More than 1,300 jobs are at risk at the UK’s largest rail assembly plant as its order book shrank amid HS2 setbacks.
French train company Alstom has notified staff at its Litchurch Lane train-making site in Derby that consultations on job cuts are to start and redundancies may be made.
Its order book has dried up after the first three months of next year, even though its work on the high-speed rail project HS2 is to start in 2026.
The government’s scheme has been beset by delays with a knock-on impact for contractors.
As many as 550 permanent and 780 temporary roles at Alstom could be cut as a result. A further 700 Alstom employees work in the engineering and global design unit at Litchurch Lane.
Work on trains has been taking place at the location since the Victorian era. Recently, trains for the new Elizabeth Line across London, also known as the Crossrail project, were built there.
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Alstom’s half-year results were published on Wednesday morning with the company warning of 1,500 job losses globally.
Share price falls throughout the year have meant about £3.62bn has been wiped off the firm’s market value in 2023.
Discussions with the government took place over six months in an effort to secure a future for the factory but no way forward was found, the company said.
It is planning for a “significant reduction in activity”.
“We remain open-minded as to the future of non-production functions located at Litchurch Lane and to potential future alternative uses for the Derby site,” Alstom added.
“We will begin an extensive review of options, and will fully involve our stakeholders in this process.”
A Department for Transport spokesperson 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.”
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Less than three years ago, Alstom acquired the business from Canadian firm Bombardier Transportation.
Alstom may be best known for its construction of the French TGV trains.
Last month, an operator of the Channel Tunnel, Evolyn, announced it was purchasing 12 Alstom trains to provide a Eurostar alternative.
