- New c£8.5m investment in train welding and painting, enabling a greater scope of work to be carried out at UK plant
- Post-Intercity Express Programme manufacturing phase will see transition to core workforce model for greater flexibility, agility and global competitiveness
- Changes entirely unrelated to Brexit
Preparing for the next phase of manufacturing
Hitachi Rail’s factory at Newton Aycliffe, Co. Durham, which opened in 2015, will this year complete one of the UK’s largest train manufacturing orders of recent times – the £5.7bn, government-backed Inter City Express Programme (IEP). As the final train for the East Coast Mainline fleet will be delivered in the coming months, preparations are beginning for the next phase of manufacturing at Newton Aycliffe. The factory is embarking today on the transition to a new core workforce model, including a 45-day consultation process with employees at the factory.
Additionally, Hitachi Rail will make its single largest investment, of around £8.5m, since the factory was built to introduce brand new manufacturing capabilities which will benefit its customers.
Critically, these changes will put Hitachi Rail’s successful UK operation on a long-term, sustainable footing. By making its UK factory more flexible, agile and globally competitive, these changes will enable Hitachi to continue to win new train orders. They will also ensure the continuation of high-quality jobs and the investment in a British supply chain, in which over £1.6bn has been spent since 2013.
£8.5m investment in welding and painting
As part of the changes being made at the factory, Hitachi Rail is investing for the future. Around £8.5m will be spent on creating new carriage welding and painting facilities, taking Hitachi’s total investment in the factory in the past five years to around £110m. The increase in capability will be significant, allowing Newton Aycliffe to become a full-scope manufacturing facility, from welding panels through to building fully rail-ready trains.
With new welding and painting facilities, similar to those at Hitachi sister factories in Japan and Italy, Newton Aycliffe will be even better placed to compete globally. The investment means it can deliver from start to finish a wider range of products, from trams and metros to commuter and high-speed trains, as well as multiple projects at the same time.
Around 40 existing staff are being trained in welding or painting as part of a significant upskilling programme. The factory layout will be redesigned within the footprint of the existing buildings, with the new on-site facilities expected to be completed in autumn 2020.
Move to core workforce model
As the last of the 122 IEP trains nears completion, Newton Aycliffe’s workforce will be resized to a team of skilled, core full-time employees. This will allow key train building projects to be delivered, but also provides the flexibility to be scaled-up with staff on fixed-term contracts according to order demand.
This will ensure Hitachi is able to deliver its existing order book on time, as well as be ready to work on new manufacturing contracts. Currently, Newton Aycliffe has orders that include 61 new intercity trains for East Coast Open Access, East Midlands Railways and Avanti West Coast, with the first work due to begin in the second half of 2020.
As part of this process, today we begin a 45-day consultation with employees at the factory, as well as the union Unite, about reducing the number of permanent staff. While this could see up to 250 employees leave the company, there may be opportunities for a number of staff to be redeployed to other parts of Hitachi’s rail business.
Hitachi has a proud record investing in developing and training its people. While it is disappointing to be reducing jobs at Newton Aycliffe, if demand increases in the future there may be opportunities for rehiring.
Long-term commitment to the UK unaffected by Brexit
These changes to the factory workforce do not call into question Hitachi Rail’s long-term commitment to the UK and are entirely unrelated to Brexit.
Hitachi Rail’s presence in the UK is now strongly established. Operations include an extensive service and maintenance division, anchored around a 27.5 year contract for IEP, and further contracts which support our fleets in passenger service the length and breadth of the country. The UK also delivers signalling, traffic management and digital services, and is home to Hitachi Rail’s global headquarters, which oversees the activities of 14,000 employees in 33 countries.
Ross Nagle, COO Manufacturing, Hitachi Rail said:
“We’re proud to be investing £8.5m in new train welding and painting capabilities at Newton Aycliffe, making the factory more competitive and sustainable. It will allow us to complete the full scope of train manufacturing for our customers across a wider range of products, making us one of the most advanced train building factories in the UK.
“New train fleets built by employees at Newton Aycliffe over the last four years are helping to transform Britain’s railway, of which we couldn’t be more proud. However, the cyclical nature of demand in the industry means the factory must be more flexible and agile to secure a long-term, sustainable future.”