UK Train Building Future Under Threat? (A Telegraph Article)

[fgwrich]

As seen in today's Telegraph.

Haven’t we been here already with Newton Aycliffe? The Kitten theory rears it head all over again. And without an overnight rolling out of electrification or increased passenger demand on some routes, it’s hard to see, or how we can justify for that matter, any considerable rolling stock orders for a while (Or in Alstom & Hitachi’s case, until they’ve fixed the issues with their fleets first eg SWR 701 for Alstom and IET Cracking for Hitachi). Of course we will still need to eliminate somme DMUs in the future, but do we have enough in the pipeline to sustain that of 4 Large UK assembly plants?

Dither and delay’ will collapse Britain’s train-building industry, minister warned

Manufacturers say 20,000 jobs in jeopardy unless government reboots multibillion-pound contracts

By

Oliver Gill,

CHIEF BUSINESS CORRESPONDENT

13 March 2023 • 6:00am



The fate of 20,000 train manufacturing workers is in jeopardy because of the UK’s “dither and delay” in delivering a coherent industrial strategy, the Government will be warned.

Manufacturers and financiers are to tell Huw Merriman, the rail minister, that Britain’s long history in building trains is now under threat during crunch talks on Monday.

Executives from Britain’s three main train manufacturers - Alstom, Hitachi and Siemens - are expected to underline the increasing attractiveness of moving UK operations abroad because of the vast subsidies on offer in the EU and America.

The three businesses employ 20,000 skilled workers across UK sites, with thousands more jobs indirectly impacted at British suppliers.

Mr Merriman will be urged to reboot an estimated £4.5bn pipeline of train-building contracts “or else”, according to a source close to the talks. The rail minister will meet manufacturers in the morning and leasing firms such as Eversholt and Porterbrook in the afternoon.

Alstom and Hitachi are understood to also demand assurances from Mr Merriman that their £2.7bn contract to build trains for the Government’s HS2 is not in jeopardy.

Whitehall sources this weekend said that Mr Merriman will insist that the Hitachi-Alstom HS2 joint venture will not be impacted by the delayed rollout of HS2 that was announced last week. Trains will still be needed for testing services and for the section between Old Oak Common and Birmingham, they said.



Although Britain’s train building plants retain a history that can be traced back to the 19th century, all three of the main train makers are now in the hands of foreign-headquartered multinational companies.

France’s Alstom, which last year acquired Bombardier, owns one of Britain’s best-known works in Derby. Another at Newton Aycliffe is in the hands of Japan’s Hitachi. Siemens has a large plant in Goole that was opened by Boris Johnson in 2020.

New trains have previously announced new trains on a number of lines such as South Western Railway, Great Western Railway and Chiltern Railway - but have been subsequently shunted into the sidings.

In part, this is a function of the scrapping of franchising in May 2021. Under the old structure, train operators would include plans to buy new trains - known as rolling stock - in their tenders to the Government.

Since the end of franchising, Whitehall has been responsible for finalising new train orders.

One senior industry figure said: “The simple fact of the matter is that years of dither and delay, from electrification and signalling upgrades to orders for rolling stock, has ravaged the UK rail industry.

“The opportunity to revive UK rail is unparalleled but it will take more than lukewarm words from the Government. We need to see urgent action. Without urgent action companies will begin questioning their investment strategies in the UK."

Another source added: “The news this week that HS2 will be delayed and descoped is likely to see a significant reduction in the amount of rolling stock required for the route. This represents a further blow to the UK rail manufacturing sector and supply chain which employs 20,000 people and relies on capital deployed by world-class financiers.

“There is a very real danger this government's feast and famine approach to rolling stock procurement is repeating the mistakes of the late 1990s and early noughties which saw a more than 1,000 day hiatus in UK train orders.

“Ahead of the Budget the Chancellor and his colleagues need to make some decisions on the near £4bn future train procurement pipeline or risk capacity and capital flight to countries with an actual industrial strategy and plan.”

A Government source said that more than 5,300 trains had been built in the UK since 2010. “We encourage those manufacturing in the UK to continue to use the UK as a base from which to export,” they said.

A Department for Transport spokesman added: “The Department’s rail investments will continue to support manufacturing across the country.” https://www.telegraph.co.uk/busines...pse-birtains-train-building-industry/#comment

 

[800001]

https://www.telegraph.co.uk/busines...pse-birtains-train-building-industry/#comment

Story in todays Telegraph. Now, haven’t we been here before with Newton Aycliffe. And without an overnight rolling out of electrification or increased passenger demand on some routes, it’s hard to see, or justify, any new stock orders for a while. Or in Alstom & Hitachi’s case, until they’ve fixed the issues with their fleets first (SWR 701 / IET Cracking).

New build Hitachi, ie for East Midland Railways have the crack issue sorted.

