Bombardier , the Thameslink Order and the future of train building in the UK.

Thameslink's choice of Siemens electric trains over the rival Bombardier offer has brought immediate huffing and puffing from a number of quarters including the unions who see the loss of 1,400 membership fees as most unwelcome.

True, it is sad to see a potential UK order go abroad .This one could probably have gone to the Derby facility of the Canadian Bombardier company and it probably is true to say that no other EU country would stick so rigidly as the UK to the bidding rules to its own overall disadvantage, but that's not new.

It is not true though that the loss of this large order has resulted in the issue of the 1,400 redundancy notices. The blame/reasons lie largely elsewhere. Bombardier ,right now at pretty much the peak of its production with 5 different contracts trains in the works, was about to face a large orders gap and the redundancies would almost certainly have happened anyway. Four of these current contracts will have been completed by the end of the year and actual construction work on the new Thameslink trains is around eighteen months to two years away.

Why has this production hiatus occured?

There are two basic reasons.

Firstly the UK domestic rail industry does not have a rolling programme of replacements and new builds as it did in nationalised British Rail days when it was much easier to have a co-ordinated national plan which delivered a steady and reliable stream of orders to the engineering arm of the company thereby avoiding the problems of peaks and troughs in work and use of resources. When the Thameslink contract was awarded it was more than 800 days since the previous order by or for any UK rail company. Hence the impending gap regardless of Thameslink.

Secondly, despite knowing that these gaps will occur and working with that as a fact of life, Bombardier UK does not vigorously persue overseas orders and with very few exceptions only builds trains for the British leasing companies and operators at Derby. That is a matter for their corporate strategy people and could therefore be changed if the parent company so desired. They have standard high quality electric and diesel trains, the Electrostar and Turbostar (Clubman to Chiltern Railways customers) for short and medium distances in high or low density layouts. Although optimised for the UK with its sub-EU loading guage these are exportable. For example orders from both the Irish Republic and Northern Ireland are have escaped and gone as far away as South Korea. The British Electrostar has only been exported to South Africa for the Johannesburg-Airport- Pretoria Gautrain project. It could have done better if more strenuously promoted.

On the political side, the UK Government is also to blame for the Bombardier redundancies. This is not though because the Thameslink contract was allowed go to Siemens who after all already suppy a number of UK operators including Heathrow Express with the British version of their Desiro trains. Government culpabilty lies in the very short duration of most franchises making a smooth flow of orders unlikely and co-ordination of them into the most economic sequences difficult. This is despite much micro managment of the train operating companies in other areas of their activity by the Department of Transport.

The unions only solution to any of these problems seems to be to scream for renationalisation but that's about political dogma, not economics. It isn't going to happen so they are wasting energy and breath which would be much better spent working with the companies on new productivity deals to bring down costs and encourage more investment rather than opposing just about anything that managments and the government propose. Certainly the unions are currently adding nothing useful to the debate about the continuation of a train building industry in the UK. They can be as "angry" as they like but that's not going to do anything for anyone, least of all the holders of 1,400 P45s.

As simply described here, Siemens getting the Thameslink contract is not the root of Bombardier's Derby problems. It also need not mean the end of Bombardier's train building in the UK .Indeed they would be foolish to completely walk away when they have other much better options to make a go of the British plant.