Capital contract: Six carriages a week are being built for the London Underground
Staff at Bombardier’s train-building business at Litchurch Lane in Derby know what it is to be at the centre of a protracted media storm. Carry out a Google search for Bombardier Thameslink and it delivers more than 35,000 results.
These span the period from 2011, when the controversial decision was made to award the £1.4 billion Thameslink contract to German rival Siemens, to the present day. The issue still fires up the ire of local newspapers and stokes the wrath of union officials.
There have been inquiries and inquisitions – including by the House of Commons transport select committee, which examined rolling-stock procurement after the Thameslink deal went to Siemens, resulting in 1,400 job losses at the Derby site. The concern is that British firms could miss out on big procurement contracts in the offing – including a £1 billion order to supply rolling stock for London’s Crossrail project, and, further down the line, the potential to supply infrastructure and trains for High-Speed Two.
For those firms that rise to the challenge, these are good times to be in the industry, believes Francis Paonessa, the former engineer who is president of UK rolling stock and services for Bombardier. “I listen to what’s coming out of government and it’s positive stuff,” he says. “It’s about investing in infrastructure and using manufacturing as a route out of recession. I’m all for that. What the public is looking to see now is those words turned into actions.”
He is quite clear that Bombardier quickly moved on following the blow of missing out on Thameslink. He had joined the business in 2010 when the bid was well under way. “Thameslink had a lot of history before I joined,” he recalls. “We put in a strong bid, and we compete with Siemens worldwide. They are a strong competitor, there’s no doubt about that, and a very technically competent company. Sometimes it’s a case of, you win some, you lose some. We lost this one.”
There were some suggestions in the wake of the Thameslink decision that procurement rules should be reviewed, or that some European countries favoured their own firms in a way that was unheard of in Britain. “I don’t think anything about it could be said to be unfair,” says Paonessa.
He believes that the focus on manufacturing as a possible way of rebalancing the economy following the 2010 general election made the Thameslink issue a particularly pertinent one for the media and spurred greater interest than normal in a manufacturing story. “It captured the public imagination and media interest – of which there was a lot,” he says. “I think it was more to do with UK industrial strategy, and we were a catalyst that made people think about what we want to see manufactured here – not just rolling stock.
Paonessa: ‘I listen to what’s coming out of the government and it’s positive stuff’
“But we moved on quite quickly. The media interest was there for longer. I wouldn’t say it was overhyped: it was a focal point. It served a purpose in the public debate. But we stepped out of that debate early on, having expressed our disappointment. After that, it sounds like sour grapes.”
Today, there are 1,400 employees on the site at Litchurch Lane, including an engineering team of 350. The plant is busy, especially with contracts to make Electrostar rolling stock for lines including Southern Railways, and trains for London Underground sub-surface routes – Circle, District, Metropolitan and Hammersmith & City – for which six carriages are being produced each week.
Bombardier has a studio where it offers customers 3D walkthroughs of potential trains, and a concept called Aventra which it intends to be its electric multiple unit rolling-stock design of the future.
Paonessa says: “For new build we have on order or have built 60% of the UK modern-era rolling stock, and from a services perspective we support the maintenance of 40% of the British fleet.”
He cannot talk about the details of the company’s bid for Crossrail but says of bidding in general: “At a very early stage we engage with the operator and the rolling-stock companies to understand the things that will matter to them, and to try and deduce what will be part of the evaluation criteria. We have to make sure we are maximising between us what we think the operator and the passenger will want.”
When developing Aventra, Bombardier’s engineers sought the opinions of their colleagues at the rolling-stock firms and the Association of Train Operating Companies on what the technical and physical demands were likely to be on the next generation of electric multiple units. “What we’ve got in Aventra is hopefully going to be our platform for the next 15 years,” says Paonessa.
Trains, much like planes, need to be lighter, and to save energy, and passengers have higher expectations of rolling stock these days. In addition, operators are increasingly looking at the whole-life costs of running a train. Bombardier’s global centre of excellence for aluminium train design is at Derby and its expertise has fed into concepts for trains for the North American and Swiss markets. In some world markets, customers are interested in less sophisticated designs but in building up indigenous manufacturing capability, says Paonessa.
In terms of Britain’s indigenous capability, Bombardier is typically thought of as being the only manufacturer of rolling stock. But Japan’s Hitachi is building a factory in County Durham where it will at least assemble Britain’s new fleet of intercity trains, although many have questioned how much of the actual manufacturing will take place on these shores. For instance, it is thought that the body shells will be imported from Japan.
“Any time I see more manufacturing taking place in the UK, I think that’s good for the country – and the taxpayer,” says Paonessa. “But we have a different philosophy to Hitachi. Bombardier’s approach is to localise in the market. If you look at the company globally, we’ve got large design and manufacturing presences in lots of different countries. The consequence of that is that 92% of the parts of the trains being built here in Derby are actually ordered from companies in the UK.
“I don’t know specifically what Hitachi is doing, but certainly it strikes me that where you design tends to be where you procure a lot of the parts and equipment from.”
Derby is benefiting from a rail industry cluster that includes about 100 companies, says Paonessa. These employ 25,000 people, in addition to the large numbers working for near neighbours such as Rolls-Royce, Toyota and JCB. This means 10% of the city’s population is employed in manufacturing.
Bombardier itself has existed in Derby in one form or another for 174 years. In the coming decades, High-Speed Two may provide another opportunity for the business, despite recent disappointments. “We have world-leading high-speed train technology in Bombardier,” says Paonessa.
“With our history, to me it’s quite humbling to be looking after the business for a relatively short space of time – and making sure it’s good for the future.”