Siemens Beats Bombardier in $2.5 Billion U.K. Thameslink Train Order

Siemens Beats Bombardier in $2.5 Billion U.K. Thameslink Train Order : Siemens AG (SIE), Europe’s largest engineering company, sealed a 1.6 billion-pound ($2.5 billion) contract to provide carriages for a London rail link, beating Bombardier Inc. (BBD/B), which is cutting jobs at its plant in England.

The order to provide 1,140 new carriages for use on the Thameslink line will be awarded to a consortium led by Munich-based Siemens, the U.K.’s Department for Transport said.

The Siemens team was nominated as preferred bidder by the British government in June 2011 after its financing unit helped structure the payment of the deal. Montreal-based Bombardier said after the announcement it would cut more than 1,400 jobs at its railcar plant in Derby, England. Most of Siemens’s rail manufacturing is in Germany.

“This will be a death blow to Derby’s economy,” Frances O’Grady, the general secretary of the Trades Union Congress, said in an e-mailed statement. “The Bombardier workforce is loyal, committed and highly productive. It is the exact opposite of the industrial policy that this country needs.”

Unlike Bombardier, Siemens has its own financing division which is able to lend money to customers to invest in its projects and facilitate investment by third parties. The consortium awarded the contract is called Cross London Trains, and comprises infrastructure investment groups Innisfree Ltd. and 3i Infrastructure Plc (3IN), and Siemens Project Ventures GmbH, a unit of Siemens Financial Services.


Source : Bloomberg

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