LONDON (Kyodo) Unions and parliamentarians are protesting a decision by the British government to award a huge and lucrative train contract to a consortium led by a Japanese company.
They are angry that 30 percent of the contract to build a new fleet of express trains will be spent at Hitachi Ltd.’s plant in Kasado, Yamaguchi Prefecture, when there is a manufacturer that could carry out all the work in Britain, thereby securing existing jobs both at that company and its suppliers.
The criticism represents growing concern among British workers and unions that foreign companies are taking work from homegrown firms battling to stay afloat during the recession.
Agility Trains Ltd. — a consortium comprising Hitachi, John Laing and Barclays Private Equity — was the government’s preferred bidder for a £7.5 billion (about ¥1.05 trillion) contract to supply Britain’s intercity rail network with a fleet of Hitachi Super Express Trains.
The government said Hitachi was the best firm for the job even though the unsuccessful bidder, Canadian-owned Bombardier, already has a manufacturing base in Derby, central England, and is in need of new contracts, according to the town’s member of Parliament.
Derby’s local newspaper is running a campaign to change the government’s mind and award the contract to Bombardier, the only train maker in Britain. It currently employs 2,200 people and a further 10,000 in the local supply chain.
Perhaps conscious of the criticism the award would attract, Agility has been keen to point out that 70 percent of the new contract will be spent in Britain.
Hitachi plans to build a new plant in Britain and create 2,500 skilled engineering jobs in train manufacturing, construction and maintenance.
The firm is also in discussion with 20 British firms to supply components and services, and estimates a further 10,000 jobs will be safeguarded or created in the supply chain and local service sector.
This, however, has not been enough to silence opponents.
Derby politician Bob Laxton points out that the first 70 coaches will be made entirely in Kasado, and the shells of the remaining 1,330 carriages will be shipped to Britain for fitting out.
Given this fact, he questions how Hitachi can claim that 10,000 supply-chain jobs will be created in Britain and he is now seeking further clarification.
Opponents have trashed claims by Transport Secretary Geoff Hoon that the move will allow Britain to benefit from Japanese technology and become a European “center of excellence” in a similar way to the advantages accrued to the British automobile industry with the arrival of such Japanese brands as Nissan, Toyota and Honda.
As Laxton says, all the design and high-tech work will be carried out in Japan.
“As a member of Parliament for Derby, I’m just making the case that we already have a facility in Britain for making trains. Hitachi will also be looking for taxpayer assistance for any new plant it builds,” he said.
Bob Crow, general secretary of the National Union of Rail, Maritime and Transport Workers, criticized awarding the contract to Hitachi, saying it will be another blow to the country’s already weak train-making capacity.
“If Japan can manage to ensure that the high-speed fleet that operates on its own railways are manufactured entirely at home, there is no earthly reason why Britain cannot either,” he said in a statement.
Daniela Karthaus, of Hitachi Europe Ltd., said that while as much of the manufacturing as possible will take place in Britain, the technology used for constructing the bodywork is only available in Japan. The company has used complex models to estimate that 10,000 supply-chain jobs in Britain will be safeguarded, she added.
This is the first big train contract Hitachi has won in Europe and provides “a huge opportunity for us to build a manufacturing site in the U.K. and hopefully take it as the starting point for more contracts to be won in Europe,” she added.
Christian Wolmar, a writer on Britain’s rail system, said he was “fairly phlegmatic” over the award of the contract to a Japanese firm, arguing that Bombardier would have probably carried out some of the manufacturing overseas if it had won.
He said Hitachi was a strong candidate and will “undoubtedly” supply a good product.
On Hitachi’s aspirations to provide trains to the European Union market, Wolmar was more doubtful, adding that some continental countries are “much more protectionist even if they don’t want to admit it.”
Agility is currently the “preferred bidder” and is now consulting with the government on the contract, which is expected to be signed and sealed within a few months. In the meantime, Bombardier is being held as “reserve bidder” in case negotiations with Agility break down.
The new trains will start to be delivered for Britain’s main rail lines in 2013 and it is envisaged the contract will finish by 2018. The new trains will be more reliable, provide extra seats and are lighter than the current fleet, which is around 30 years old.
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