To me, too many factories in this country opened just so the government could tick the ‘made in uk’ box.

Eg Hitachi IET project, yet the shells came from Japan 40% assembled.

CAF and Siemens both recent addictions as well.

 

[LNW-GW Joint]

Siemens' problem is that their Deep Tube order, which could have expanded into a huge one and kept Goole busy for a long period, looks like being of a very limited size.
They have no main line orders in the pipeline.
Hitachi has the HS2 order, but with HS2 spend being spread over a longer period, will take time to mature.
The DfT shows no signs of wanting to place any new orders while existing trains are being mothballed as services are thinned out.
Any DMU orders are likely to go to CAF/Stadler who were seemingly not involved in today's meeting.
The railway still has to work through the cascades following delivery of current orders (notably displacing 22x/175/180/158/185/350/379/707).
The DfT seems to think that the manufacturers should be looking to build for export (from the UK).

 

[Meerkat]

As always with large scale factories its hard to tell how much 'well they would say that' there is. Maybe they have read this place and are heading off the Stadler love in!!
Something will surely have to be done about Southeastern, which could be a huge order for Derby if they haven't destroyed all confidence with Aventra.
Goole should be OK - not buying new tube trains will damage northern and London votes.
If Hitachi really could close the government could go for bi-modes for XC (when is that election?)
CAF better hope Hitachi, and maybe Alstom, can't offer a credible bi-mode as UKG might favour an older English factory than one the Welsh government attracted.

 

[Master29]

Ah the Telegraph. Another halcyon days bull pooh production unit.

 

[Economist]

What we could do is have a train construction company owned by the state to produce and refurbish rail vehicles of many kinds, both passenger and freight on a continuous basis.

Indeed, we had such an organisation, it was called British Rail Engineering Limited and I used to drive some of their products.

 

[zwk500]

What we could do is have a train construction company owned by the state to produce and refurbish rail vehicles of many kinds, both passenger and freight on a continuous basis.

Indeed, we had such an organisation, it was called British Rail Engineering Limited and I used to drive some of their products.

But BREL struggled on the international market and ultimately train design is a very expensive process so you need to spread your costs across a very large number of units. It is hard to see a reformed BREL being funded to a level where it could compete against Siemens, Hitachi, CAF, Alstom, GE etc on a commercial basis.

 

[HSTEd]

But BREL struggled on the international market and ultimately train design is a very expensive process so you need to spread your costs across a very large number of units.

Given that the Network Rail passenger rail fleet is about 16,000 vehicles, the UK market could easily sustain the production of several hundred vehicles per year indefinitely even if no further growth happens. At average 30-ish year life you'd be looking at 530 per year. That's the Crossrail order every 15 months.

That's more than enough to justify the maintenance of a train development office and production line. Development costs would likely be amortised down to almost nothing fairly easily.

 

[Facing Back]

Given that the Network Rail passenger rail fleet is about 16,000 vehicles, the UK market could easily sustain the production of several hundred vehicles per year indefinitely even if no further growth happens. At average 30-ish year life you'd be looking at 530 per year. That's the Crossrail order every 15 months.

That's more than enough to justify the maintenance of a train development office and production line. Development costs would likely be amortised down to almost nothing fairly easily.

You really think so? We would getter better value for money, more innovation and higher quality from a small in-house operation designing and building trains purely for the UK market vs 3 global giants competing for the business with experience, designs and tooling which can be "amortised" across a market 50 times the size?

These firms all have a large presence in the UK - and pay their corporation tax on profits from the UK orders here.

I'm not convinced the provincial approach is an improvement.

 

[RailWonderer]

To me, too many factories in this country opened just so the government could tick the ‘made in uk’ box.

Totally agree. There just isn't enough rolling stock demand to keep CAF Newport, Siemens Goole, Hitachi Newton Aycliffe and Alstom Derby all open.

Given that the Network Rail passenger rail fleet is about 16,000 vehicles, the UK market could easily sustain the production of several hundred vehicles per year indefinitely even if no further growth happens. At average 30-ish year life you'd be looking at 530 per year. That's the Crossrail order every 15 months.

That's more than enough to justify the maintenance of a train development office and production line. Development costs would likely be amortised down to almost nothing fairly easily.

In theory yes, but a lot of rolling stock has been replaced these last few years. Wholesale CAF DMUs on Northern, WMR and TfW, IETs for LNER, GWR, Hull Trains, Lumo, TPE, and Avanti and EMR, Aventras for GA, LNR, SWR, Elizabeth Line and LO.

There isn't demand for that rate of replacement for the next decade - Southeastern, GWR, Northern and Scotrail are looking at replacements in that timeframe and even with those operators, cascades will fill some gaps.

