More than 1,300 workers at Alstom’s train factory in Derby have been told their jobs are at risk because of a lack of new orders, as the French manufacturer said it needed to raise cash from investors.
Alstom said the Derby facility had “no confirmed workload beyond the first quarter of 2024”, so it had started consultations over redundancies. The jobs of 550 permanent workers and 780 contractors are understood to be at risk.
Closure of the site would mark an end to production of trains in Derby for the first time since 1876, when the UK’s railway was expanding rapidly during the reign of Queen Victoria. During that time it has built rolling stock for railways across the UK, the London Underground and, most recently, London’s Elizabeth line.
Alstom’s Paris-listed shares slumped by 15% on Wednesday after it said it would burn through more than €500m (£436m) in this financial year. The company will try reduce its debt load by €2bn through asset sales and steep cost cuts.
The manufacturer said the threatened job cuts at Derby came despite talks with the UK government over the past six months. Alstom has been affected by uncertainty over an order for new trains for HS2, after Rishi Sunak scrapped the northern leg of the high-speed line initially proposed from London to Manchester. The trains were due to be built in Derby and at a Hitachi factory in Newton Aycliffe, County Durham.
Alstom employs 6,000 people across the UK, and 2,000 at the factory at Litchurch Lane, Derby.
An Alstom spokesperson said: “No committed way forward has yet been found and therefore it is with deep regret that we must now begin to plan for a significant reduction in activity at Derby by entering a period of collective consultation on potential redundancies at Litchurch Lane. We will fully support our dedicated colleagues during this exceptionally difficult time.”
Alstom’s figures suggest the company has built or is building 40% of the UK’s mainline trains, plus the entire fleet of London Underground trains. It also built the trains for Dublin’s Luas tram system.
The UK government chose Derby in March to be the headquarters of its new rail regulator, Great British Railways, in part because of the city’s heritage.
Litchurch Lane factory is the UK’s largest train plant, and the only British site capable of designing, building and testing trains. Alstom also has sites at Widnes, Crewe, Ilford and Plymouth for maintenance and repair. Its Japanese rival Hitachi, Germany’s Siemens and Spain’s CAF also have factories in the UK, but they design their trains elsewhere.
Alstom said it was “open-minded as to the future of non-production functions located at Litchurch Lane and to potential future alternative uses for the Derby site”, without giving more details of options it was considering.
Alstom bought the Derby factory from Canada’s Bombardier in 2021, in a deal that made it the world’s second largest train manufacturer after China’s CRRC. However, despite its strong €90bn order book, it has come under pressure because of debt and short-term cashflow problems.
Henri Poupart-Lafarge, the Alstom chair and chief executive, said: “While demand remains sustained, despite some volatility, our commercial performance has been soft.”
