Posted 13th February 2009 | 17 Comments

Backlash against £7.5bn Hitachi contract

The Hitachi promotional video which was withdrawn from the DfT website.

A BACKLASH is growing against the Government’s announcement yesterday that Britain’s biggest-ever order for inter-city trains — £7.5 billion — has been awarded to the Japanese train builder, Hitachi.

The Department for Transport was accused of spin after its statement that the contract had been awarded to “a British-led consortium.” The DfT also attributed quotes to Transport Secretary Geoff Hoon “that over 12,500 jobs will be created and safeguarded.”

The DfT was so anxious to maintain the ‘good news for Britain’ spin that within minutes of placing the announcement on its web site, an associated video (which can be viewed on the Railnews web site), which started with 60 seconds of promotion material about Hitachi, was withdrawn.

The consortium gaining the contract is known as Agility Trains and, as well as Hitcahi, includes John Laing and Barclays Bank.

But soon after the contract award was announced it emerged that much of the new trains’ construction will take place in Japan, with only final assembly taking place in Britain, creating about 500 new jobs. Sites in Ashby-de-la-Zouch, (Leicestershire), Sheffield and Gateshead are being considered, said Agility Trains.

Hitachi said all of the first ten trains, some 70 vehicles, will be made in Japan, and the outer shells and parts of the bogies of the remaining 1,330 vehicles will continue to be fabricated in Japan.

The RMT union criticised the choice of Agility over Express Rail Alliance, a group led by Bombardier Transportation, together with Siemens of Germany, Angel Trains and Babcock & Brown. Bombardier already has a significant train manufacturing base at Litchurch Lane, Derby.

Bob Crow, general secretary of the biggest rail union, RMT, said: "We have been campaigning long and hard to protect what is left of Britain's train-making capacity and skills base, and if the basic manufacture of these [train] sets is to be undertaken elsewhere today's announcement will have been a triumph of spin over substance.

“We need to know why the order was not placed with Bombardier, which has established train-building capacity and a skilled workforce in Derby."

In an apparent sop to Bombardier, the DfT announced yesterday that it was in discussions with National Express East Anglia for the Derby train maker to build 120 new carriages for use on the Stansted Express services between London Liverpool Street and the Essex airport.

Derby North Labour MP Bob Laxton said the decision was bad news for the area.

"This is a crass decision which gives the Japanese an opportunity of getting into the UK market. I don't believe for one moment the figure of 12,500 jobs because work will be brought into the UK from overseas," he said.

Keith Hazlewood of the GMB union said: "We need to clarify what on earth is going on and how much work will be done in this country."

The Tories’ shadow Transport Secretary Theresa Villiers said the announcement was "typical spin" from the government.

She said: “Only around 500, at most of the 12,500 jobs, announced today will be created in the UK by the train builder Hitachi and Labour have produced no convincing evidence to back up the rest of their claims on jobs.

"This announcement raises further questions about Gordon Brown's claims about British jobs for British workers. Geoff Hoon needs to stop the spin and tell the UK's hard pressed train manufacturing industry the real truth about his decision on replacing intercity trains."

Express Rail Alliance said it was "extremely disappointed" by the decision. "We have spent 18 months developing a compliant, competitively priced, innovative and sustainable solution, which would have significantly benefited the rail manufacturing economy in the UK and Europe."

The DfT said Express Rail Alliance “has been asked to maintain their status as reserve bidder in the case of DfT not being able to reach satisfactory terms with the preferred bidder.

“Both bids were deliverable and substantially compliant, and so comprehensively evaluating and choosing between them was a lengthy process.”

The new trains will operate on the East Coast and Great Western Main Lines, with options for deployment on London commuter services on the West Coast Main Line and on services between London and the West of England (Penzance and Exeter), said the DfT.

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • James Kirkman, salisbury, england

    I agree with all most of the comments above however what is annoying me is that after awarding the deal to Hitatchi, (who were collaborating with Brush Traction in Leics). Hitatchi are now looking to give this part of the deal (Bi-mode power system manufacture — 120 - 150 jobs) to Vossloh Espaņa, in Valencia, Spain.

    Can this make any political sense? Can the Goverment not force Agility to keep all the work that can be done by British in Britain?

  • Madness, Scotland

    Another DUMB move by our Government, how on earth can they justify spending that kind of money elsewhere at a time like this when Britain is crumbling.

    Its about time they started to represent & respect the working man in UK, their families and the future of their children.

    They have NO COMMON SENSE & NO RESPECT yet they continue to sell off Britain while they feather their own nests and bail out the (b)ankers, far too many dodgy handshakes and shady deals going on for my liking.

    Once again...I'm Sickened !! This should be stopped.

  • R E Fielding, Tamworth, Staffordshire

    Am I correct in saying the Voyager trains built for Virgin cross country were built in Belgium and what a terrible design they are with diesel engines under every coach, we dont want any more like those !!

  • T. J. Price,, Nottingham,, United Kingdom.

    Who's to say that, had Bombardier won the contract, the trains would have been built in the UK anyway? Bombardier are a Canadian firm with manufacturing facilities all over the world, and there seems to be a general assumption that the Derby plant, which already has a full order book for years to come and is also having problems with parts supply, would automatically get the job.
    At least some new jobs are going to be created here, and for years to come when you consider the maintenence facilities that will also be operating to support the new trains.
    On a shallower side, i also think that Hitachi's offering looks much nicer!