 

[ComUtoR]

These firms all have a large presence in the UK

How much of a train is actually built in the UK ? I remember seeing a documentary about train building and many parts are made abroad and then shipped to the UK for assembly. We also have a problem where parts are sourced from Germany so take forever to be shipped to the UK. They may have a 'presence here' but I wonder how much of a presence that really is.

I'm not convinced the provincial approach is an improvement.

I think what some people want is a train to be designed and built entirely in the UK as well as being maintained, in the long term, in the UK. There are probably some who would also want the reduction in mileage for many of the parts rather than shipping stuff halfway across the world every time.

 

[Facing Back]

How much of a train is actually built in the UK ? I remember seeing a documentary about train building and many parts are made abroad and then shipped to the UK for assembly. We also have a problem where parts are sourced from Germany so take forever to be shipped to the UK. They may have a 'presence here' but I wonder how much of a presence that really is.

Off the top of my head and without looking it up I don't know. I keep hearing "between 40% and 80%". We also lose out on a number of the highly skilled design jobs in some cases, notably Hitachi. Ideally we would have the giants based here and export all over the world but that's not going to happen either.

== Doublepost prevention - post automatically merged: 13 Mar 2023 ==

I think what some people want is a train to be designed and built entirely in the UK as well as being maintained, in the long term, in the UK. There are probably some who would also want the reduction in mileage for many of the parts rather than shipping stuff halfway across the world every time.

I am sure that many people do want that. I wonder how much the trains would cost if we just built our own. If we exported them of course then the shipping argument is moot.

As I understand it, the maintenance is done in the UK - and as it is built into the contract price, it seems to be one of the reasons why the IET trains seem such poor value.

 

[corsaVXR]

To me, too many factories in this country opened just so the government could tick the ‘made in uk’ box.

Eg Hitachi IET project, yet the shells came from Japan 40% assembled.

If you're setting up a new factory, it's best to minimise the risk.

You could go all in, and have body fabrication, painting and assembly starting from scratch, but you would be chasing build quality issues all over the place. Especially while they're setting up their local build processes and quality procedures.

Over time, you increase capability as the factory demonstrates their capability increasing. My understanding is that Newton Aycliffe is now doing some of their own body fabrication.


In terms of addressing the capacity over demand issue... well most cities could do with more light rail, like is done in Germany. More rail=more trains.

 

[Pete_uk]

I wonder what the situation will be if/when all the 15x/16x fleet renewal gets going?

 

[corsaVXR]

Off the top of my head and without looking it up I don't know. I keep hearing "between 40% and 80%". We also lose out on a number of the highly skilled design jobs in some cases, notably Hitachi. Ideally we would have the giants based here and export all over the world but that's not going to happen either.

Depends on the part and demand.

If a part is highly specialised, and is in low demand, then it's not cost effective to have 2 special machines/processes to create it, located in two separate places. More efficient to only have 1 place making it with 1 machine / process.

If a part is quite generic, say flat glass, then that should be localised as much as possible.

 

[HSTEd]

You really think so? We would getter better value for money, more innovation and higher quality from a small in-house operation designing and building trains purely for the UK market

The "innovation" that is going on is not always for the benefit of the public.

A lot of innovation by those manufacturers in recent years has gone into innovating new ways to create manufacturer lock in long term. Which benefits the shareholders but does not benefit the public in the slightest.

vs 3 global giants competing for the business with experience, designs and tooling which can be "amortised" across a market 50 times the size?

A hell of a lot of design and tooling work is of no use outside the UK given that our trains are fundamentally a different shape to most everyone elses.

On what remains, once the costs have been amortised down to a pittance already, further amortisation doesn't save you much money.
Half a pittance is not much less than a pittance.

These firms all have a large presence in the UK - and pay their corporation tax on profits from the UK orders here.

These firms have a large presence here right now, but as this article intimates, are already threatening to close their facilities unless the Government provides additional subsidies.

The reality is the UK has enough work for one train production line and thats it.
Trying to spread them over three is just going to result in three heavily subsidised production lines duplicating effort.

Meanwhile the railway is lumbered with the operational problems of having a zoo of train types.

 

[Facing Back]

Depends on the part and demand.

If a part is highly specialised, and is in low demand, then it's not cost effective to have 2 special machines/processes to create it, located in two separate places. More efficient to only have 1 place making it with 1 machine / process.

If a part is quite generic, say flat glass, then that should be localised as much as possible.

Agreed, and I would hope that is the case here.

The Hitachi facility in Newton Aycliffe (AIUI) was been upgraded with a welding and paint shops so more of the class 800 work was done there, but gearing up for large scale aluminium pressing for a low volume product is incredibly expensive to I would assume that would stay in Japan.

I don't know what they have planned for the HS2 fleet - it will be interesting to find out.

 

[Sad Sprinter]

We don't have a train building industry. Just assembling outlets of other country's train builders. We destroyed ours so trains like the one in my profile pic didn't get built.

