Train builder Alstom has warned that the two-year hiatus before a new West Coast franchise is let could lead to the loss of around 500 jobs across the rail industry.
Scrapping the franchise contest means that there is now no contract for interior refits, all franchise bidders had identified £50 million needed to carry out this work, meaning that not only may interiors become tired looking but skilled craftsmen will have to be laid off.
Included in the 500 are 40 top-class engineers, who have just completed the Pendolino overhauls, who will have to go because there is no work to bridge the gap between now and the next West Coast franchise being let.
Alstom have said the cost of re-starting teams and developing new product further down the line will cost in the region of £20-30 million, pointing out that £3 million has already been spent on design and pre-engineering work for Baby Pendolinos.
The company believes that a large part of the project to refresh the fleet could be progressed separately from the refranchising process.
If the letting of the West Coast franchise had gone ahead as planned Alstom had expected substantial orders for new Pendolinos in addition to any refurbishment work on the existing fleet. This would, according to Alstom, have allowed them to retain and develop over 820 current staff and create over 150 new jobs.
These financial figures need to be questioned.
Let’s say that Alstom will need £25 million to put in place a plan and a team once the future work is specified. Assume this is two years away. Let’s also assume that half of the at risk jobs mentioned above are at Alstom (probably an overestimation).
This puts a cost of £100,000 per position at risk. Surely cheaper to keep the team together than disband, especially as severance pay has not been quantified in the figures.
I would expect better from Alstom’s PR company.