Published: 4th September 2013
Rail.co.uk reported on Railcare’s Wolverton and Springburn Works entering Administration on July 31when the sale, thought to be a done deal 72 hours earlier, to Knorr-Bremse Rail, a German company, fell through at the last minute.
BDO were appointed Administrators on July 31 and later made 50% of the workforce redundant leaving 202 people in work when the German company took over on August 26. Railcare’s rail vehicle component and overhaul business plus its assets were sold to the newly formed Knorr-Bremse Rail Systems (UK) Limited with the formal announcement made the following day.
The streets of Wolverton were rife with rumour over the bank holiday weekend and now the deal has been done, it means that train renovation, refurbishment and accident repairs will carry on at both Railcare’s sites.
The first round of redundancies saw 118 employees at Wolverton and 33 at Springburn lose their jobs on August 7. At Wolverton, the staff were gathered in a huge workshop for the usual briefing but names were called out in departmental order.
If a name was called out, then that person had to exit by a specific door to be told they were out of as job. Initially this was seen as a harsh way of doing things but some who lost their jobs think that it was brutal but as it was done quickly, it was probably the best way to carry out a terrible task.
Local MPs at Wolverton and Glasgow pressured the Government but soon after a second smaller round of 18 redundancies was announced on August 14. This was after the amount of work that had to be carried out was reviewed. Most of Wolverton’s apprentices lost their jobs despite being finalists for the last three years in an UK-wide competition to choose the best apprenticeship programme. The good news is that most already have found new jobs locally.
The BDO business restructuring partner Kim Rayment said: “The sale of Railcare’s business and assets to Knorr-Bremse will secure a future for the business and jobs. Under the conditions of the sale Knorr-Bremse has agreed to pay retained employees their July salaries, which Railcare was unable to provide before it entered administration. Current employees will therefore be paid for all work they have done to date.
“We are delighted with this very positive outcome for the business, employees and more broadly for the communities of Wolverton and Springburn, both of which have strong railways heritage. This outcome has only been possible because of the support of customers and the dedication of staff, and we are grateful for this cooperation throughout the administration.”
Passengers see the finished product but the direct customers are the three Rolling Stock companies, known as ROSCOs. They own 90% of the UK’s trains and are understood to have been, supporting Railcare behind the scenes for over a year. The dire financial situation has been ongoing for over three years and caused the cancellation of the July 2010 planned open weekend.
To avoid having to deal with a monopoly supplier, the ROSCOs would have been keen to keep Railcare in operation. If they had gone under, then only one comparable company, Wabtec could have carried out the volume and type of work. Eastleigh Works run by Arlington Fleet Services is running at capacity and they were the only other potential buyer.
The Royal Train is based at Wolverton maintained and operated by a German company, DB Schenker who mainly operate goods and engineering trains. Knorr-Bremse is a well known train component suppliers operating worldwide and have a turnover measured in billions of Euros.
Knorr-Bremse RailServices (UK) has been created and is part of The Knorr-Bremse Group and will operate the two Railcare Works. The new company will be ‘supported’ by Knorr-Bremse UK but will retain its own unique identity and says it will be business as usual carrying out train maintenance and repair.
Paul Goodhand, Managing Director of Knorr-Bremse in the UK commenting on the acquisition of Railcare said, “We are delighted to welcome Railcare into the Knorr-Bremse family of companies based here in the UK. My team and I in the UK and the Executive Board of Knorr-Bremse are committed to the future success of Knorr-Bremse RailServices (UK) Limited. We see Knorr-Bremse RailServices operations developing and expanding in the future in what we view as a dynamic area of rail operations with much potential.
Railcare currently has many skilled and experienced individuals working in the UK carrying out vehicle overhaul and repair and also has the majority of the UK train repair business. We believe that with the support of Knorr-Bremse, both in terms of solid financial investment and in process and management experience and support, we will, together with the existing team, be able to create a strong, new company.
Our vision for Knorr-Bremse RailServices (UK) Limited is to create a company which supports customers in keeping their trains running through offering them an outstanding range of quality train maintenance and repair specialist services going forward.”
Wolverton Works celebrates its 175th anniversary on September 17 this year and a series of planned celebrations looked to be in jeopardy as a result. ‘The Full Works’ is a 68 page book to be published on September 3rd will need another chapter added to it and this will be written by then.