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Government scrutinises Bombardier job cuts

The government has established a task force to examine the impact of 1,400 potential job losses at train manufacturer Bombardier, in the face of pressure from MPs to review the award of a crucial Thameslink contract to a foreign manufacturer.

Business secretary Vince Cable will set up an Economic Response Task Force in response to Bombardier’s proposal to cut 1,429 jobs at its Derby plant following the loss of a major Thameslink contract to German company Siemens.

Cable has announced that the Task Force will be headed up by HR expert Margaret Gildea to mitigate the economic impact of job losses at Bombardier, its supply chain and the local communities.

Cable said: “I am very disappointed with [the] news from Bombardier Transportation that it has started consultation likely to result in significant job losses at Derby as a result of not winning the Thameslink contract.

“My department will work closely with Bombardier … as they explore opportunities to sustain their manufacturing base in the UK in the long term. It is vital that we retain these skills.”

In the longer term, he said the Department for Business, Innovation and Skills will work with industry to support the UK rail supply chain to maximise business opportunities presented by the Intercity Express Programme, Thameslink and Crossrail.

Meanwhile, Bombardier has denied claims by transport secretary Philip Hammond that the workforce was under threat regardless of the loss of the Thameslink contract, which was awarded to Siemens.

Bombardier said it made it clear to the Department for Transport (DfT) that, if they were successful in winning Thameslink, then there would have been no compulsory redundancies.

The company also said it made it clear to the DfT that, if it were successful in winning Thameslink, it would have invested in their Derby facility to make it a worldwide centre of excellence in the manufacture of aluminium train bodies.

Labour’s shadow transport secretary Maria Eagle called on the government to take action to secure benefits for the UK from major rail contracts.

“The loss of the Thameslink contract has dealt a body blow to the UK rail manufacturing sector from which it is not clear it can recover,2 she said. “Today’s news will be devastating to the local work force and supply chain.

“It is unbelievable that the transport secretary has already washed his hands of the situation. He must look again at the value for money case, taking into account the wider economic consequences and the impact on the supply chain.

“In the meantime, he must do everything possible in negotiations with the Siemens’ consortium to ensure that Britain’s economy sees the benefits from this contract.

“The government must also set out how we can better ensure forthcoming orders, like Crossrail and the proposed new high speed trains, benefit British jobs and manufacturing.”

Together with shadow business secretary John Denham, Eagle wrote to the prime minister on Saturday urging him to review the Thameslink decision, which they said could critically damage Britain’s last train manufacturing company.

“The Thameslink contract needs to undergo a full independent review. A review must take into account the effect on the UK economy that the loss of this contract to a foreign consortium would create,” they wrote.

Cable said he and Hammond recently also wrote to the prime minister on the issue of public procurement, discussing how government should manage the process in the public sector to “sustain a competitive supply base that meets the UK’s strategic needs within EU procurement rules”.

“There is a need to examine the wider issue of whether the UK is making best use of the application of the EU procurement rules,” he said.

Hammond told Newsnight yesterday: “The Siemens proposal represented better value for money when measured in terms that were set out in the original procurement.

“If we had decided … to award the contract to an under-bidder, first of all we would face legal action from the successful bidder. Secondly, under the terms of the EU Remedies Directive, we would very likely be prevented, by legal intervention, from signing a contract anyway.”

Readers' comments (1)

  • Barry Walton

    We have heard much of the detrimental effect of this contract going to another supplier in the European community. It might be useful for the NCE to give us some data on the bids. Why are we lamenting Siemens winning instead of asking how the notionally UK supplier with its Canadian parent was not able to offer a competitive price/competitive terms in its own, adopted back yard?

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