Hundreds of train building jobs have been secured thanks to a £500 million deal.
Hitachi will make 14 “award-winning, British-built” trains at its County Durham plant.
The agreement – between Hitachi, FirstGroup and Angel Trains – eases fears of job losses at the Newton Aycliffe base, with about 700 workers’ futures said to have been in the balance after a gap in orders.
The deal will see the factory, based in the cradle of the railway, build five-car class 80X electric or bi-mode trains.
Work is expected to start in 2027, and bosses say it could be extended to include an additional 13 trains leased for services provided by North East-based operator Lumo.
Prime Minister Sir Keir Starmer says the deal will provide “certainty and stability” for Hitachi and its staff, adding it fulfils a Government pledge he made during a visit to the company’s base in early 2024.
He said: “We helped secure a deal that will help protect hundreds of jobs, keep this business ticking and improve rail services.”
Jim Brewin, chief director of UK & Ireland at Hitachi Rail, added: “This contract is a positive step forward, and just recognition for the hard work and patience of our teams across the business over recent years.
“We look forward to once again delivering for Hull Trains and Lumo passengers, who will benefit further from our award-winning British-built trains.
“Equally, we owe a debt of thanks to North East mayor Kim McGuiness and other local MPs, who have worked tirelessly in support of this investment.”
The news comes on the back of the Government’s announcement that South Western Railway will be the first of three rail operators to return to public ownership in 2025, with the Department for Transport aiming to bring “services back under public control to create a reliable rail network that puts customers first”.
Prime Minister Starmer added: “We’re revitalising our railway industry.
“Our trains used to be the envy of the world. We laid the tracks for others to follow.
“This Government is going to return our railways to that golden era once more.”
North East mayor Kim McGuinness and regional business leaders welcomed the news.
She said: “When I stood to be mayor, I went on a tour of the Hitachi factory and heard from workers on the floor that their number one need of a mayor was to protect their jobs now, and protect the future of train building in our region.
“This shows the power of what we can achieve when we stand together, and that our great North East has bright days ahead.
“We finally have a Government on our side, that is working with me to make the North East the home of real opportunity.”
Rhiannon Bearne, deputy chief executive and director of policy at the North East Chamber of Commerce, added: “Today’s announcement that the immediate future of Hitachi and its North East workforce is secure is good news for North East.
“This is an example of the power of partnership – of businesses and government working together to maximise investment and opportunity for our region.
“The vital role of local train operator and Chamber partner Lumo in securing the plants’ future shows what the region does best – collaborating to maximise our strengths and deliver national industrial impact.”
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