The slow death of British rail manufacturing

If you walk down the evocatively named Litchurch Lane to reach the Bombardier works in Derby, you can almost smell the long-gone steam. The high redbrick walls that once protected the railways from the hungry eyes of generations of trainspotters, along with the humpback bridges over the lines, evoke a world where the railway was king, Britain’s biggest industry and employer.

Now Litchurch Lane is almost certainly heading the way of the big railway works in Swindon, Doncaster, Crewe and countless other towns created by the railway; and its closure, after the current order for London Underground trains is fulfilled in 2014, seems inevitable. And utterly unnecessary.

The accusation by Philip Hammond, the transport secretary – justifying the failure to give the big Thameslink contract to Bombardier by suggesting it was the Labour government’s fault for the way it framed the contract – is narrow political posturing of the worst kind. While Labour bears some of the responsibility for the demise of the British railway manufacturing industry, with a bit of nous Hammond could certainly have saved the day by steering the contract Bombardier’s way.

The roots of the problem stretch back into the history of British industrial policy – or the lack of it – and the shoddy dismemberment of British Rail at privatisation in the mid-1990s. Ministers argue that they have their hands tied by EU rules and cannot favour home-based industry, even a Canadian-dominated multinational such as Bombardier, without risking a reference to the European court of justice.

Not so, according to Chris Bovis, professor of European business law at the University of Hull, who says there is a long tradition of British failure to understand the finer points of European legislation. “The British tend always to go for the lowest bid but actually they could take into account many other considerations,” he says. “The key criterion is to accept the tender that is most economically advantageous.” But he goes on to point out that this can include many considerations other than the lowest price: quality, security of supply, social cohesion, industrial policy and even – one unlikely to be a factor for penny-pinching Tory ministers – aesthetics.

The European court of justice has upheld decisions relating to all these factors and numerous others. For example, it is quite possible to argue that the inspection process is much easier with a home-based company than a foreign one. Yet successive UK governments persist in considering only the narrow cost element, without taking account of wider considerations such as unemployment.

The French and Germans know how to play the game. They ensure that virtually all the orders for new trains go to home-based companies, with Alstom and Siemens respectively being the main beneficiaries. Certainly they indulge in a few sneaky tricks, such as providing regional grants that may pay for a new workshop or a bit of R&D – but overall European companies are simply better at reading the legislation and complying with it.

The European firms are helped, too, by the wider policies that favour public transport and therefore ensure there is a steady flow of orders for trams. Bombardier and its predecessors have been hampered by this lack of a home market and by the feast-and-famine approach of the Department for Transport, which has consistently failed to understand the needs of a capital-intensive industry.

Giving the order for the 1,200 Thameslink coaches to Bombardier would, at least, have safeguarded the future of the plant for the long term, although the job losses would have happened anyway. That’s because of the failure of wider transport policy. At privatisation there was a hiatus in train orders of nearly three years, which put paid to several manufacturing plants. Bombardier’s Derby plant has, ironically, enjoyed its best period for many years, thanks to the London Underground orders, and it even built trains for South Africa; but without a solid home market, a spokesman told me, there is no chance of any export orders. There has now been another train-order hiatus of 800-plus days, and there is no prospect of any major contracts, apart from trains for the new Crossrail line in London – not due until 2015 at the earliest.

It is difficult not to be pessimistic and see this as the end of an era stretching back nearly two centuries. However, the failure to give the contract to a home-based company is playing badly in the Tory party. It gives the lie to Cameron’s promise to support British manufacturing jobs. Train travel is booming and there is an obvious lack of rolling stock. With a bit of will, extra carriages could be ordered to lengthen existing trains and possibly give hope to Bombardier that it should hold on with the prospect of getting the large Crossrail order in the middle of the decade. It is not a lost cause, but it will take a fierce and vocal lobby to effect another Cameron U-turn. Steam will never return to Litchurch Lane, but perhaps, just perhaps, train manufacturing may remain there if enough pressure can be built up.

Bombardier: end of the line for railway works

By awarding the Thameslink contract to a German firm, the government has delivered a mortal blow to Britain’s train industry

  • If you walk down the evocatively named Litchurch Lane to reach the Bombardier works in Derby, you can almost smell the long-gone steam. The high redbrick walls that once protected the railways from the hungry eyes of generations of trainspotters, along with the humpback bridges over the lines, evoke a world where the railway was king, Britain’s biggest industry and employer.

