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Why Bombardier’s bid for Crossrail means so much to Litchurch Lane

Winning the £1bn carriage contract is vital for the future of Derby’s historic works – but there is little room for sentiment in the procurement process

The Bombardier train factory in Derby is an unlikely symbol of Britain’s manufacturing revival. The blackened brickwork of its 172-year-old worksheds is a symbol of the area’s proud rail heritage, while the Canadian flag outside its entrance signifies that, like other major UK manufacturers, it is under foreign ownership.

On the other side of the tracks by the city’s main station, there is a depressing glimpse of the future. Bright signs for hotels, software companies and car dealerships cut through the drizzle, filling the space where steam engines were once made at the defunct locomotive works.

The government is finalising tender documents for a £1bn contract to build carriages for the Crossrail project. Winning that contract will be critical to keeping Britain’s last remaining train factory open and the competition is expected to begin imminently. If Bombardier loses the race – as it did last year, when a £1.4bn government contract for trains on the London Thameslink route saw preferred bidder status awarded to Siemens of Germany – the Derby site is unlikely to survive beyond the middle of the decade.

Before a visit by Prince Charles to the site on Friday, Bombardier employees talked of the site’s legacy. Pride and history is felt as keenly as the short-term need for jobs here. Kevin Owen, 41, a team leader at the plant and a prominent online campaigner for its survival, is among the 1,600 surviving employees who despaired at the loss of the Thameslink deal. He has seen 1,200 colleagues leave in the wake of that decision and, through his Made in Britain blog, is urging ministers to give Derby the order to build 60 trains for the £16bn Crossrail link.

“When we got the Olympics there was all this talk of legacy,” says Owen, walking towards the site where he began his professional life as an apprentice in 1987. “I believe that leaving this site and this company stronger than I found it would be leaving a legacy for the next generation.

“And that’s what the government should do. They should not come in to power and shut an industry, they should fight tooth and nail for this.”

The works in Litchurch Lane are still busy. The historic buildings house modern assembly lines. A newly constructed London Underground train, its white, red and blue colour scheme standing out in the murk, sits between two worksheds. Outside the gates, an old carriage is transported to a scrapyard, illustrating the replacement cycle on Britain’s crowded commuter lines that feeds Bombardier’s business.

That circle, however, is on the verge of breaking. The London Underground order finishes in 2015, a deal for carriages on the Southern route will run out in 2013 and a mooted contract to build 35 carriages for the CrossCountry franchise has yet to be signed. This month, the Canadian group’s transport boss, André Navarri, said that such a hand-to-mouth existence was not good enough. Crossrail is vital. “The small orders cannot make a UK presence competitive,” he said.

Industry analysts say that if the UK is to tilt its economy away from financial services and boost manufacturing’s share of GDP beyond the 10% it accounts for already, then facilities like Litchurch Lane must survive.

The secretary of Bombardier’s works committee, John Woods, 60, is proud of the campaign that launched last summer after the implications of the Thameslink decision became clear. A rally in Derby drew 10,000 people and a media furore over the latest blow to British manufacturing contributed to the Southern success, as well as heavy ministerial hints that a CrossCountry deal was looming.

“I like to think that [campaign] is what won the Southern order,” says Woods, a member of the Unite trade union. His colleague Graeme Steeples, 51, says the focus now is “making sure we get Crossrail”.

Neither employee is willing to concede that Thameslink is entirely lost, because Siemens has yet to sign the contract and Bombardier remains reserve bidder. But a reversal is highly unlikely. Indeed, scrutiny of the reams of documents that underpinned the Thameslink process underlines why Bombardier was always going to struggle.

Papers unearthed by Derby North MP Chris Williamson following a freedom of information request reveal a rigorous and competent procurement process launched by the then Labour government in 2007 and 2008. It was painstakingly put together in an exemplar of labyrinthine bureaucracy. Amid minutes for meeting after meeting and endless tweaks to contract specifications, phrases such as “sub-optimal”, “public private partnership” and “value” abound.

There are no references to the “equal footing” that the government is now scrambling to guarantee for the Crossrail contract. It is an environment stripped of all notion of domestic bias by European Union procurement rules, and not a world in which pleas to preserve nearly two centuries of domestic manufacturing will thrive.

David Faircloth, 65, a former train buyer for British Rail who also worked in procurement for Bombardier, says the decision to change the procurement method by combining the financing of the trains with their manufacture was crucial in Siemens winning preferred bidder status. Many observers say that financing, and Siemens’s superior balance sheet, was the crucial factor.

“It is clear that they did not consider the effect that bundling would have. It just was not on the horizon at all,” says Faircloth, referring to the planning documents.

Williamson says that the Crossrail competition must take a different approach: “These papers expose an alien culture in the Department for Transport, where officials are so obsessed by bureaucracy that they’ve forgotten what is in the national interest.”

However, EU regulations prohibit member states from showing domestic bias in selecting the winners of government-funded contracts. The other bidders for Crossrail are Spain’s CAF, Japan’s Hitachi and Siemens, all of whom would have recourse to legal action if they suspected a rigged contest.

Non-UK manufacturers also bridle at the notion of bias on the continent, pointing out that the recent Eurostar procurement, which went to Siemens, proved that French businesses are not duty-bound to pick home-built Alstom vehicles.

It is understood that the Crossrail tender document, which stipulates the type of vehicle the government is seeking and the structure of the deal, will be significantly different from the Thameslink effort. But it will not have a “buy UK” clause, which still gives a strong chance to other contestants when the winner is announced in 2014.

A former Department for Transport employee says the current transport secretary will struggle to politicise the Crossrail process. “Many civil servants view British industry and jobs as political side issues that get in the way of procurement. Senior DfT civil servants and rail officials tend to keep ministers and the [business] department at arm’s length during procurement decisions, stating that EU legislation demands no political interference.”

The next generation of Bombardier workers is hoping that British industry has a stronger chance in the Crossrail contest than it did in Thameslink. Kieran Pallett, 20, who is more than two years into his apprenticeship, says during his lunch break that he hopes Prince Charles’s royal visit on Friday will “give us a good image” and help secure his future. “I want to progress myself as far as I can here. They support you really well at Bombardier.”

But it is Bombardier, and UK industry, that needs support too and there is only so much the government can do. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds