After Hitachi Rail Europe missed out on a massive London contract, deputy business editor Steven Hugill looks at the impact of the decision
A NORTH-EAST train builder has vowed a £1bn Government snub will not damage its presence in the region.
Hitachi says plans to create hundreds of jobs remain secure, despite ministers rejecting their bid for a lucrative Crossrail contract.
The Japanese company had hoped to make rolling stock for the London Crossrail development at its £82m Merchant Park plant in Newton Aycliffe, County Durham.
However, the Government awarded the contract to Derby-based rival Bombardier, who will make 65 trains for the service, each capable of carrying 1,500 passengers.
Crossrail, which is Europe's largest construction project, is expected to open in 2018.
Hitachi will start work at its Newton Aycliffe factory in 2016, employing 730 workers.
Bosses told The Northern Echo they were extremely disappointed, but said it already boasted a strong order book, including deals to make high speed trains for the East Coast and Great Western lines.
It is also bidding for work to supply Germany's rail network.
A spokeswoman said: “This doesn't change our plans at Newton Aycliffe in any way.
“It would have just been another boost for the factory and for the order book, and we are as committed to Aycliffe as we always have been.
“We are very disappointed over the Crossrail bid, but remain committed to building trains for the UK and Europe from our Newton Aycliffe plant.
“We will also be seeking feedback from Crossrail to understand how we can improve our bids to secure ongoing employment for the growing team at Aycliffe and our many UK suppliers.”
Phil Wilson, MP for Sedgefield, played a pivotal role in Hitachi choosing Newton Aycliffe as its base, and said he remained extremely optimistic about its future.
He said: “This is disappointing news because if the firm was successful, it would have led to the further expansion to the factory.
“However, the Aycliffe plant and Hitachi still have a big and bright future and they are there very much for the long-term.
“There will be other contracts that Hitachi will bid for and will be successful, so this in no way undermines its presence in the North-East.
“When they made their £82m investment in Aycliffe, the company did so in the knowledge that they would not win every contract.
“This bid just shows the ambition it has for Aycliffe in targeting such high-profile contracts to support hundreds of North-East jobs.”
Dr Simon Goon, managing director of Business Durham, Durham County Council's business division, added: “I'm sure there are other irons in the fire and we will continue to support Hitachi.”
The decision to hand the work to Bombardier, which three years ago lost out to Siemens on a £1.6bn Thameslink contract, was hailed by Transport Secretary Patrick McLoughlin.
Mr McLoughlin, whose Derbyshire Dales constituency is just miles from Bombardier's Derby plant, last year visited the site of Hitachi's Aycliffe factory and praised its work.
He said: “This announcement will mean state of the art trains providing quick and comfortable journeys for the millions of people, and is great news for UK manufacturing.
“Hitachi has a huge order and is determined to win more, not only in the UK, but across Europe.”
WHAT IS CROSSRAIL?
- Crossrail is supporting more than 10,000 jobs
- It has provided work Darlington's Cleveland Bridge, which won seven contracts to supply about 2,500 tonnes of steel for stations in Bond Street and Paddington and bridges at Canary Wharf
- The scheme also delivered contracts to borehole-drilling company Drillcorp, in Seaham, County Durham, crane supplier Mammoet, based in Billingham, near Stockton, and Gateshead's Goodall, Bates and Todd, which supplied engineering lubricants
- Further contracts were given to waste sewage removal specialist Conder Solutions, in Peterlee, east Durham, and Sitelink Communications, in Washington, Wearside, which supplied two-way radios
- Crossrail will include 38 stations, including nine new stops, bringing an extra 1.5 million people to within 45 minutes of central London
WHO ARE BOMBARDIER?
- Employing more than 71,000 workers, it is headquarted in Montréal, Canada, and makes planes and trains
- Its train-building division has 64 plants in 26 countries, which employ about 36,000 workers who have helped make more than 100,000 carriages and locomotives worldwide
- Bosses say the Crossrail deal will create 340 new jobs and support 760 posts and 80 apprenticeships
- Bombardier's aerospace division employs 35,500 people and specialises in business, commercial and amphibious aircraft
THE HITACHI CHAIN:
- Its Aycliffe factory will build more than 860 carriages from 2016 for the Government's Intercity Express Programme, revamping the UK's 40-year-old high-speed train fleet.
- It will build the first trains in the company's factory in Kasado, Japan, which will be shipped to the UK for testing in early 2015, with subsequent trains manufactured in Aycliffe.
- The company has strengthened the North-East's supply chain, with contractor Shepherd Construction, in Darlington, overseeing the building of the plant.
- Aycliffe's Finley Structures will construct the main factory's steel frame, and Romag, in Leadgate, near Consett, County Durham, will make and repair train windows