2,000 jobs at historic railway plant under threat after German bid win

Fears have been mounting over the future of the firm's 3,000-strong workforce in Derby - who run the UK's only remaining train factory - after the UK government announced last month that it had selected a consortium led by German giant Siemens to manufacture 1,200 carriages for the upgrade of the Thameslink line, which runs from Bedford to Brighton.

A press conference was due to take place this morning at which Canada-headquartered Bombardier was expected to announce that it had no choice but to slash two thirds of jobs at the plant after losing out to the Siemens-led bid.

Rail minister Theresa Villiers said at the time that the Siemens tender represented the "best value for money for taxpayers" and insisted that it would create up to 2,000 jobs in the UK even though the German heavyweight's manufacturing base is at Krefeld, in the industrial Rhineland region.

In a letter to Prime Minister David Cameron at the weekend, shadow business secretary John Denham and shadow transport secretary Maria Eagle accused the coalition government of dealing a "body blow" to Britain's rail manufacturing sector and called for a "full independent review" of the Thameslink contract.

They wrote: "It is our belief that the loss of the contract could critically damage Britain's last train manufacturing company. It could affect the inward investment that Bombardier makes in its own operations across the UK, and to the many suppliers which rely on it. And it raises serious questions about Britain's ability to be a world-leading base for manufacturing.

"It is essential that we do all that we can to support our manufacturing businesses. If we do not, British companies will continue to lose out to our global competitors."

Bombardier's Derby operation has a history dating back 150 years but most of its contracts are due to come to an end in September.

Mark Young, co-ordinating officer of the Unite union, said yesterday: "The country that invented the railways is at risk of losing its ability to manufacture trains unless the government urgently rethinks its decision to award preferred bidder status to Siemens instead of Bombardier. The government can reverse this decision and get UK train manufacturing back on track.""It is simply unsustainable for the government to claim to support UK manufacturing with one hand and then with the other hand take decisions which potentially wipe out an entire manufacturing sector."

Bombardier last night declined to comment on speculation over job losses but was due to issue a statement early this morning. The firm is headquartered in Montreal, Canada and claims to be the only company in the world that manufactures both trains and planes.

TUC deputy general secretary Frances O'Grady said it was a "devastating blow for Bombardier, Derby and the wider UK economy".