Alstom buys Bombardier Transportation

[Meerkat]

Indeed. CRRC is already selling trains to European operators (Leo Express, Deutsche Bahn...) so we should take this opportunity to strengthen the European railway industry, as in any case Bombardier Transportation will disappear. We’re risking to lose ground in front of the Chinese even more if the EU blocks this buyout which could enable the European rolling stock industry to benefit from a serious kick in the butt which could enable us to be more solid in front of Chinese competition. I think it’s preferable that a European company buys Bombardier for 7 billion euros while it’s still time, because the company needs a buyer anyway. If the next candidate is Chinese, it will be able to put much more than 7 billion on the table, which will complicate the situation even more. Unless the EU blocks this too.

In any case, Bombardier Transportation will disappear so we may as well make the most of the situation by reinforcing the European railway arsenal at the same time.

Does it matter if the trains are French or Chinese if they aren’t built here?
If we want to protect our factories we have to use tariffs or “must be built here” clauses in the bidding

 

[fgwrich]

Sounds like a deal could be very very close now, with Bombardier agreeing to the sale. In return, Caisse de dépôt et placement du Québec (One of Bombardiers shareholders) will then take a 30% share in Alstom.

https://www.cnbc.com/2020/02/17/bom...l-unit-to-alstom-in-8point2-billion-deal.html

Canada’s Bombardier said on Monday it had agreed to sell its rail division to France’s Alstom for an enterprise value of $8.2 billion, as it focuses more attention on its aviation business and pays down debt.

That price tag includes equity plus debt. The deal will be done mostly in cash, with a chunk paid in new Alstom shares, Bombardier and Alstom confirmed in separate statements.

Bombardier said it would be receiving net proceeds of between $4.2 and $4.5 billion, once it accounts for the portion that will go to Canadian pension fund manager Caisse de dépôt et placement du Québec, a 30% shareholder in the rail unit.

Caisse will become the biggest shareholder in Alstom following the deal, which is expected to close in the first half of 2021, Bombardier added.

The memorandum of understanding between Bombardier and Alstom was approved by both companies’ boards.

 

[TRAX]

https://www.alstom.com/sites/alstom...quisition_of_Bombardier_Transportation_EN.pdf

Alstom press release: a memorandum of understanding has been signed between Alstom, Bombardier, and the CDPQ.

 

[LNW-GW Joint]

Does it matter if the trains are French or Chinese if they aren’t built here?
If we want to protect our factories we have to use tariffs or “must be built here” clauses in the bidding

That does not work either.
Most major components are designed abroad wherever they are assembled, even for Derby.
Hitachi have a diagram showing which bits of the 800 series are made/sourced in Britain.
All the big high-value stuff is Japanese (occasionally German).

 

[LNW-GW Joint]

https://www.alstom.com/sites/alstom...quisition_of_Bombardier_Transportation_EN.pdf
Alstom press release: a memorandum of understanding has been signed between Alstom, Bombardier, and the CDPQ.

So - GEC finally buys BREL (parochially).
The MoU is very optimistic.
I spotted the words "consolidation" and "synergy" but it does not look like a asset-strip, more a pooling of expertise.
Merger to be completed in about a year's time, assuming regulatory approval.

 

[Gag Halfrunt]

Alstom are taking care to keep Quebec interests happy. CDPQ, which owns 32.5% of Bombardier Transportation, will get an 18% stake in Alstom. Alstom also promise to make Montreal the "Alstom of the Americas" headquarters and develop new R&D facilities in Quebec.

 

[duesselmartin]

Does it matter if the trains are French or Chinese if they aren’t built here?
If we want to protect our factories we have to use tariffs or “must be built here” clauses in the bidding

Yes it does, besides European components and design ( the latter being very important) is an increasing dependancy on a country that a) is not or ally and b) does not open its market for US unless technology transfer takes place.
The latter means that we will become economically irrelevant even beyond railways.

 

[Meerkat]

Yes it does, besides European components and design ( the latter being very important) is an increasing dependancy on a country that a) is not or ally and b) does not open its market for US unless technology transfer takes place.
The latter means that we will become economically irrelevant even beyond railways.

I am not really seeing how that is worse for us than having European super companies that are more likely to withdraw all assembly from here, especially as it’s harder for our smaller companies to compete with imports from over the channel than those the other side of the world.

 

[Roger B]

I am not really seeing how that is worse for us than having European super companies that are more likely to withdraw all assembly from here, especially as it’s harder for our smaller companies to compete with imports from over the channel than those the other side of the world.

Ask the people of Hong Kong, or the Uighurs.

 

[duesselmartin]

I am not really seeing how that is worse for us than having European super companies that are more likely to withdraw all assembly from here, especially as it’s harder for our smaller companies to compete with imports from over the channel than those the other side of the world.