  • A Wilkins, Oxford, UK

    I bet you would never see Japanese built trains being bought for use in France. The French Govt. would soon fix the terms so that the Japs could not compete.

  • Anthony Searcy, Derby, England

    Yet another kick in the teeth to the British manufacturing industry. What is it with this government and their policies? British trains should have and most definately could have been made by British workers! As a unite member and one of Bombardiers workforce I fully support the British trains campaign. But as with other industries they are NOT listening. Pure and simply another nail in the coffin lid of British manufacturing. A massive thank you to Mr Hoon and his cronies at the Dft in their ivory towers and totally out of touch to plight of the ordinary British worker.

    Anthony Searcy, Derby, England

  • David Faircloth, Derby, UK

    OK, so Bombardier has lost out to Hitachi; but why?

    There must have been something seriously wrong with the Bombardier/Siemens bid if it can be beaten by one which includes shipping costs from Asia AND the construction of a new factory here in the UK; and the trains are not being built in a low cost country like China or Korea, but high cost Japan.

    What was wrong with the Bombardier bid? Are Bombardier's costs too high? Was the train technically non-compliant? Was the Hitachi consortium able to pu together a better finance package than Bombardier, and if so, how?

    Unless Bombardier is able to understand why it lost out and to learn lessons from it, I have fears for the future of its Derby factory.

  • Robbie R Craig, Romney Marsh, UK

    Agree with the comments about electification of the network - also, it would help justify new nuclear build - like diesel, another old fashioned technology they want to foist on us.

    Speaking as a passenger - I have not been overly impressed with UK train design since the HST in 1976. Could this brings us better trains?

    I think I read in Private Eye, that monopoly considerations vexed the minds of DfT or BERR about giving the contract to Bombardier - which I think is Canadian. Train manufacturing by British owned companies ended in the 1990's and the technological edge we had was surrendered in 1981.

    Many of the comments by other posters were similar to what we first told when japanese cars and manufacturing came to the UK. We were being urged to buy old fashioned unsafe cars built in the UK rather than a technologically superior product with innovations imported from abroad - I think that we need to be more open minded and less nationaIistic about what the deal may mean and less influenced by spin from those responsible for the mess the railways are in and those who profit from it.

    Maybe this is best for the future, I am not an expert, but would new manufacturing capacity here not mean that 3 non UK companies - Siemens, Alstom and Bombardier who build most of Europe's trains, have a new competitor within the EU?

  • brian cox, derby, United Kingdom

    R.I.P bombardier

  • andyganley, sutton,surrey, england

    Agree 100% with the comments from above +the rail idustry ones.
    As for the reason why the contarct went to Hitachi,one liitle word looms large:
    Barcleys isnt that the same Barclays that is billions of punds in debt and has taken lrge chunks of our money?

  • Paul B, Coventry, UK

    Re. the bio-mode, hope they can get it to work alright - wouldn't it be easier and far cheaper to shove a diesel locomotive on the front-end?!

    There doesn't seem to be any commitment regards numbers and lengths at this stage never mind electrification. Seems this government will find any old excuse not to commit to electrify.

  • David Myles, Chesterfield, Derbyshire

    I cannot understand how, when the pound is on the floor and the UK balance of paymemts is literally unbelievable, the Government can contemplate spending money of this order of magnitude overseas. Is it done out of spite? And why wasn't Hoon shouting for Derby's corner? What is the point of having a British Minister of Transport who (in the biggest recession the world has ever seen) wants to buy Japanese? It is literally unbelievable. Do we want civil unrest before that lot in Westminster sees common sense? Does nobody see where all this is going? Remember what it took to get the world out of the last Great Depression!! And here they are putting petrol on the fire. God help us.

  • leslie burge, leicester, england

    Yes what happened to electrification?
    Surely this exposes the mirage that this government led by g.b.
    want electrification in these environmental times!!!

  • Chris Hamilton, Wishaw, North Lanarkshire, United Kingdom

    One of your commentators should be aware that this train will be a dual powered Diesel/Electric, with Hybrid technologies.

    The GWML is still first in line for an electrification scheme to at least Cardiff and Bristol, however the train does require a diesel propulsion system to take it beyond the wires and to allow it to travel to the likes of Swansea and Penzance.

    I would like to say however, that this decision is ultimately bad for UK manufacturing and is a major blow to Bombardier. Now all we need is for the government to give the contract for FGWs new DMUs to Siemens and it's bye-bye Derby.

  • Owain Vaughan, Newport, Monmouthshire, UK

    Furthermore, so recently after "reconsidering" electrification of the GWML and MML we now get the announcement of 125mph-capable Diesel trains. Wow! It's like 1976 all over again. I guess that pretty much kills off electrification for another 30 years :(

  • Simon C, Bradford

    The heart of British manufacturing is being systematically ripped out. I hope Mr Brown is proud -

    Maybe so but he sure didn't start it and most was gone before Maggie left office..

  • Garry McDonald, Desborough / Northants, UK

    So what justification(s) have been given for the choice of supplier if both bids were 'deliverable and substantially compliant'? I just cannot believe this government.
    On one hand they are bribing companies to take on apprentices but with the other they continue to jeopardise UK jobs - what are the apprentices going to do if and when they qualify? Learn Japanese if they have any sense.
    The heart of British manufacturing is being systematically ripped out. I hope Mr Brown is proud.