    Now Litchurch Lane is almost certainly heading the way of the big railway works in Swindon, Doncaster, Crewe and countless other towns created by the railway; and its closure, after the current order for London Underground trains is fulfilled in 2014, seems inevitable. And utterly unnecessary.

    The accusation by Philip Hammond, the transport secretary – justifying the failure to give the big Thameslink contract to Bombardier by suggesting it was the Labour government’s fault for the way it framed the contract – is narrow political posturing of the worst kind. While Labour bears some of the responsibility for the demise of the British railway manufacturing industry, with a bit of nous Hammond could certainly have saved the day by steering the contract Bombardier’s way.

    The roots of the problem stretch back into the history of British industrial policy – or the lack of it – and the shoddy dismemberment of British Rail at privatisation in the mid-1990s. Ministers argue that they have their hands tied by EU rules and cannot favour home-based industry, even a Canadian-dominated multinational such as Bombardier, without risking a reference to the European court of justice.

    Not so, according to Chris Bovis, professor of European business law at the University of Hull, who says there is a long tradition of British failure to understand the finer points of European legislation. “The British tend always to go for the lowest bid but actually they could take into account many other considerations,” he says. “The key criterion is to accept the tender that is most economically advantageous.” But he goes on to point out that this can include many considerations other than the lowest price: quality, security of supply, social cohesion, industrial policy and even – one unlikely to be a factor for penny-pinching Tory ministers – aesthetics.

    The European court of justice has upheld decisions relating to all these factors and numerous others. For example, it is quite possible to argue that the inspection process is much easier with a home-based company than a foreign one. Yet successive UK governments persist in considering only the narrow cost element, without taking account of wider considerations such as unemployment.

    The French and Germans know how to play the game. They ensure that virtually all the orders for new trains go to home-based companies, with Alstom and Siemens respectively being the main beneficiaries. Certainly they indulge in a few sneaky tricks, such as providing regional grants that may pay for a new workshop or a bit of R&D – but overall European companies are simply better at reading the legislation and complying with it.

    The European firms are helped, too, by the wider policies that favour public transport and therefore ensure there is a steady flow of orders for trams. Bombardier and its predecessors have been hampered by this lack of a home market and by the feast-and-famine approach of the Department for Transport, which has consistently failed to understand the needs of a capital-intensive industry.

    Giving the order for the 1,200 Thameslink coaches to Bombardier would, at least, have safeguarded the future of the plant for the long term, although the job losses would have happened anyway. That’s because of the failure of wider transport policy. At privatisation there was a hiatus in train orders of nearly three years, which put paid to several manufacturing plants. Bombardier’s Derby plant has, ironically, enjoyed its best period for many years, thanks to the London Underground orders, and it even built trains for South Africa; but without a solid home market, a spokesman told me, there is no chance of any export orders. There has now been another train-order hiatus of 800-plus days, and there is no prospect of any major contracts, apart from trains for the new Crossrail line in London – not due until 2015 at the earliest.

    It is difficult not to be pessimistic and see this as the end of an era stretching back nearly two centuries. However, the failure to give the contract to a home-based company is playing badly in the Tory party. It gives the lie to Cameron’s promise to support British manufacturing jobs. Train travel is booming and there is an obvious lack of rolling stock. With a bit of will, extra carriages could be ordered to lengthen existing trains and possibly give hope to Bombardier that it should hold on with the prospect of getting the large Crossrail order in the middle of the decade. It is not a lost cause, but it will take a fierce and vocal lobby to effect another Cameron U-turn. Steam will never return to Litchurch Lane, but perhaps, just perhaps, train manufacturing may remain there if enough pressure can be built up.

  • struans

    ” Train travel is booming and there is an obvious lack of rolling stock. ”

    There’s also an obvious lack of money in the nations coffers.

    We’ve got plenty of new trains on order anyway – with Thameslink, Crossrail, IEP – to meet growth, factoring in cascading too.

    When we’re short of cash, why not keep old trains in service a bit longer.

    If Litchurch Lane closes, then it’s not the end of the world. 

  • Dave H

    The Class 172/Class 378/379 bodyshells on the currently running down line as the orders near completion are near identical to the Class 170 units that desperately need additional vehicles – with major effects seen in Derby when a 2-coach Cross Country unit runs vice a 3-coach one.  Southern also has 2-coach units, which should be grown to 4 on Uckfield and Ashford routes, and LM might also benefit from their recently delivered 172’s having an extension option.  South of London the 3-coach Electrostars might equally be standardised with the rest of the fleet as 4-coach trains, and the ‘lost’ space on the former Hull Trains Class 170’s could be ‘standardised’ to make all Scotrail units of similar seated capacity.

    Less easy to ramp-up but equally needed is a standardisation of the Voyager (and Meridian) fleets, as Virgin has already done by taking their 3 x 4-coach Class 221 trains and making the entire fleet 5-coach, with a 2-coach unit (appositely 221 144) which is used for driver training but might equally be added to a standard train for a peak load (or football fans), or used to shuttle on special services – for example when Uttoxeter race days see well over 100 passengers trying to board the 70-seat Class 153’s allocated to the EMT service.  A Uttoxeter-Stoke shuttle would be a useful race-day relief option, and a late Crewe-Warrington service would deliver a really valuable connection for the 19.30 EUS-GLC, as Midlands connections to Scotland are considerably poorer since through trains excluded the stop at Crewe.  Ideas for for what to do with a Voyagette might be an interesting challenge for resource management. 

  • Boldfield

    Alstom, Siemens and even more so Hitatichi have a very big advantage of secure on going orders which Derby simply cannot compete not only with retention of skilled labour and high tech equipment but more to the point R&D. We are always playing catch up reinventing the technical knowlage BR buit up. It will always be more cost effective to have a steady, planned procurement instead of famine and fat. Even McNulty reconised this.

  • Richard Morris
  • Paul Holt
  • GordonJPearson

    Subject: Siemens is as
    British as Bombadier – Why make things?

     

    Philip Inman’s Viewpoint piece in
    this morning’s Guardian wasn’t completely coherent. Of
    course, Bombardier and Siemens are both non-British and, of course, both firms
    would employ British people on the Thameslink contract. But the difference
    isn’t just one of degree. It’s highly regrettable that the Derby works has
    fallen into foreign ownership – it happened as a result of governmental
    ideological myopia in the late 1980s – but Derby still represents a last, and
    significant, core of UK based skills  and expertise focused on an industry
    which continues to develop and has a positive future.  The loss of that
    contract, imposes a technological discontinuity which will be difficult if not
    impossible to bridge. It weakens the prospect of Derby gaining a Crossrail
    contract, without which the closure of UK’s last railway works seems
    inevitable, as Christian Wolmar pointed out also in today’s Guardian.

     

    Inman’s query  ‘Why make
    things?’ goes some way to explaining the lack of coherence regarding the Bombardier
    issue. His final paragraph starting ‘As the world becomes richer …’ makes one
    wonder where he’s been these last few years.

     

    I summarised a different
    perspective in yesterday’s posting on my blog which read as follows:

     

    The Bombardier Fiasco

    Posted 5.7.11 http://www.gordonpearson.co.uk

    The announcement of around
    1400 job losses at the Bombardier rail works in Derby signals the beginning of
    the end-of-life stage for another great British manufacturing industry,
    resulting more or less entirely from the incompetence and stupidity of the
    ‘madmen in authority’. Their latest incarnation, Transport Secretary Philip Hammond, was interviewed this morning on BBC
    Radio 4’s Today programme to explain why it was ‘correct’ to award the £1.4
    billion Thameslink contract to the German company, Siemens, rather than to
    Bombardier, UK’s
    last rail producer. His explanation was based on his belief in ‘free trade and
    open markets’, although, to do him credit, he had noticed that ‘the Germans
    award contracts for trains to German builders’, and ‘the French routinely award
    contracts for trains to French train builders’. He described their approach as
    looking ‘more strategically at the support of the domestic supply chain’. 
    Well what does he think the British government’s role is supposed to be? Is it
    to be looking after strategic British interests, or to promote an outmoded
    ideology that has proved time and again to be disastrous, in particular, to
    British manufacturing? Well, he and Vince Cable have written a letter about it
    to the Prime Minister! Good for them!

    The Derby works started building locomotives and rolling stock around
    170 years ago, a world pioneer. Its history and achievements over a century and
    a half were unequalled. Under British Rail, Derby became the main UK centre of
    rail research – the largest railway research complex in the world – as well as
    manufacture. Then, in the late 1980s it was set up by the ‘madmen’ for
    privatisation. As British Rail Engineering Ltd it was sold off to a combination
    of the conglomerate ABB and asset stripper Trafalgar
    House – they certainly know how to pick ‘em! Ownership subsequently transferred
    wholly to ABB, and thence, via Daimler-Benz, to Canadian owned Bombardier.