Because we are doing it in all sectors. Let the Chinese build HS2, the UK construction sector will be killed off. Buy Chinese cars, UK construction of such will go, so will developement of autonomous technology that is taking place in Oxfordshire for example.
English Electric went and Siemens stayed because those making descisions were complacent.
I am sorry to hear that you have obviously given up in your country.

 

[duesselmartin]

Ask the people of Hong Kong, or the Uighurs.

I fear human rights wont be a consideration but competion will.
The Chinese already have a stake in the rail division of Skoda and they will enter directly.
The new LRT trains for Porto will be build by a chinese consortium, and if the quality is right, Siemens ect will loose market shares.

 

[Meerkat]

Don’t get me wrong, I think we should be boycotting Chinese goods - their regime is truly terrifying.
But I think the “must make Euro monopoly so we can compete” is big business taking advantage.
They will dominate, drive out all Euro competition, drive out small suppliers, move all production to Slovakia, become inefficient, then start lobbying for EU funds and protection as otherwise we lose the only European competitor.
Concentrate on keeping out the Chinese with soft and hard trade barriers and let the Europeans compete.

 

[rdlover777]

It's happening https://www.derbytelegraph.co.uk/news/business/french-firm-alstom-agrees-buy-3859278

The parent company of Bombardier Transportation, which has its UK factory in Derby, has agreed to sell the business to rival trainmaker Alstom for just over $8 billion. Bombardier Inc has signed a memorandum of understanding with the French firm to sell its rail business for the equivalent of £6.16 billion as it looks to reduce its huge debts and focus on the business jet market. The firm said the deal is expected to be completed during the first half of 2021, reports Business Live.

Headquartered in Berlin, Bombardier Transportation’s UK train-making factory is in Litchurch Lane, Derby. The site is currently busy delivering several major orders to key customers, including West Midlands Trains, Greater Anglia and Southern Railway.

The full implications of the sale on Bombardier’s Derby factory are not yet known - but the Unite union, which represents many workers at Litchurch Lane, said it has already received assurances from senior executives at Bombardier about the future of the train factory, which employs around 2,000 people.

Unite assistant general secretary Steve Turner said: “The Bombardier factory in Derby is a first-class facility with a world-class workforce.

“Unite has already received assurances from Bombardier that the sale of the company will not affect the Derby factory and its workers and the union will now seek an urgent meeting with Alstom to receive similar guarantees.

“Over the coming months Unite will be working with its sister unions in both the European Union and in North America to ensure that our members’ concerns about the sale are fully understood and that their terms and conditions are in no way diminished.”

Paresh Patel, Unite’s regional secretary for the East Midlands, said: “Unite will be watching closely as to what this sale will mean for our members and our priority will be to secure guarantees over our members jobs, pay, terms and conditions of employment.

 

[duesselmartin]

Hennigsdorf, near Berlin, is also nervous.

 

[rdlover777]

Hennigsdorf, near Berlin, is also nervous.

What would Hennigsdorf offer that Alatom would want?

 

[43096]

It's happening https://www.derbytelegraph.co.uk/news/business/french-firm-alstom-agrees-buy-3859278

A “world class workforce” that builds trains that don’t work. That just doesn’t add up.

 

[duesselmartin]

What would Hennigsdorf offer that Alatom would want?

Capacity If needed.
Fact is Bombardier is in trouble and aby Bombardier site might close one way or the other.

 

[crablab]

What would Hennigsdorf offer that Alatom would want?

I believe a lot of Bombardier's rail software engineering is in Germany

 

[LNW-GW Joint]

I believe a lot of Bombardier's rail software engineering is in Germany

And probably Canada.
A phrase I noted from somewhere was that software people from "all over the world" were working on the Aventra problems.
Alstom do have software people they could bring to the party, if they are still in trouble next year.

I imagine the deal will knock any thoughts of expanding Alstom Widnes on the head.
Isn't Crewe Works (what is left of it) also owned by Bombardier?

From what I have read, Bombardier has 5000 people in the UK, while Alstom has 2000.

 

[Gag Halfrunt]

Unite seeks reassurance about future of Bombardier’s Derby factory

The article doesn't say anything about Unite wanting assurances about Widnes, although smaller sites would usually be first for the chop in a merger. Perhaps they just assume that Alstom see everything Bombardier as disposable.

 

[Meerkat]

Unite seeks reassurance about future of Bombardier’s Derby factory

The article doesn't say anything about Unite wanting assurances about Widnes, even though smaller sites would usually be first for the chop in a merger.

Alstom is currently sized for refurb work isn’t it? Be a while before that sort of thing could be fitted in Derby even if they did want to.

