More than 1,300 jobs could be axed at the UK’s largest train factory amid a shortage of demand for rolling stock.
French company Alstom – which is due to build trains for HS2 – said its plant in Derby was under threat because it is running out of work.
That could see the site at Litchurch Lane close down with the loss of 550 permanent staff and 780 agency workers.
It also casts a further cloud over HS2, which faced spiralling costs and delays before Rishi Sunak last month scrapped the northern leg of the high-speed rail link.
Alstom’s Derby plant, which has been building trains since the Victorian era, was scheduled to start work on rolling stock for HS2 in late 2026.
Off the rails: French company Alstom – which is due to build trains for HS2 (pictured) – said its plant in Derby was under threat because it is running out of work
But it yesterday warned of a major gap in orders from next year with no confirmed work beyond the end of the first quarter of 2024.
The firm, which also builds France’s high speed TGV trains and is the world’s second largest rail company after China’s CRRC, is consulting on job losses at the site in Derby.
Labour MP for Derby South Margaret Beckett said she was ‘desperately disappointed’ by the news.
Unite union official Paresh Patel said announcing possible job cuts so close to Christmas was ‘an absolute disgrace’, adding: ‘This site has been here and has been part of this community for the past 180-odd years.
It’s a dedicated, skilled workforce.’ Alstom has been struggling under the weight of £3billion of debt following the acquisition of aviation firm Bombardier for £6billion in 2021. The group has been bleeding cash at a rate of £50million a month.
The company has 80,000 staff worldwide and it is understood that its other 4,000 workers in the UK, mainly in Crewe and Widnes, will be unaffected.
In a statement yesterday, an Alstom spokesman said: ‘Alstom UK has been working with government for the last six months with the joint objective of securing a sustainable future for our rolling stock factory at Derby Litchurch Lane, which has no confirmed workload beyond the first quarter of 2024.
‘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.’
Alstom said it remained ‘open-minded’ about the future of the Derby site.
Yet in a further blow to investors, Alstom revealed it was looking to raise around £1billion to shore up its battered balance sheet.
Shares fell as much as a fifth yesterday – adding to the near-50 per cent decline since the start of the year. The Derby plant was due to build the trains for HS2 alongside the Hitachi factory in Durham.
An HS2 spokesman said: ‘This is a matter for the company. The Hitachi Alstom joint venture was awarded the contract to build Britain’s new generation of high-speed trains in December 2021. Dates for delivery are currently under negotiation.’