U.K. hands Bombardier rail division $2.3-billion Brexit jobs boost

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The acquisition unites two of Europe’s three big trainmakers and could endanger some sites as the coronavirus crisis weakens economies and dents demand for public transport. It is due to conclude on Jan. 29, according to the French company, which shut down its last U.K. train factory in 2004.

Derby’s position as a prime manufacturing centre is also at risk amid job cuts at aero-engine maker Rolls-Royce Holdings Plc and question marks over production at Toyota Motor Corp.’s plant there following the split from the European Union.

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Under the Bombardier deal, UKEF is guaranteeing 80 per cent of borrowing totalling 2.5 billion euros from lenders led by JPMorgan Chase & Co. Robert Maccabe, a spokesman for the agency, said export credit is the norm for such projects and that the company wouldn’t have been able to tap such funding privately.

He said terms of the deal require a specified level of British content in the trains. As well as boosting employment at Litchurch Lane, it’s also regarded as attractive in giving the U.K. Bombardier’s only European monorail capability.

The Derby plant expects to build 1,000 rail-cars this year and has work to see it through 2022, excluding the monorail contract, spokesman Will Tanner said. Since Alstom’s exit, Japan’s Hitachi Ltd. has established an assembly line in northern England, while Siemens AG is developing a plant to supply London’s subway and aid its bid to produce trains for the High Speed 2 line.

Bloomberg.com

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