ERA OF CHANGE The European rail industry is still dominated by Alstom, Bombardier and Siemens but the Asian competition is moving in. James Abbott, editor of Modern Railways magazine, reports.
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hat is to become of Alstom, one of the European ‘Big Three’ of railway manufacturing? Speculation was rife in the spring of 2014 after General Electric of the USA made an offer to buy Alstom’s power turbines and grid business for €12.35 billion. The cash-strapped firm welcomed the offer, which did not include Alstom’s Transport division, but the French government was not so keen on having such a major part of the French industrial establishment passing into American hands. The Hollande government was instead pressing for a European solution, in which arch-rival Siemens of Germany would take Alstom’s power business in a swap with some or all of Siemens’ rail assets – which would leave Alstom as a rail-focused company. Siemens initially expressed little enthusiasm for the idea. The early talk was of a deal in which Alstom would take Siemens’ high-speed train expertise and merge it with the French company’s famous Train à Grande Vitesse production. Suburban train and loco production would move too, but light rail and metro work would have stayed with Siemens under this scenario. As the month of May 2014 wore on the German company seemed to be warming to the idea of a deal with Alstom, and talk was of not only a part, but all Siemens’ rolling stock production assets transferring to Alstom, with a joint venture being set up for signalling equipment. Under this scenario the French govern8 Industry Europe
ment would, through a holding company, increase its stake in Alstom from under 1 per cent to around 10 per cent, giving it more say in future over the direction of the group. As Industry Europe closed for press the full details of any Siemens counter-offer to the GE bid (if indeed the German company eventually chose to make a formal bid) remained to be seen. But if the so-called European solution to the Alstom question is realised, it will radically alter the landscape of railway equipment manufacturing in the continent. For many years, Canadian firm Bombardier, whose railway equipment arm is headquartered in Berlin, has been the largest of the European ‘Big Three’. If three become two, the new Alstom will be larger than Bombardier. Alstom already owns an important manufacturing facility in Germany: the former LHB works at Salzgitter producing suburban trains. Adding the large Siemens plant at Krefeld to this would make the French company a major player on the German scene.
Asian influence In the 1990s Europe was top dog in the railway equipment manufacturing world, but in recent years the picture has changed. Urbanisation in Asia has made that continent the biggest market in the world for railway equipment, and now Chinese and Indian manufacturers are large players (Japan has long had a large railway equipment sector). But the Asian firms are still largely building for domestic con-
sumption and the European Big Three remain important players for railway equipment that is traded across borders. Joint ventures in China cement a presence for the Europeans and Japanese in the biggest market in the world by volume. The Asian and European railway equipment worlds are becoming further enmeshed. Japanese company Hitachi is building the first Asian-owned assembly plant in Europe, at Newton Aycliffe in County Durham in northeast England. This is being set up on the back of an order to manufacture 863 vehicles for inter-city trains for the Great Western and East Coast main lines in the UK. The Great Western and East Coast trains will keep Newton Aycliffe busy up until the end of the decade and the interesting question will be what happens then. Hitachi will no doubt be hoping that it can emulate the success of the nearby Sunderland car plant of fellow Japanese company Nissan, the most productive auto facility in Europe and a major exporter to the Continental mainland. Less positive is the example of the railway wagon manufacturing plant in York set up by the American company Thrall Car in the 1990s to address a requirement for freight vehicles in the UK, but which failed to gain further orders and closed once the specific requirement was met. The search is now on for additional work to supplement Newton Aycliffe’s initial order, but Hitachi recently missed out on 585 vehicles for trains for the new Crossrail suburban
