Douglas Gadd, chairman of the UK arm of GEC Alsthom, said there had been a 'complete hiatus' in ordering by BR in addition to a low level of orders from London Underground because of Treasury constraints.
The group announced that there would be a net loss of 450 jobs at its Preston and Trafford Park, Manchester, sites, involving both the Traction and Power Plants groups.
The Power Plants group, a consultancy, will be moved to Rugby, where power-generation equipment is manufactured. In the process 100 of the 280 staff will be made redundant.
The Traction group will shift 260 of its Trafford Park employees to Preston, and will make another 220 redundant. In addition, there will be 130 job losses at Preston. The net effect will be to halve the Trafford Park workforce to 750, and to increase the Preston site by 130 to 1,000.
Both sites will share in pounds 10m of capital investment, designed to improve their chances of winning export orders. The company is still working on engines for the Eurostar Channel tunnel train engines, and has recently won an order for the Seoul metro. But, Mr Gadd, said, 'the rail business is extremely tough at the moment, and prices are very keen.'
Meanwhile, GEC-Marconi yesterday confirmed that it is to buy two of Ferranti's divisions from the receivers. The price is believed to be about pounds 50m. At the end of March Arthur Andersen said GEC was the preferred bidder for Ferranti Defence Systems Integration and Ferranti Simulation and Training, which employ 1,100 people at six sites.