    So rail manufacture seems
    set to follow the route blazed by so many British manufacturing industries:
    steel, cars, trucks, motor cycles, machine tools, textiles, potteries,
    aluminium … the list is endless. Not all have been destroyed by politicians.
    Some failed as a result of incompetent management, some were victim of
    politically motivated unions, but almost all could have been nurtured by
    competent and strategically, rather than ideologically, oriented governments.
    The British workforce deserves better, as demonstrated by the hugely successful
    automotive industry located in Britain.

    The Transport Secretary argued that there was nothing he could
    have done about the Thameslink decision. ‘Once you have set out at the
    beginning of the procurement process what criteria you will you use to judge
    the outcome (which of course was done by the previous New Labour government),
    you are then bound to use them. You do not have any discretion when you open
    the envelopes about how you award the contracts.’ That’s the ideologue speaking
    from his fervent belief in ‘free trade and open markets’. But it’s not true. He
    could have fought his corner within the EU rather than sheltering behind the
    European Procurement Directive to keep faith with the free trade and open
    market ideology. It might be outrageous to suggest that the government should
    be motivated by Britain’s strategic interest. And Siemen’s might have been
    expected to appeal against such a strategically weighted decision, had the
    Thameslink contract been given to Bombardier. But they would have understood.
    And so would the British workforce: that the British government was on their
    side.

     

     

    Gordon
    Pearson

    http://www.gordonpearson.co.uk

  • FS/2/11

    Once London Midland’s Class 172s are delivered, that’s the end, kaput.  It beggars belief that we are prepared to let our last train factory wither and die while there are still Class 142 and 143 Pacers in service. These won’t last forever, they must go by 2019 at the very latest and the Sprinters soon afterwards, but the Pacers were life-expired years ago if we’re being honest, so the ideal time to replace them is now.  After all, Derby is tooled up today manufacturing – wait for it – lightweight DMUs.  Does anyone at the DfT join the dots, or can’t they see further than the end of their nose?

  • Steve Ashford

    We can all think of ideas for smaller orders that Bombardier could undertake to tide them over the next few years whilst the Government firstly becomes more canny and strategic about procurement, and secondly works out how it can maintain a reasonably steady flow of rolling stock orders. Without the later, any UK-based operation is probably doomed.
    To add another idea to those of others, what about the scheme to add ‘pantograph cars’ to Voyager and Meridian sets? Wasn’t that actually a Bombardier idea? Its a win-win-win project (a bit more capacity, lower operating costs, lower emmissions, smoother quieter ride, at least under the wires, and possibly nearly or completely self-financing). As an engineer, I would say its a no-brainer, do it now. But it won’t happen. Some of the operators have little time left on their franchises, so a government guarantee would be needed. It would take a small army of civil servants, lawyers and accountants (most paid north of £1000 per day) at least a couple of years to come up with a scheme to do it. Think of the time that elapsed between Virgin saying ‘we would like an extra carriage or two in our Pendolinos’ and the carriages actually entering service – 4 years? 5 years?

  • Steve Ashford

    We can all think of ideas for smaller orders that Bombardier could undertake to tide them over the next few years whilst the Government firstly becomes more canny and strategic about procurement, and secondly works out how it can maintain a reasonably steady flow of rolling stock orders. Without the later, any UK-based operation is probably doomed.
    To add another idea to those of others, what about the scheme to add ‘pantograph cars’ to Voyager and Meridian sets? Wasn’t that actually a Bombardier idea? Its a win-win-win project (a bit more capacity, lower operating costs, lower emmissions, smoother quieter ride, at least under the wires, and possibly nearly or completely self-financing). As an engineer, I would say its a no-brainer, do it now. But it won’t happen. Some of the operators have little time left on their franchises, so a government guarantee would be needed. It would take a small army of civil servants, lawyers and accountants (most paid north of £1000 per day) at least a couple of years to come up with a scheme to do it. Think of the time that elapsed between Virgin saying ‘we would like an extra carriage or two in our Pendolinos’ and the carriages actually entering service – 4 years? 5 years?

  • Percy

    Putting aside the tragic uk job losses, the tragic end to uk train manufacturing, the economic impact on the East Midlands at an already depressed economic time and speaking purely as someone who travels as a passenger on trains I dont enjoy what Bombardier has offered up over the last 15 years, (in the uk at least), Voyagers are top of the hate list and Turbostars arent great, as a passenger I prefer the Siemans products anyday be it their Emus on  Heathrow Express, London Midland or SWT or the DMUs on Transpenine, I find the journey experience much better, I’m not sure about reliability and cost between Bombardier / Siemans products but as a passenger I prefer the latter.