Who would have thought cancelling electrification projects would dampen the demand for new trains?

 

[corsaVXR]

I don't know what they have planned for the HS2 fleet - it will be interesting to find out.

At the current rate of scope rollback by the government, Pacers.

 

[Facing Back]

At the current rate of scope rollback by the government, Pacers.

lol - you're either very cynical or have a marvellously dry sense of humour

 

[PG]

These firms have a large presence here right now, but as this article intimates, are already threatening to close their facilities unless the Government provides additional subsidies.

I can't remember exactly when Roger Ford expounded the Kittens theory in Modern Railways but it's at least 5 years ago. Basically train factories are the kittens and the manufacturers are threatening to drown them in the hope that they can guilt trip the government into saving them.

 

[Facing Back]

The "innovation" that is going on is not always for the benefit of the public.

A lot of innovation by those manufacturers in recent years has gone into innovating new ways to create manufacturer lock in long term. Which benefits the shareholders but does not benefit the public in the slightest.

Are you referring to the manufacturers owning the intellectual property for the designs and innovations or is it is more of a comment about maintenance?

IP - yes, if we rolled our own then we would own the IP. Which would have value only if we wanted to sell the product overseas - which it seems we don't, or at least didn't during the BREL days. If a company designs a product for multiple markets then they will of course retain the IP, however we don't pay the full design cost as it is spread across a much broader market.

For maintenance, if we contract the supplier to maintain it for 30 years its a bit moot but if don't want that and enter into a purchase contract which doesn't give sufficient engineering information to allow for maintenance then we've made a mistake during the procurement.

 

[HSTEd]

Are you referring to the manufacturers owning the intellectual property for the designs and innovations or is it is more of a comment about maintenance?

IP - yes, if we rolled our own then we would own the IP. Which would have value only if we wanted to sell the product overseas - which it seems we don't, or at least didn't during the BREL days. If a company designs a product for multiple markets then they will of course retain the IP, however we don't pay the full design cost as it is spread across a much broader market.

For maintenance, if we contract the supplier to maintain it for 30 years its a bit moot but if don't want that and enter into a purchase contract which doesn't give sufficient engineering information to allow for maintenance then we've made a mistake during the procurement.

I was referring primarily to all the problems with TMS type control systems and the proliferation of numerous incompatible multiple working systems. Although obviously the spare parts issues don't help either.

BR spent a lot of work in the late BR era fixing the mess they created with the first gen procurement process. And it was all undone in the early years of privatisation. The presence of numerous very similar role but totally incompatible fleets is going to be causing the railway headaches for decades to come.

 

[SamYeager]

Ah the Telegraph. Another halcyon days bull pooh production unit.

Because the Grauniad & Mirror produce such quality articles about rail?

 

[Mikey C]

The problem is ever with boom and bust. Hitachi have had massive orders for IET derivatives, Bombardier/Alstom for Aventras (some of which actually work), but inevitably there's a lull once the big peaks are over. If Derby and Newton Aycliffe were state owned, they'd still be running out of work. And if there had been more electrification done, then existing fleets like the displaced 379s and 350/2s would be used

The Siemens Goole situation is a bit different, as the follow on tube trains for the Bakerloo Line, then Central are desperately needed, but are caught up in the TFL financing issues (plus the political clashes between the Government and Mayor).

 

[43096]

I was referring primarily to all the problems with TMS type control systems and the proliferation of numerous incompatible multiple working systems. Although obviously the spare parts issues don't help either.

As opposed to the proliferation of multiple working systems and technical inertia - persisting with vacuum brakes, steam heat, short-wheelbase wagons etc etc - that we had under BR. The one area that did deal with some of those issues, the Southern, got stuck with its own inertia in terms of retaining slam doors.

BR spent a lot of work in the late BR era fixing the mess they created with the first gen procurement process. And it was all undone in the early years of privatisation. The presence of numerous very similar role but totally incompatible fleets is going to be causing the railway headaches for decades to come.

BR created a load of mess as well in that period - as one example, units with ostensibly the same couplings being wired differently purely to stop different bits of the business borrowing each others' trains.

 

[Facing Back]

BR created a load of mess as well in that period - as one example, units with ostensibly the same couplings being wired differently purely to stop different bits of the business borrowing each others' trains.

Really? I can't help but laugh at that....

 

[43096]

Really? I can't help but laugh at that....

The NSE 165/166 fleet was wired differently to the Regional Railways Sprinter/Pacer fleets despite having the same couplers.

 

[PG]

Really? I can't help but laugh at that....

Makes me wonder if any of the Hitachi 8xx fleets are incompatible coupler wise?

Edit: or any of the Aventra's for that matter?

 

[Facing Back]

The NSE 165/166 fleet was wired differently to the Regional Railways Sprinter/Pacer fleets despite having the same couplers.

....keep your sticky fingers off my nice clean train....