Explaining Bombardier\’s loss of the train contract

Mr. Chakrabortty doesn\’t manage it.

To him it\’s all about the way in which the Derby train works are just a subsidiary of some Johnny Foreigner company.

Toss.

The contract was for a build and lease set of trains.

Siemens has a higher credit rating than Bombardier. Thus the lease part of the contract is cheaper for Siemens than it is for Bombardier.

One figure I\’ve seen is £750 million cheaper over the lifetime of the contract.

If the contract had been written (under Labour, please note) as a build, deliver and get paid one then the prices would have been much closer.

So, it\’s all a result of G. Brown liking to buy things on the never never.

Place the blame where it belongs, if you wouldn\’t mind.

5 thoughts on “Explaining Bombardier\’s loss of the train contract”

  1. And what a load of fuss about who builds what trainset. Why can’t the purchasers just buy what they want? You buy Siemens trains, the latest upgrade on the Frankfurt underground is from Bombardier. Everyone’s a winner!

  2. JamesV,

    While the Frankfurt underground trains were indeed built by Bombardier, they were built in a Bombardier factory in Germany. Because no-one else in Europe ever gives such orders to bids that use foreign factories, except us.

    While I’m sure Tim will pipe up this is a good thing, as exports are demonic and we should only ever import, I do struggle to see how I win from this. Sure as a taxpayer I save a bit on the trains, but I suspect the cost of all the unemployment benefit going to Derby (and indeed the lost taxes the train builders and workers would have paid but is now being paid to Berlin) probably outweighs this.

  3. Because no-one else in Europe ever gives such orders to bids that use foreign factories, except us.

    Utter bullshit. See: most rolling stock orders.

  4. Oh, the original post is also total bullshit. Bombardier bid for the Thameslink contract in a consortium with SMBC Leasing (part of a large Japanese bank). Bombardier’s own credit rating is completely irrelevant – SMBC would have done all the funding, with Bombardier solely building and maintaining the trains.

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