Hitachi employs 700 people at its UK plant and creates a further 1,400 jobs in its supply chain. Photo: Simon Maycock/Alamy Stock Photo
HS2 contractor Hitachi Rail is drawing up plans for job cuts at its UK plant after ministers' decision not to sign off orders for new trains left the manufacturer facing a six-month work drought.
Hitachi, whose UK plant employs 700 people and supports a further 1,400 jobs in its supply chain, was dealt a major blow last week after the Department for Transport refused to approve an order for new trains for the West Coast Avanti after two years of discussions.
The Labor Party has indicated it will continue to work on the contract if it comes to power, but a general election is unlikely before the autumn.
The Japanese company's bosses have therefore concluded that construction of the facility in County Durham is practically impossible. will likely face a six-month pause in train production. This has forced Hitachi to begin evaluating all options, according to sources close to the company.
Train production at the Newton Aycliffe plant is expected to peak in the summer and then decline from October following the completion of existing contracts with Avanti and East Midlands Railway.
There is a normal 12-month gap between signing supplier deals. and the start of parts deliveries means that assembly work will almost certainly have to be suspended even if Hitachi gets the go-ahead for the next tranche of the Avanti contract later this year.
This leaves hundreds of highly skilled manufacturing jobs. vulnerable. The remaining work, mostly testing, will allow the remaining employees to work only until next spring.
Any consultation on the redundancies will be extensive and Hitachi will seek to find alternative activities at the plant for as many employees as possible, the source said. Nothing has been finalized, and it is possible that the government could change its mind on the Avanti order in the coming months, which would minimize downtime on assembly lines.
Hitachi said it was “considering all remaining options available to us.” «to ensure our production teams continue to build rolling stock to support the UK rail industry» following the government's decision not to initiate a follow-on order for the Avanti, which has already been funded. A company representative declined to comment further.
Hitachi opened its Newton Aycliffe plant in 2015 after winning a deal to supply trains to the East Coast and Great Western main lines as part of the government's £5.7 billion intercity express programme. replace outdated rolling stock.
Despite receiving new orders from the UK, Hitachi has struggled to secure export deals that would help smooth out peaks and troughs in demand. Last year it wrote down the value of the site by almost £64 million as work began to dry up.
Britain's largest railway plant in Derby, run by rival manufacturer Alstom, faces an even more uncertain future, the paper warns ends in May or June.
The 180-year-old Litchurch Lane plant will be forced to close with the loss of all 3,000 jobs if new orders are not received soon, UK managing director Nick Crossfield said last week. The plant is one of Alstom's largest in the world, having been acquired by the French firm as part of the takeover of Canada's Bombardier in 2021.
Both Hitachi and Alstom have new business on the horizon if they can survive the next few years. , winning a joint £2.8 billion contract to build a fleet of trains for HS2. Work is expected to begin in 18 months, although assembly work will not begin for some time.
Hitachi is expected to produce the car bodies, with Alstom equipping and testing them. The cancellation of the HS2 network outside Birmingham should not affect the requirement for 54 trains as northern cities will continue to be served on existing tracks. It is unclear what would happen to the contract if either pair were to fall apart.
A Transport Ministry spokesman said the government was working with rolling stock manufacturers, including Hitachi, on a backlog of orders that should «stay.» will be strong in the coming years.»
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