Bombardier to cut 1,000 UK jobs to keep Derby rail factory working

The Canadian train builder Bombardier will today announce about 1,000 UK job losses but throw a lifeline to its main manufacturing plant in Derby which had been under threat of closure.

The Canadian train builder Bombardier will today announce about 1,000 UK job losses but throw a lifeline to its main manufacturing plant in Derby which had been under threat of closure.

Bombardier has decided to give the Derby plant and its 2,300-strong workforce a reprieve by shipping work into the site to tide it over until a £3.4bn order from London Underground begins in 2008.

The decision means that Britain will continue to build trains for the foreseeable future. There had been fears that the Canadian company would follow the lead of Alstom, which ceases UK train manufacturing at the end of this year, by closing down the historic Derby plant. As one trade union official put it: "It would have been tragic if the country which invented railways no longer had an indigenous train building capability."

However, relief at the stay of execution for Derby will be tempered by the announcement of plant closures and job losses elsewhere in the UK. At least one and possibly more of Bombardier Transportation's nine UK sites is to close while others will be slimmed down, cutting its 5,600-strong workforce by about 20 per cent.

The cutbacks are part of a worldwide rationalisation programme that will see Bombardier close at least six of its 35 plants in Europe, with the UK and Germany bearing the brunt of the cutbacks. Across the group as a whole, about 7,000 jobs are expected to go from a workforce of 35,600.

The rationalisation is designed to tackle chronic under-utilisation of Bombardier's train building facilities, which are only working at 55 per cent of capacity. Apart from Derby, Bombardier's other big UK sites are Crewe, which specialises in overhaul and repairs and employs 1,100, Wakefield, where 400 are employed in refurbishment, and the Burton-on-Trent maintenance depot, which has a workforce of 440. There is also another manufacturing plant in Derby producing bogies, one in Doncaster and three other maintenance depots in Ashford in Kent, Ilford in Essex and East Ham in London. A further 300 workers are employed making signalling in Plymouth, Reading, Derby and York.

Work at the main Derby facility runs out at the end of the year when it completes £1.5bn worth of orders for 1,300 new Electrostar carriages for South Central and South Eastern. After that it has a gap until work begins on an order for 1,738 carriages for the Tube contractor Metronet in 2008.

The axe has been hanging over Derby for more than a year and as recently as last month, Bombardier's chief executive fuelled fears of complete closure by warning that at least six plants would have to close, including some in the UK and Germany.

Alstom will cease train building at its Washwood Heath plant in Birmingham when it completes an order for Pendolino tilting trains for Virgin Trains. It will keep the facility open in slimmed down form for repair and maintenance.

Union leaders expect to be briefed by the company today just before the Chancellor delivers his Budget in the House of Commons. Paul Reuter, the national officer of Amicus, said: "We suspect that this is an attempt by Bombardier to bury bad news for UK manufacturing on the day of the Budget."