Importing: Is It Really A Benefit?

On 5th July 2011, the news broke that continental rolling stock manufacturing giant Bombardier Transportation would be forced to shed up to 1400 jobs at their assembly plant at the former British Rail Engineering Limited (BREL) plant in Derby in the UK. Derby has been a major centre of railway locomotive and carriage production since 1840, when it was first set up by the North Midland, Midland Counties and Birmingham and Derby railway companies, which post 1844 grouping became part of the Midland Railway, and later still in 1923 became part of the London, Midland and Scottish Railway (LMS). It lasted at the same site into the British Rail years, producing Standard Class 4 tank engines and Standard Class 5 tender engines, and then into the diesel era producing members of the Class 24 and 25, and also all of the Class 44, 45 and 46. After this, production largely moved to Crewe, however Derby remained a place of rolling stock maintenance and testing as well as infrastructure maintenance based at the Railway Technical Centre, or Derby RTC, now the base of Network Rail's test train fleet. Carriages and wagons were produced at Derby from 1873 under the Midland Railway, LMS and BR at the Derby Carriage And Wagon works just off Litchurch Lane in Derby. Production of rolling stock later fell under BREL in 1969, and BREL lasted until the privatisation of rolling stock production in 1989, when BREL was purchased by ABB, later Adtranz. During the privatisation of BR in 1999, a disastrous hiatus of rolling stock production ensued, in which every UK based Adtranz plant but Derby closed, Derby now remaining as the only major production site for rolling stock in the UK itself. Adtranz was later purchased by Bombardier, who kept the plant at Derby open to assemble Bombardier products for the UK network such as the Class 378 "Capitalstar" and the Class 377 "Electrostar".

The problem behind the loss of jobs at Derby is due to a recent decision by the DfT regarding new rolling stock for the Thameslink programme. Thameslink is currently under a complete modernisation and upgrade programme including refurbished stations and new EMUs, as well as the introduction of ATO on the main tunnel section to allow for a more intense service rate of up to 24 trains per hour through the core section. The contract tender for the new trains was eventually granted to Siemens, who also built the Desiro UK family encompassing the Classes 444, 450, 350 and 185, despite the fact that Bombardier built the Class 170, 171, 172, 376, 377 and 378 of the Turbostar DMU and Electrostar EMU family. Which leads me to the question, is it really better to import?

The answer I'm afraid, isn't quite as simple as it sounds. Importation of products from overseas means less of a cost to the British consumer due to the reduced cost of building locos/units in foreign countries, (ie: America, Germany, Italy), put together with the shipping cost of the finished products to the UK. This benefits the organisation/s that ordered the new stock by keeping their potential outlay down and their profits up. However when the stock is built outside of the UK British jobs are at a loss, and in times of economical stringency and expenditure austerity jobs happen to be in high demand. It's a vice versa if the stock is built "at home", with parts being shipped from other countries and often other suppliers that the chief manufacturer must purchase parts from to produce the finished machines. This increases shipping cost and labour cost for the manufacturer and pushes up the potential list price for the rolling stock ordered, therefore meaning a higher cost to the organisation who ordered it, and less profit as a result. It would also do the same thing to jobs with companies in other countries that could have built the products themselves, Bombardier is Canadian and has plants in Germany also, whilst Siemens is a German company that has no plants in the UK. In this case, cost vs. potential profit margins won the day, due to the fact the DfT is a government run organisation in charge of the management of transportation across the British Isles, and the current coalition government is dominantly Conservative who cut costs wherever and whenever they can, so the cheaper option was the only option to them.

My opinion on this is, yes it is cheaper to build outside the UK and import, but building inside the UK reaps bigger rewards. Yes you pay a higher price, but by paying a higher price you are also safeguarding the livelihood of thousands of people, not just the company employees, but their immediate families also. Plus the local economy in the UK is significantly weaker than that of Germany, and that could be seen as a paramount factor in deciding who builds the new products and where they build them. Had I been at the helm of the deciding panel for the new Thameslink trains, I would have chosen Bombardier, and also asked "Could you make them look a bit like this please?"