Train builder to cut 2,000 jobs

Sources have told Channel 4 News that Canada-based Bombardier is set to hold a press conference first thing on Tuesday morning where it will give staff at its Derby factory 90-day notices of redundancies.

The contract to build 1,200 new train carriages was awarded last month to Germany’s Siemens for the Thameslink line, which travels between Brighton and Bedford.

It is not clear exactly how many jobs would be affected but a union source inside the company has estimated that at least 1,200 jobs are immediately at risk, on top of 700 contractors.

Long term though, all 3,000 jobs could go, the source said. And unions said as many as 10,000 jobs in the wider economy, in firms that supply and distribute products to Bombardier, are also at risk.

The loss of the Thameslink project to Siemens represents in our view the potential last straw for this company. Unite

The cuts will come as a massive blow to the Government which has campaigned heavily for “British jobs for British workers” and to David Cameron and George Osborne, who have pinned their hopes on a manufacturing-led recovery for Britain’s flagging economy.

“The Government has got this one completely wrong,” the union source said. “Clearly they haven’t taken into account the social and economic cost of this decision.”

Shadow Business Secretary John Denham and his transport counterpart Maria Eagle said the Government had “dealt a body-blow to British manufacturing” and called for an immediate independent review.

The last straw

Last week it emerged that Philip Hammond, the Transport Secretary, and Vince Cable, the Business Secretary, wrote to Mr Cameron expressing concern that UK-based firms are consistently losing out to their European rivals in high-value procurement contests.

One Government source told Channel 4 News today: “Why is it that in France and Germany the big contracts tend to be awarded to their own big manufacturers? It’s not that they breach EU procurement rules, but it’s how they apply them.”

The union Unite, which represents the majority of workers at Bombardier’s Derbyshire plant, has also written to Mr Hammond and Mr Cable demanding an urgent meeting and calling for the Government to rethink its decision.

“The loss of the Thameslink project to Siemens represents in our view the potential last straw for this company in regards to keeping a viable production capability in the UK,” the letter addressed to Mr Hammond said.

“It surely must be recognised that if Bombardier was to go the cost to the East Midlands economy would be huge, in both direct jobs and supply chain and dependent businesses.”

Why is it that in France and Germany the big contracts tend to be awarded to their own big manufacturers? Government source

It added: “Your Government came to power stating that you wanted to re-balance the economy and yet the actions of allowing this project to go to Germany flies totally in the opposite direction.”

Transport minister Theresa Villiers has said the Government conduction a fair process and that the Siemens bid represented the best value for money for taxpayers.

Philip Hickson, leader of Derbyshire City Council, held a meeting with Bombardier last week, with a view to potentially moving other jobs to the Derby site from around Europe. But union sources said the conclusion was it would not be possible, which is why they now fear all 3,000 jobs at the site could go.

Winning the Thameslink contract was seen as key, given its size, and would have provided work for Bombardier for years to come.

Labour and Unite say it is now even less likely that Bombardier will have a shot at the two other lucrative Government contracts, Crossrail and High Speed Two, given the relationship with Siemens. And in the case of Crossrail, the trains will actually share some of the same track and technology.