Hitachi struggles in UK, EU business thrives

Tuesday, December 12, 2023

Japanese rolling stock manufacturer Hitachi has dealt a blow to the United Kingdom rail sector by taking a significant ‘writedown’ on its Newton Aycliffe factory in the north-east of England.

The £82 million ($103 million) plant, constructed in 2015 to support Hitachi’s intercity rolling stock contract for the UK’s East Coast Main Line, has been revalued with a staggering loss of £64.8 million ($81.4 million), according to Hitachi UK’s annual financial filing with Companies House.

Despite a lack of current orders, Hitachi emphasized that the revaluation does not spell the end for the Newton Aycliffe factory. The company attributed the loss to a “production gap,” along with global inflation and supply chain challenges. Hitachi clarified that this impairment should be seen as a reflection of the current industry challenges and not as a signal of impending closure, asserting that it won’t impact the factory’s operational capacity to fulfill existing or future orders.

The rail industry in the UK has been grappling with various challenges in 2023, and Hitachi’s substantial loss adds to the sector’s concerns. The economic impact of the revaluation, combined with the broader issues faced by the rail industry, raises questions about the stability and resilience of manufacturing operations in the region.

The writedown underscores the complexities and uncertainties faced by businesses operating in the UK’s rail sector, influenced by factors ranging from production gaps to global economic conditions. The reassurance from Hitachi about the factory’s continued operational capability offers some optimism amid the challenging circumstances.

It is crucial for industry stakeholders, government bodies, and Hitachi itself to collaboratively address the challenges posed by the changing landscape, ensuring the long-term sustainability and competitiveness of the UK’s rail manufacturing sector. As the rail industry navigates through these uncertainties, a strategic and collaborative approach will be essential to mitigate risks, enhance resilience, and foster an environment conducive to growth and innovation in the sector. The Hitachi case serves as a reminder of the need for proactive measures to address industry challenges and safeguard the future of key manufacturing facilities in the UK.

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