British train manufacturer Bombardier confirms it will shed 1,400 jobs after a Government decision to award the £1.5bn Thameslink contract to a German rival.
The Derby-based company said the job cuts would affect 446 permanent staff and 983 temporary staff.
Francis Paonessa, president of Bombardier’s passenger division for the UK, told staff: “We regret this outcome but without new orders we cannot maintain the current level of employment and activity at Derby.”
“Over the next 90 days, together with employee representatives we will work with individual employees to ensure the best possible outcome for our people.”
Colin Walton, chairman of Bombardier Transportation in the UK, said: “The loss of the Thameslink contract has forced us to conduct a UK-wide review of our operations. This announcement today is part of an ongoing process.”
A consortium led by Bombardier had been competing with one led by Siemens of Germany for a contract to manufacture 1,200 new carriages as part of a £6bn upgrade of the Thameslink route, which runs from Bedford to Brighton through London.
Announcing the winner, Rail Minister Theresa Villiers said the bid by Siemens, which will build the new carriages in Germany, represented the “best value for money for taxpayers” and stressed that the contract would create up to 2,000 new UK jobs.
"The cuts will come as a massive blow to the Government which has campaigned heavily for "British jobs for British workers" and to David Cameron and George Osborne, who have pinned their hopes on a manufacturing-led recovery for Britain's flagging economy."
Read Business Correspondent Siobhan Kennedy on what this means for the economy
Bob Crow, general secretary of the RMT transport union, said: “It’s a scandal that the Government are colluding with the EU in a policy of industrial vandalism that would wipe out train building in the nation that gave the railways to the world.
“We will fight this stitch-up tooth and nail from the shopfloor to the benches of the House of Commons.
“German rail giant Deutsche Bahn awarded a £5bn fleet contract to German company Siemens and no-one batted an eyelid, but when it comes to British skilled manufacturing jobs getting support from this Government, all we get is a pack of excuses and they stand exposed as totally impotent in light of the Bombardier/Thameslink scandal.”
Len McCluskey, general secretary of the Unite union, said: “The situation at Bombardier has reached crisis point. The Government must now act swiftly and decisively to save Britain’s last train manufacturer.
“The dire consequences of the Government’s misguided decision to exclude Bombardier from the contract to build carriages for the Thameslink project is now becoming a reality.
“Unite will be working tirelessly to maximise voluntary redundancies and natural wastage and we expect the company to fully cooperate with us, but the solution lies with the Government.