Hitachi chairman warns UK train factories will be at risk if HS2 north leg is not revived

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The chairman of Japan's Hitachi has warned that British train factories will be at risk unless the government revives the northern section of HS2 within a year or starts other vital infrastructure programs.

In an interview with the Financial Times, Toshiaki Higashihara said the 750 jobs at the Newton Aycliffe site, near Durham, could not be guaranteed unless demand increased.

if [the northern leg] He said continued cancellations would reduce Newton Aycliffe's workload, raising the question of how much to think about staffing.

Higashihara added that it would be problematic if the Labor government did not review the plan within a year. It cited falling demand and long-term uncertainty about demand ahead of Hitachi starting construction of the HS2 section 1 trains next year. .

Former Chancellor Rishi Sunak canceled the Birmingham-Manchester section of HS2 a year ago over cost concerns, sparking protests among local leaders and businesses, who warned the extension was vital for economic growth.

The opposition Labor Party has ruled out reviving the project, a position it has maintained since winning the general election in July. But senior officials confirmed last October that ministers would launch a feasibility study into a new alternative non-fast rail line north of Birmingham.

Hitachi, a Japanese-headquartered conglomerate that employs 6,000 people in the UK, was one of the companies most likely to benefit from the ambitious high-speed rail project.

The group's joint venture with French manufacturer Alstom has orders for 54 trains for the first stage of HS2, which were not affected by the cancellation of the extension.

Future orders for the second leg of HS2 will likely take place within a few years, according to people with knowledge of the timing.

Prime Minister Keir Starmer said on Friday that First Group's new order for 500 million 70-car trains would help secure the future of the Newton Aycliffe factory and eliminate worker anxiety.

But while the order, which is not backed by government funding, will give the plant a significant boost, it will not be enough to fully close the production gap, people familiar with the industry said.

Higashihara added that he had met Starmer to discuss HS2 and believed the project could be revived under Labor.

For Labour, he said a return to the original plan would be better for the UK's development as it was linked to economic development and regional revitalization.

We want to support Newton Aycliffe's workforce at the highest level, but there may come a time when we have to think about that depending on the workload, he added.

Higashihara said the company was also discussing alternative plans with the government, including a deal to replace the train's diesel engines with batteries, to see if Newton Aycliffe's workload could be adjusted.

The UK rail industry is facing headwinds due to a policy U-turn, rising costs and a lack of new orders from cash-strapped UK transport operators.

The Newton Aycliffe factory opened in 2015 as a result of the UK government's decision to upgrade train carriages on the East Coast main line and Great Western line. The area suffered high unemployment following the closure of Teesside Steelworks.

In December 2023, Hitachi listed the value of the plant at $64.8 million, sparking speculation that the plant could be closing.

The Department for Transport said: We are committed to driving infrastructure and growth across the country with today’s announcement that Hitachi will invest $500 million to help secure Newton Aycliffe’s future.

The government has inherited a very difficult financial situation but remains committed to delivering HS2 from Euston to Birmingham, rather than the northern section, where Hitachi and Alstom are contracted.

Additional reporting by Jennifer Williams and Jim Pickard

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