Train supply chain suffers following Thameslink award

7 September 2011

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7 September 2011 | Daisy Carrington

Nearly a third of UK suppliers in the train manufacturing industry expect a substantial drop in sales because Bombardier missed out on a large government contract.

A survey, conducted by Survation on behalf of union Unite, found that of 125 companies interviewed, 32 per cent expect sales to be adversely affected. In addition, 19.2 per cent believed their growth would be substantially harmed.

The survey was conducted following the decision in July by The Department for Transport (DfT) to award the contract for new trains on the Thameslink project to Siemens over Bombardier, which owns the UK’s last train manufacturing plant in Derby.

Nearly a third of those interviewed have either already made workers redundant, or plan to do so in the next month. The survey also found the suppliers interviewed have in the past relied heavily on Bombardier for sales, while few have relied on Siemens, whose manufacturing facilities are in Germany.

For nearly half of those surveyed, Bombardier accounts for 5 per cent or more of their sales. And almost 6 per cent said 50 per cent or more of their business comes from Bombardier. By comparison, only 24 per cent of those firms surveyed supply Siemens. Of these businesses, 73 per cent said Siemens accounts for less than 5 per cent of their sales.

Speaking on the BBC in July, following the award of the contract to Siemens, transport secretary Philip Hammond said the DfT is looking at ways to increase support for the UK supply chain, to come into effect before tenders are submitted for the Crossrail project. He said he is confident that “even within the constraints of the EU procurement directive” it is possible to increase domestic bidders’ chances of success.

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