More than 1,300 UK jobs at risk after HS2 setback

HS2

More than 1,300 jobs are at risk at Britain’s biggest train factory following Rishi Sunak’s decision to scale back the High Speed 2 (HS2) rail project.

Alstom, the French train manufacturer, said it may be forced to mothball the historic Litchurch Lane site, in Derby, because of a lack of work beyond the start of next year.

The situation has been worsened by the Prime Minister’s decision to part-cancel HS2 last month, which has created uncertainty about the scope of the company’s contract to build trains for the megaproject from 2026.

Mr Sunak scrapped the northern section of the scheme and dramatically scaled back plans for a station at Euston, changes that are expected to result in fewer trains being needed for the line.

On Wednesday, Alstom said it had held protracted talks with the Government about the Derby factory’s future but said time was now running out.

The company is proposing to axe 550 permanent roles and 780 temporary ones if no solution is found.

Workers at the site have been building rolling stock for the Cairo monorail system and a series of Alstom’s Aventra trains for customers including Transport for London (TfL), which uses them on the new Elizabeth Line.

After the first quarter of 2024, however, the contracts are set to dry up until 2026 when the HS2 contract is ostensibly set to begin.

Under that deal, Alstom and Hitachi Rail have been jointly awarded a £1.1bn contract to build 54 high speed trains for HS2.

However, it is understood Mr Sunak’s decision to scale back the project has created serious doubt about whether the duration and scope of that work will remain the same, including whether it will still begin in 2026.

While HS2 Ltd and the Department for Transport are yet to confirm the implications of recent changes, Alstom has been in talks with the Government about shoring up its pipeline of work in the interim.

One option being looked at includes extensions of existing contracts, such as work to build more Aventra trains for TfL.

Another would be for the Government to tender new contracts. To provide work quickly enough to save the factory, tenders would likely have to be for train refurbishment projects rather than for new-build rolling stock.

An Alstom spokesperson said: “Alstom UK has been working with the Government for the last six months with the joint objective of securing a sustainable future for our rolling stock factory at Derby Litchurch Lane.

“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.”

The spokesman added that the company looked forward to “fulfilling our commitments on HS2” and that it was “open minded” about future uses for Litchurch Lane, where trains have been made since 1840.

A Department for Transport spokesman said: “Rail manufacturing is an important part of the UK economy and we will work closely with Alstom as it continues to deliver its contractual commitments, as we do with all rolling stock manufacturers.

“While this is a commercial matter for the company, we have already set up a dedicated cross-Government taskforce to properly support workers at Alstom during what will be a concerning time.”