  • Greg Tingey

    Cameron, like every PM since 1979 is a traitor (cutting defence)
    I’m beginning to wonder if he’s as big a disaster as A. Eden – everything HE touched turned to shit – but you didn’t find out until much too late!

  • MikeB

    Many people, particularly the general media, seem to think that Derby Litchurch Lane is a British train building factory. However, enthusiasts and others who take an interest in railway history etc. know that it is owned by Bombardier Transportation AG, which is the rail manufacturing arm of Bombardier Inc the Canadian conglomerate.
    Bombardier Transportation AG has train building and other rail related manufacturing plants throughout both Europe and the World and therefore, if Derby is to close at some point in the future, the decision will be taken at their global headquarters in Berlin. With no involvement of any British companies in railway engineering, we have to be realistic and accept that the sector is now totally dominated by the Germans and French.

  • Dnptyf

    Very few companies can be said to belong to a given country nowadays. Scatch a Mercedes-Benz or a Citroen and you’ll find components from another country maybe Far Eastern maybe even British. On the other hand many of the compnents are subcontractedlocally – such that the impact on employment is much more than from Bombardier layoffs alone.

    The problem is that Litchuch Lane is supplying a limited market and is hampered by difficulties in testing and delivering trains outside the British loading gauge.

    Bombardier can never see it as being more than on the fringes of their commercial enterprise.

    Here’s an idea. How about electrifying the MML and bringing it up to international standards, so that it is connected to that larger market. Then if Bombardier still wanted to leace Derby, it would be more easy to find some company hungry for orders to take the plant over (along with the Railway Technical Centre which seems to be in a state of genteel decay) and produce a standardised top quality international design – the Chinese perhaps?

  • Fandroid

    If the government had any real intent to bolster British rail manufacture it would have handed out grants for a new factory adjacent to the European gauge HS1. Barking, Dagenham, the Medway towns & Ashford are all in need of new jobs. Just about all of the continental factories can supply trains by rail to the UK, but no UK factories can do the reverse. Bombardier doesn’t build anything for other EU countries in Derby, so that plant is entirely dependent on the UK market, and extremely vulnerable to fluctuations in orders. A bigger customer base would give much greater choice of bids and allow for a smoother workload. With Derby trapped behind 100 miles of UK gauge lines, it’s future was always dependent on a lot of favours.

    Having said that, I too rate Siemens trains highly. They have won a lot of UK orders in recent years, and on merit as far as I can tell.

  • Carl Geller

    The elephant in the room is of course the fact that many of these manufacturing sites that have been shunned by government over the years have been in Labour-supporting, union dominated heartlands.

  • Rhydgaled

    Pantograph carriges for Voyagers (a Bombardier product I believe), along with a little more electrification and a few more Pendolinios from Alstom, could allow the Hitachi IEP order to be all electric units. There is also a need for new loco-hauled coaches similar to the BR mark 3 to replace the stock used on the sleepers along with the Intercity 125s on the Plymouth/Exeter/Penzance route and, eventually, the Intercity 225s. By creating a specification which is basicly an updated mark 3, Bombardier Derby, who I am told have the design/rights to the mark 3, would probablly come up with the design that best matches the specification. These could be ordered for slow, well spaced out, delivery over a decade or more, safeguarding the future of the plant. The debated ValleyLines electrification would also need new rolling stock. I think the Derby-built class 377 ‘Electrostar’ in 2-car and 3-car sets would be an ideal design for these routes. There is also the Pacer fleet, which is regarded as unlikely to meet disability accessiblity rules in 2020 and will need to be replaced before then, which an expanded order of the class 172 with unit-end corridor connections (currently being outshopped from Derby to London Midland) would help with.

    Therefore, despite what the transport secretary has said, there is plenty of stock the DfT could order to save the plant without ordering unnecessary rolling stock.

  • Anonymous

    This sounds like British Leyland all over again.
    Is it possible for Bombardier to design and build world class Trains/Carriages for export and cave out a niche for themselves in a similar way to Rolls Royce, F1 Car construction, Arm Products. If they can not then they will be overtaken by other Companies.

    British Train design & construction years ago was unsurpassed with Engines, carriages, rails, line construction etc ; exported to all corners of the world, these were all Private Companies, i.e. self financing. 

    Has complacency been our downfall?

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