French rail manufacturer Alstom has announced it will be significantly reducing activity at its factory in Derby, UK, putting more than 1,300 jobs at risk.
According to the company, the decision is due to a lack of upcoming orders.
The announcement comes after months of speculation around cuts at the Litchurch Lane site as the manufacturer worked with the UK Government in an attempt to bring forward future contracts to fill a gap in production work after Q1 2024.
An Alstom spokesperson said: “No committed way forward has yet been found and therefore, it is with deep regret that we must now begin to plan for a significant reduction in activity at Derby by entering a period of collective consultation on potential redundancies at Litchurch Lane.
“We will fully support our dedicated colleagues during this exceptionally difficult time. The UK remains one of Alstom’s most important global markets and we will continue to operate 36 sites throughout the country across our rolling stock, services and digital and integrated systems businesses.”
Potential redundancies announced by Alstom could see up to 550 permanent employees and 780 temporary staff at risk of losing their jobs, with trade union Unite the Union (Unite) also saying that another 900 jobs in the Alstom supply chain could be at risk as a result.
The union, which has previously said it has been in discussion with the manufacturer for months on the challenges faced by the company, blamed the possible job losses on the UK Government’s delay of HS2 contracts, which have been pushed back to 2026 and its “failure” to bring forward other refurbishment works planned in the South East and South West.
Unite General Secretary Sharon Graham said: “There is absolutely no justification for the proposed job losses. It is madness that there is a huge amount of work that Alstom could and should be bidding for but the government has not got around to tendering for it.
“The government and Alstom should both be bending over backwards to keep hold of these highly skilled workers and this strategically vital and unique site. Unite will leave no stone unturned in its campaign to secure these jobs.”
Additionally, the union called for the creation of a task force to develop a solution to prevent job losses with the involvement of the government, Alstom, Unite, and the local council.
However, while no specific task force has been created, Derby City Council leader Councillor Baggy Shanker said the council had been in discussions with Alstom, Unite and government officials on the issue but said that he was disappointed by the lack of communication from the cabinet.
Confirming that Alstom had informed the council of its “plan to end production of rolling stock” in Derby, Shanker said: “Ministers really need to commit and focus on this vital industrial sector. To date, I’m disappointed that no minister has agreed to speak to us on this matter.
“The rail sector is immensely important to the city and was recognised earlier this year with Derby being named the home for the new Great British Railways headquarters. We stand with Alstom and their workers during this disappointing time and continue to support wherever we can.”
Following Alstom’s preliminary H1 2023 financial results in October, shares plummeted in the company by at least 35%, representing the manufacturer’s greatest share drop in more than 20 years.