Japanese engineering giant Hitachi is to move its rail division’s headquarters to Britain, closer to its factory at Newton Aycliffe in County Durham, which is currently being constructed. They have said that they hope the move will help it to expand the rail business to 4,000 workers from the current 2,500 and increase revenue from 2 billion to 3 billion euros.
Alistair Dormer, chief executive of the global rail systems business said, “Today’s announcement is a significant sign of intent by Hitachi to grow its business in the rail market. Both the UK and Japan remain important as markets for Hitachi Rail, and with our train factory in the north-east of England now under construction, we will work to realise our export potential from the UK, expanding into Europe and emergent markets.”
Hitachi manufactures everything from nuclear power plants to construction machinery to televisions; its rail division is relatively small, employing around 2,500 of Hitachi’s 326,000 workers.
Hitachi Rail said about the move “The management team will boost the growth of the business in the UK and Europe and will oversee the rapid capability expansion through establishing a manufacturing base in the UK and nationwide maintenance facilities to support the Class 800 series trains and anticipated new orders.”
Hitachi Rail Europe is currently contracted to provide new rolling stock for the £5.8billion Intercity Express Program. The Department for Transport is procuring them to replace the Intercity 125 and 225 fleets on the East Coast and Great Western Main Lines with electric and ‘bi-mode’ trains.
Geographically, the move also places Hitachi closer to its other European rivals, which would help it when it comes to bidding for work in the rest of Europe.
Britain’s train-making industry has declined in recent years as manufacturers sought out cheaper options overseas. In 2011 the Government came under fire for awarding a £6billion Thameslink contract to German-owned Siemens rather than Bombardier, which at the time ran the UK’s last train factory in Derby.
Transport Secretary Patrick McLoughlin, talking about the relocation said, “This is an incredible vote of confidence in a growing Britain that is exporting more and making great things once again. It’s great that the company that built the first bullet train putting its HQ here to sell abroad, alongside a new factory and new jobs in northern England. This is just the sort of growth we want to see more of as we invest in rail and build HS2.”
Hitachi Rail Global is also targeting lucrative rail contracts, including bidding for work on the controversial £50billion High Speed 2 (HS2) project.
HS2 will link 8 of Britain’s 10 largest cities, serving 1 in 5 of the UK population. It will allow more passengers to use trains and more freight operators to use rail rather than road. The new railway will greatly increase capacity and it will treble the number of seats on trains into Euston and whilst almost doubling the number of trains per hour on the West Coast Main Line. Construction along the line is due to start in 2017 and will be completed by 2025. The first train services will run between London and Birmingham from 2026. The improvement will free up capacity on existing rail lines for more commuter, rural and freight train services, and mean fewer cars and lorries on our roads, cutting congestion and carbon emissions.
A Department for Transport source said: “The current speed in which the train service travels between London, Birmingham, Leeds and Manchester is to a decent standard. However, bringing faster services and many more seats to towns and cities is very important. It would work just like a motorway. Only some people use a motorway to get all the way from their front door to their final destination, nevertheless they use it because it offers high capacity and faster services, precisely what HS2 will offer rail passengers.”
What help could be given to other areas of public transport so they could improve – for example, subsidies?