The Guardian from London, Greater London, England • 20

20 FINANCE AND ECONOMICS The Guardian Thursday July 17 1997 French open arms door York back on the track American money reopens historic wagon works two years after their closure, reports MARTYN HALSALL which closed in 1995 after 156 years is to reopen gained against fierce international rivalry, including France and eastern Europe was the local council's retention of the large carriage-building workshops. They face updating and a fresh future, like the skilled former employees expected to be recruited and retrained for 'It's quite a miraculous story of industrial recovery. When heavy industry goes, people normally expect it has gone for good' Rolling on the ABB plant passing through York. The vast former ABB site could see fresh railway restoration work as early as next week after facing a chequered future over the past two years. Housing and light industry will be developed alongside its revived manufacturing presence, but yesterday's announcement will go some way to healing the blow to the city's morale which followed the ABB shutdown.

York's Labour MP, Hugh Bayley, "It's quite a miraculous story of industrial recovery. When an old-established heavy industry like shipbuilding or steel goes, people normally expect it has gone for good. The York decision is the first significant stirring in what could eventually be a mini-revival of railway engineering in Britain. Richard PHOTOGRAPH: JOHN GILES economic sector is the tourism which celebrates its Roman and Viking foundations, recently formed an inward investment board to attract international jobs and funding. Holgate Park was marketed internationally by a regional consortium including the city council, Yorkshire and Hum-berside Development Association, English Partnerships and the regional training and enterprise council.

Paul Murphy, chief executive of the new investment board, said yesterday's announcement was "fantastic news for the City of York. It puts York firmly on the international map." Equally jubilant- was Tony Walton, the union leader who led the fight to save the carriageworks. "I am so chuffed I could throw a party," he said. the next generation of rail freight traffic. The company will assemble freight wagons on the re-named Holgate Park using 300,000 sq ft of manufacturing space in the two large carriage-building sheds which have been retained.

Production will begin next year, with an initial 300 employees. The new order marked "a real turning of the corner "for a city diversifying its manufacturing after a downturn in its traditional industries, said Professor Tony Robards, pro-vice chancellor for external relations at York University. While York retains a considerable presence in the confectionary industry founded by Quaker magnates as early as 1767, it has also been developing its Bioscience Initiative for industry. The sector already employs 1,500. The city, whose third big Branson has promised to spend 1 billion on new rolling stock for the West Coast Mainline he now runs and Great North Eastern Railways is also in the market to lease some new trains.

Mr Branson has made it clear he favours tilting trains for the West Coast. The front runner for the work, the Swiss-Swedish-German alliance AD-Tranz, says it will do the work at the old British Rail engineering works in Derby if it wins the work and has retained 300 skilled workers there. Fiat Ferroviaria, the only company in the world that has a tilting train in service, has teamed up with GEC Alsthom to bid its Pendolino for the contract that could create up to 3,000 jobs in the West Midlands. An important factor in York's American victory yesterday: "This Government wants to see rail freight putting the heart back into Britain's rail industry. We want to see rail increase its share of the freight market and that will be a key part of Britain's new integrated transport policy." The new work will take place on the site of the former ABB plant, which closed in May 1995 with the loss of 750 jobs after 156 years.

Historically its thousands of workers, swarming from the site on their bicycles at the end of each shift, summarised the city's railway industry dominance. Railway employment reached a peak in the dying years of the last century as iron rails were laid under the, iron will of George Hudson, the Railway King, whose ideal empire would have seen all the routes in the country THE City of York reentered the railway age yesterday when a huge American investment revived a sector of the city's historic manufacturing pedigree, which appeared to have ended two years ago. The contract, which will create up to 400 jobs as the Chicago-based Thrall Europa produces 2,500 freight wagons over the next five years, is expected to be only the first tranche of a larger wagon building programme in tune with the Government's policy of diverting freight from road to rail. The new rolling stock will be built for English, Welsh and Scottish Railways which took over much of the former British Rail freight operation on privatisation. John Prescott, deputy prime minister, said in York Mark Mllner THE French government yesterday open- ed the door to fresh moves in the restructuring of Europe's arms industry by signalling it was prepared to surrender outright control over defence electronics group, Thomson-CSF.

Days after the new left-wing government cancelled the full-scale privatisation of Thomson, finance minister Dominique Strauss-Kahn indicated that the Jospin administration was prepared to let its stake fall below 50 per cent, perhaps to as low as 33 per cent. "(When you start) with 58 per cent, if you want to create an alliance with a partner it is difficult to keep around 50 percent," Mr Strauss-Kahn said after a closed-door hearing of the parliament's defence committee. "That is why the prime minister has talked of a decisive stake and not a majority stake." Thomson, one of Europe's leading defence electronics businesses, is considered a key piece in plans to restructure the European defence industry to face the challenge of their huge American rivals, themselves the product of a recent series of mergers. Two French companies Alcatel Altshom and Lagar-dere had already submitted bids for the Thomson stake before the cancellation of the privatisation and both saw its acquisition as opening the way to further moves. Lagardere's missile subsidiary, Matra, already has a joint venture with British Aerospace while Britain's GEC has expressed a willingness to work with either company.

Ironically Lagar-ddre yesterday cancelled a planned bond issue, the proceeds from which were to have been used to fund the acquisition of Thomson. Alcatel is now regarded as the favourite to acquire the stake the Jospin government is prepared to sell. we work? Andersen Consulting, Computacenter, SAP, and many others. For more information call BT today on Freefone 0800 306 305 or visit our website at www.btintranet.com. BT can do everything for you, from your initial consultancy through to design, set up and maintenance.

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