Up to 250 jobs are set to be axed at a factory making trains in County Durham.
The Newton Aycliffe site opened in 2015 and has a workforce of 900 and will this year finish a £5.7 billion order for Inter City Express trains.
The manufacturer said it will begin a 45-day consultation process with staff about job losses as it looks to make its UK plant “more flexible, agile and globally competitive”, it said in a statement.
The move would allow train building projects to be delivered – the plant has orders for 61 new intercity trains with the first work due to begin later in 2020 – but also provides “flexibility to be scaled-up with staff on fixed-term contracts according to order demand”.
‘Preparing for next phase’
Hitachi said in the same announcement it will be spending £8.5 million on new carriage welding and painting facilities, making Newton Aycliffe similar to sister plants in Japan and Italy.
As the last of the 122 IEP trains nears completion, Newton Aycliffe’s workforce will be resized to a team of skilled, core full-time employees. This will allow key train building projects to be delivered, but also provides the flexibility to be scaled-up with staff on fixed-term contracts according to order demand.
This will ensure Hitachi is able to deliver its existing order book on time, as well as be ready to work on new manufacturing contracts. Currently, Newton Aycliffe has orders that include 61 new intercity trains for East Coast Open Access, East Midlands Railways and Avanti West Coast, with the first work due to begin in the second half of 2020.
As part of this process, today we begin a 45-day consultation with employees at the factory, as well as the union Unite, about reducing the number of permanent staff. While this could see up to 250 employees leave the company, there may be opportunities for a number of staff to be redeployed to other parts of Hitachi’s rail business.
Hitachi has said there could be opportunities to rehire if demand increases.
Ross Nagle, chief operating officer manufacturing, said: “New train fleets built by employees at Newton Aycliffe over the last four years are helping to transform Britain’s railway, of which we couldn’t be more proud.
“However, the cyclical nature of demand in the industry means the factory must be more flexible and agile to secure a long-term, sustainable future.”
The plant has won contracts to build trains for two British operators, starting this year.
The Tory elected mayor for Tees Valley Ben Houchen has previously criticised the Tyne and Wear Metro operators Nexus for not giving Hitachi a major contract to build new trains.
After the job loss announcement on Thursday, he said: “This news will be absolutely devastating to the loyal, hard-working staff at Hitachi Rail.
“This is yet more proof, if any more was needed, that Nexus have absolutely no intention of awarding the Tyne and Wear metro contract to Hitachi Rail.
“I said months ago that this would be the consequences of not awarding the contract to Hitachi, and I am sad that my prediction has become reality for 250 highly skilled people.
“This is the real-life cost of making stupid decisions and it’s clear that the Tyne and Wear council leaders who control Nexus have little regard for protecting jobs in the North East.”
The local Conservative MP for Sedgefield Paul Howell wrote on Facebook: “The news of potential job losses at Hitachi Rail is disappointing and I feel for employees receiving today’s most unwelcome news.
“At this stage it is a consultation and I am assured that Hitachi will work with all parties to look at opportunities to mitigate the impact to employees.
“I have spoken at length with Hitachi Rail and I have been personally assured that Hitachi Rail remains completely committed to Newton Aycliffe, the North East and the UK.
“I will be meeting with them next week for further discussion.
“Hitachi has clearly stated this decision is not related to Brexit and I understand today’s decision is about transitioning the factory so it can become even more sustainable and competitive for the long term and win more orders in the future.”
Unite regional officer Pat McCourt said: “The announcement of such large scale redundancies is bad news for the affected workers, their families and the local community.
“These redundancies need to be laid at the door of the Government.
“Its existing procurement policies mean that major contracts for new trains are too readily awarded to overseas companies, depriving factories in the UK of work.
“If the Government is serious about protecting jobs and skills going forward then procurement policies need to be radically reformed.
“Ensuring that future major train contracts are awarded in the UK will be an early test of the Government and whether it is serious about backing UK manufacturing.
“Ensuring that new work is secured for the Hitachi factory will be a major test for the new Conservative MP who was elected last month on a pledge to deliver for local people.”
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