siemens is only preferred bidder so far, with the contract not expected to be signed before November at the earliest, no details of the winning bid have been released. However, industry sources are suggesting that the German firm won the day, at least in part, by offering a more attractive financing deal, which could in turn have the effect of reducing the long-term leasing costs.
Siemens managing director for rolling stock in the UK, Steve Scrimshaw, said he was delighted. He added: "Our selection is a significant achievement, not only for the rolling stock teams both in the UK and Germany but for Siemens overall."
In a statement, the company added that the selection had been made on strict evaluation criteria, with focus on deliverability, affordability and value for money. Although some of the components are set to be made in Britain, the trains themselves will be built in Germany.
The fleet will be the first production run of Siemens' new Desiro City units (model, pictured), which have been developed for the British market.
Siemens is in partnership with Cross London Trains, a consortium of Siemens Project Ventures, Innisfree and 3i Infrastructure. The name is not without significance: the next major rolling stock contract in Britain will be for the Crossrail fleet, and some industry observers have already suggested that the winner of the Thameslink contract is likely to be favourite to build the Crossrail trains in due course as well.
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
david jones, rogiet, wales
there is an aspect to the siemens contract bid that should be taken into consideration, in 2007 the company was fined for paying government officials in the country they were contracting for, a company who would do this must be called into question as to whether they are suitable to even consider giving a contract in opposition to a british firm, any jobs gained are dwarfed by the jobs that are likely to be lost with bombadier, the history of siemens is their for all to read, aiding the rise of the nazi party in germany, and its right wing leanings, write to your mp, demand a recall of the contract taking into consideration the damage done to british companies, and the suitability of siemens,
H Harvey, Birmingham
Major problem with Derby access to Europe not possible because Guage problems.
Possible solutions
1 enhance MML to Euro guage with electrification
2 Speed up HS2 delivery with connexion to BM Derby line Euro guage Water Orton Derby + electrification.
HS2 even more important
Patsy Sambrook, Woodbridge, United Kingdom
This contract award makes no sense to an ordinary housewife like me. How ever much will it cost to pay unemployment benefits to this number of people and the cost of retraining these highly skilled engineers will be enormous. Leaving aside all the personal, family and social disruption to these employees, how sad that another British engineering company goes to the wall. Total madness!!!
Paul, London, UK
Its a sad state if affairs, if you recall the same thing happend to Alstom B,ham a few years back, IEP was given to Hitachi as the financial crisis was kicking off as was CTRL a few years before that.
Having worked in the rail industry across Europe for many years, I have never seen any suppliers outside of the host country make any significant inroads.
This decesion simply beggers belief and the shear stupidity of the Mr Hammond and co, how can this be good for the UK rail industry.
This a sad, sad day, we all know such industries wil never revive themselves in the UK
But look on the bright side HS2 will save the day.
Melvyn Windebank, Canvey Island, Essex, England
The fact is the Tories are so busy being Anti Europe that they cant work the system out or be seen to get involved in European matters like why France and Germany manage to win their own contracts.
Although the French seem to employ a system of planning ahead which means specifying trains that only they can then build. We saw an example in the recent Eurostar order where they contested that the German trains were not the right length!!
David Spencer, Bolton, Lancashire, UK
All British Governments what ever colour seem to know the cost of everything and the value of nothing. As a British engineer born and bred I am proud of Derby, its heritage and the products its makes in railway circles. Whilst Siemens has the Desiro City train we should always protect our own people. I am disgusted.
Claydon William, Norwich, Norfolk
The decision not to build these trains in the UK is beyond dumb, but I'm afraid we a re now paying the price for not being as 'protectionist' as the French, Germans et al in retaining national ownership of key businesses in the UK, and limiting overseas ownership by law.
French trains are built in France, German trains in Germany etc, etc; but there has never; to my knowledge; been any investigation into the competetiveness and legality of such contract bids and awards in France and Germany.
What is the sense in spending millions training young engineers and technicians in the East Midlands and elsewhere for them to have no employment propsects in engineering when they qualify.
It is however completely believeable that our government would overlook any analysis of full social impacts into job losses, just like they did in the 1980's.