 

[43096]

Perhaps they just assume that Alstom see everything Bombardier as disposable.

With some justification. Look at the way the former GEC has been slashed since it became Alstom.

See one of Roger Ford’s Informed Sources laws: “Never engage in joint ventures with the French”.

 

[Europa45]

Alstom is currently sized for refurb work isn’t it? Be a while before that sort of thing could be fitted in Derby even if they did want to.

Can't see consolidation at Derby, it's an old Victorian shed. It's not suited to modern manufacture. It will likely see out the current builds for Aventra and any other fleets they can sell of the product and then either close because the glut of new stock will end, or maybe play a part in HS2? Long term either close or do maintenance. Export market for the UK is unlikely.

Widnes could either play a part in HS2 (alongside BT), and this could kill off the Hitachi/BT joint bid. Or it could expand to cover refurb of the additional bombardier fleets.

Both companies have work individually so the merger won't cause one of the sites to close.

 

[LNW-GW Joint]

I can't see the infrastructure/signalling business being consolidated easily, as both technologies are in demand in the UK.
Maybe Alstom is the stronger here.
It certainly complicates the HS2 rolling stock bids - AGV versus Zefiro.

 

[Europa45]

I can't see the infrastructure/signalling business being consolidated easily, as both technologies are in demand in the UK.
Maybe Alstom is the stronger here.
It certainly complicates the HS2 rolling stock bids - AGV versus Zefiro.

BT are tiny on signalling in the UK, the biggest players are by far Alstom and Siemens. That was the main objection to the Siemens merger because it would have given them almost a monopoly.

For HS2 BT are in a joint bid with Hitachi so I don't think it was a standard product but a bespoke mix of the 2 companies technology. So no idea what the takeover could mean for that. But imagine HS2 will have a problem with it if it reduces their short list again.

 

[JonathanP]

And probably Canada.
A phrase I noted from somewhere was that software people from "all over the world" were working on the Aventra problems.
Alstom do have software people they could bring to the party, if they are still in trouble next year.

It isn't just the Aventra. Deutsche Bahn have halted deliveries of Traxx AC3 locomotives(a.k.a BR147), due to their appalling reliability caused by software problems. They have become notorious for randomly 'sitting down' and refusing to move even after multiple reboots taking up to an hour.

They are always advertising for train control system Software Engineers at Bombardier Hennigsdorf. Sometimes I think about applying, just to get to meet those poor guys and see how miserable they must be.

 

[Mikey C]

With some justification. Look at the way the former GEC has been slashed since it became Alstom.

See one of Roger Ford’s Informed Sources laws: “Never engage in joint ventures with the French”.

A lot of that was due to the hopeless products coming out of Washwood Heath. With the failure of the Junipers to sell (and not being in the PPP team which won the Underground 2009 and S stock deals), that meant that the UK traction division lost most of its business too.

Pre the consolidation of the industry, the most common EMU combination was BREL bodywork with GEC traction, maybe if BREL had been sold to GEC-Alsthom, we might have a better domestic rail industry

 

[43096]

A lot of that was due to the hopeless products coming out of Washwood Heath. With the failure of the Junipers to sell (and not being in the PPP team which won the Underground 2009 and S stock deals), that meant that the UK traction division lost most of its business too.

Pre the consolidation of the industry, the most common EMU combination was BREL bodywork with GEC traction, maybe if BREL had been sold to GEC-Alsthom, we might have a better domestic rail industry

The products themselves weren’t necessarily hopeless - the Juniper is actually a very good train - it was Alstom’s failure to support them that cost them. Had they supported the initial build of 458s SWT would never have gone to Siemens for what became the Desiro order, which in turn would have meant the 350s would also have been Junipers.

Alstom hasn’t won a single competitive new trains tender in the UK since the GEC-Alsthom joint venture was floated on the Paris stock exchange. That tells you plenty about just how catastrophically bad they have been.

 

[Europa45]

The products themselves weren’t necessarily hopeless - the Juniper is actually a very good train - it was Alstom’s failure to support them that cost them. Had they supported the initial build of 458s SWT would never have gone to Siemens for what became the Desiro order, which in turn would have meant the 350s would also have been Junipers.

Alstom hasn’t won a single competitive new trains tender in the UK since the GEC-Alsthom joint venture was floated on the Paris stock exchange. That tells you plenty about just how catastrophically bad they have been.

Pendolino must have been won around then though, built between 1999 and early 2000's? And they are a good, reliable train.

They also did the Nottingham tram new trams.

 

[43096]

Pendolino must have been won around then though, built between 1999 and early 2000's? And they are a good, reliable train.

They also did the Nottingham tram new trams.

The Pendolino order was just before the flotation. Fair point on the trams.... I should have said mainline railway.