Thameslink, Siemens deal hurts UK train supply chain
UK businesses involved in the train manufacturing industry are scrambling after a large government contract was awarded to Siemens over Bombardier, the world’s only manufacturer of both airplanes and trains.
The new deal to construct 1,200 new train carriages has already cost the UK’s Treasury £20 million in tax receipts, Members of Parliament were reportedly told. By awarding the £1.4 billion contract to Siemens, 1,400 jobs are expected to be lost throughout the UK.
The contract could cost the local economy £100 million, according to a report on PublicFinance.co.uk.
A survey conducted by Survation on behalf of Unite found that 32 percent of companies surveyed expect the deal to negatively impact their business. In addition, close to 20 percent believe their business growth will be ‘substantially harmed.’
SEE OTHER TOP FREIGHT RAIL STORIES ON THE SUPPLY CHAIN DIGITAL CONTENT NETWORK
In July, The Department of Transport chose to award a contract for new trains on the Thameslink project to German engineering conglomerate Siemens. Bombardier, who was favored by some to win that contract, owns the last train manufacturing plant in the UK.
According to the survey, almost one third of the companies have already made some of their workers redundant, or are planning to do so within a month. The survey also found that nearly half of the respondents count on Bombardier for 5 percent or more of their total sales.
Another 6 percent claimed that Bombardier supplied at least half of their business.
By comparison, the survey found that only 24 percent of UK’s suppliers work with Siemens, with 73 percent saying that Siemens contracts account for less than 5 percent of their total sales.