Thursday 12 February 2009

The real story behind "12,500" jobs

Today's announcement that a contract to build super trains would "create or secure 12,500" UK jobs is at best botched, and at worst cynical.

The very fact that they put "create or secure" in front of the number immediately rang alarm bells in my head.

After speaking to Agility Trains chief exec Alistair Dormer, Lord Adonis and Geoff Hoon this is what I've sussed out.

There will be 200 to 500 definite jobs at a factory to be opened in the UK by Hitachi.

Supposedly there will be a further 2,000 definite jobs.

But there is only an absolute guarantee of 1,300 of those – as positions to maintain the train cars – being UK based.

Transport Minister Lord Adonis said he couldn’t yet say where these 1,300 or the remaining 700 of the 2,000 – at other UK depots and in the supply chain – would be spread.

Hoon admitted the remaining “10,000” jobs – made up of new positions in the national supply chain brought about by the contract and existing ones “secured” – was merely an “estimate”.

Here is the killer – the estimate was in part put forward by Agility as part of its bid to win the contract. Of course the firm would paint its bid in a positive light.

The real job numbers will depend on how much Hitachi, which has an already established global supply chain, eventually relies on the UK supply chain.

But it has no legal obligation to use any British suppliers – in fact it would be illegal under EU law for Hitachi to specify suppliers at this point.

If the Department for Transport had said “this will create 500 UK jobs” in the first instance, that would be something close to a solid story.

But by throwing this purely speculative 12,500 figure out there, they undermine any good news there is at the root of it.


an ex-apprentice said...

They can throw whatever figures they like out, the idea that anybody, anybody at all, still believes a word they say serves only to demonstrate the true, ignominious depths of their arrogance, ignorance and complete stupidity.

And PLEASE, Lobbydog, no more pictures of a smirking Hoon. You nearly cost me a monitor.

Events dear boy, events said...


Dale posted about this and I recently left a comment:

Apart from price, Hitachi have a much superior technical product and this was the main reason they won.

I understand that the trains will be manufactured in Japan but assembled in the UK, which is what the new manufacturing plant is for. The Depots are for maintenance only.

This is very important strategic win for Hitachi as they hope to expand into Europe. If they do then future orders will be manufactured in the UK, but not this one.

The other point is at present there is no firm commitment for 1400 carriage. The initial firm order is for 400-500. The issue is finance, which delayed the announcement.

I do not have exact figure on jobs but will come back to you when I do.

I hope this helps.

FYI, I used to work in the rail industry.

LobbyDog: I can't check the job figures until Friday but you are on the right path. I will come back to you when I do.

Oldrightie said...

My research suggests it's all money loaned to Brown by The UAE last November. I dread to think what else he may have sold to bail out Labour and keep The IMF at arms length! See my place for a bit more!

IanPJ said...

I think that the real question should be:

When we have our railways serviced by private operating companies, why is the overburdened taxpayer being forced to pay a further £7.5bn for new rolling stock.

Lobbydog said...

It's true that Hitachi are touting this as a "springboard" to get into Europe. But there are three points to consider here.

1) The European market for rail companies is far from open, with Britain being fairly lonely in giving foreign companies a fair run.

2) Hoon told me he "hopes" that the initial high tech welding (which will have to be done in Japan) will eventually be done here, but would not guarantee it and noted it was a long way away.

3) DfT officials admitted to me that it is "easier" to close a factory which merely assembles trains rather than close one that builds them from scratch. Remember Alstom's B'ham Pendolino facility - initial welding for those trains was done in Italy and then they were fitted out here. But when things got tight the factory was mothballed.

All of this suggests that Hitachi has the option to withdraw once the contract finishes, I just hope the DfT have more than a verbal assurance that they won't.

cheers for your post, have you ever read the Christian Wolmer blog? It's all about rail stuff and written by an in-the-know trains guy too. There's a link on the right.

sorry. You should see some of the other pictures I have in my collection, including one of Mandelson in his pants which I'm saving for a special occasion.

Events dear boy, events said...


I have posted on my blog this morning and attempted to flush out the issues. You may find this useful. I do read Woolmar but as yet he has not posted on this.

Key bored warrior. said...

Looking at the picture of the smug self regarding supercillious Hoon just fills me with utter revulsion.

Like Ingram and Brown with an e, these teflon coated greedy pigs have blood on their hands with the lives of the service personnel who have dies because of their lies and incompetence. Damn them all to hell.

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