Union backlash over £7.5bn 'super express' train contract

[Albus]

http://www.guardian.co.uk/business/2009/feb/12/super-express-train-jobs-row

The government sparked a trade union backlash today after awarding a £7.5bn train contract to a Japanese-led consortium and admitting that some of the 12,500 jobs created or safeguarded by the deal will be based outside Britain.

The news came in the wake of a wave of wildcat strikes over the use of foreign labour at oil refineries and power plants. Britain's largest rail trade union, the RMT, added to those protests today after questioning the decision to award the trains contract to a consortium that will construct at least some parts of the first batch of 1,400 carriages in Japan rather than the UK.

Agility Trains – led by Japanese train maker Hitachi, services group John Laing and Barclays's investment bank – will build and maintain a fleet of new "super express" trains that will start running between London and Edinburgh in 2013 before being rolled out across the UK. The Department for Transport said the contract will safeguard 10,000 existing jobs and create a further 2,500, but then admitted that not all the jobs, and not all the value generated by the contract, would be based in Britain.

The RMT union criticised ministers for choosing Agility over the Express Rail Alliance consortium, a group led by Bombardier, the Canadian engineering group that already has a significant train manufacturing base in Derby.

"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 sets is to be undertaken elsewhere, today's announcement will have been a triumph of spin over substance," said Bob Crow, the general secretary of the RMT. "We need to know why the order was not placed with Bombardier, which has established train-building capacity and a skilled workforce in Derby."

Transport minister Lord Adonis admitted that some of the manufacturing jobs created by the £7.5bn contract could be located outside the UK, although he expected the majority to be situated in Britain. "The great majority of the jobs and the value of the contract will reside here in Britain," he said, adding that around 70% of the value of the contract would be generated in the UK.

The chief executive of Agility Trains, Alistair Dormer, said the first 70 carriages would be constructed in Japan, with the bulk of the manufacturing and assembly then transferring to the UK. However, some production on the remaining 1,330 carriages will stay in Japan, including the manufacturing of the carriage shells, which requires a welding technique known as "friction stir welding", with parts of the undercarriages and power plants also constructed outside the UK.

Dormer said an initial 200 manufacturing jobs would be created in the UK, rising to 500 by 2015 at a plant to be based in either Gateshead in the north east, Ashby de la Zouch in the Midlands, or Sheffield in Yorkshire. The remaining UK jobs created by the contract are expected to be based in maintenance depots. Industry sources said maintaining the fleet would require around 1,300 jobs, which would leave around 700 more of the DfT's 2,500 total unaccounted for.

Express Rail Alliance said: "We are extremely disappointed not to have been awarded preferred-bidder status for the Intercity Express programme. 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."

Agility plans to create a new manufacturing plant in the UK and new depots in Bristol, Reading, Doncaster, Leeds and west London to build and service the new electric and diesel rolling stock. The new stock will replace the distinctive Intercity 125 diesel and Intercity 225 electric fleets that British Rail bought in the 1970s and 1980s. The trains are expected to remain in service until 2040 and the order is comprised of three different types of train: one type powered by electricity, one by diesel engines, and a further hybrid type that combines both.

Adonis said diesel and hybrid trains were still needed because "substantial" parts of the network will not be electrified when the first batch of trains is introduced on the east coast line, followed by the Great Western route in 2016.

The government also approved plans yesterday for the £750m regeneration of Longbridge, south of Birmingham, in a move that will create an estimated 10,000 new jobs.

The Longbridge Area Action Plan (LAAP), which was passed to government in March last year, includes the construction of at least 1,450 homes on the site of the car plant as more than 350 acres of land are transformed into a new "sustainable community". The plan has been created by a 15-year partnership between Birmingham City and Bromsgrove District councils alongside Advantage West Midlands, Worcestershire County Council and developer St Modwen.

"In my view, the proposals for the future economy of Longbridge are founded on robust and credible evidence and will be effective, flexible and deliverable," government inspector Jill Kingaby said in her report. "Overall, I conclude that the LAAP should enable the economic transformation of Longbridge… developing a range of employment opportunities across the site and establishing a regional investment site which is attractive to high-profile investors."

[vinylsolution]

1. As a kid....

I used to watch trains being built in York, then exported all over the world.

Then, along came Margaret Thatcher....