Business Editor Ron Godfrey takes a look at the latest developments at York's former Carriageworks site

Are the doom-merchants really misreading all the signs about the future of Thrall Europa in York?

On the face of it there is plenty of grist for the pessimist's mill.

After all, the new factory on the former ill-fated ABB carriagemaking site in Holgate Road was hailed two years ago as the Chicago-based Thrall Car's new centre of operations in Europe.

Now it turns out not to be central at all. A new headquarters is planned for somewhere else in western Europe and the American wagonmakers have been busily acquiring two crucial operations in central Europe.

From now on Thrall Europa will operate the freight wagon operations and metals business of CKD Vagonka Studnka in the Czech Republic and it also now owns Rail Project, a design-engineering firm in Poprad, Slovakia.

Where sterling is strong and unit costs at York are relatively high, labour is much cheaper in Eastern Europe. So is this the thin end of a wedge which will finally be driven between York and the rest of Europe when it comes to wagon building?

And is it a coincidence that it comes at a time when Thrall Europa of York must find new contracts beyond the five year order for 2,500 wagons from English Welsh and Scottish railways, 1,000 of which have already rolled off the production line since July, 1998?

Gone, it seems, are the recent days when the demand for wagons built up such a head of steam in the wake of the Labour government's road-to-rail policy that EWS was speculating that it might be able to double its order from Thrall Europa.

Even Jim MacFadyen, general manager of Thrall recognises that market conditions have changed in those two years citing the example of the affect of "upheaval in the coal market" on wagon demand, but his remarks came just before last Tuesday's Budget which further undermined the road-to-rail dream.

Chancellor Gordon Brown announced that where the limit for increased duty on lorries was at 41 tonnes, now it was being increased to 43 tonnes; and there will be no tax for using recycled aggregates from redundant buildings, although quarried aggregate - a huge source of revenue for the railways - would be taxed.

Not that the demand is diminishing. "It just doesn't have the same growth as before," says Andy Lickford, a spokesman for EWS .

All this causes Brian Anderson anxiety. The York factory is non-union, but as Northern regional industrial organiser for the vehicle building section of the TGWU he takes a keen interest in it.

He says: "I fear that Thrall Europa has left its options open to pull out of York; I fear it because there is no long-term commitment."

Mr Anderson, was on the recently-disbanded Holgate Park Development Board which negotiated the York deal with Thrall. He added: "There is a five year cut-off point on Thrall's lease - exactly the same period over which the EWS contract is taking place."

He regarded the creation of a new production base in Central Europe and the re-positioning of a European headquarters as a sign that for all its investment in York Thrall still intended to abandon the city in favour of eastern Europe.

"Welders in Hungary are doing remarkable things for just £20 a week wages. We can't compete with that."

But Donn Green, the communications officer of Thrall Car in Chicago, calling from Prague to announce the latest acquisition, insisted that pulling out of York formed no part of his company's policy.

That is backed by Mr MacFadyen who while conceding that it is necessary to win new orders, says that the concentration by the York plant on UK demand was always Thrall Car policy and the Czech development now allowed broader coverage of the rail wagon needs of Europe and Scandinavia.

He remains patiently convinced that the efficiency of his plant which has produced tailor-made wagons to high specification and on time is bound to translate into new orders., although of course he is realistic.

"We are dependent on the growth of rail freight in this country. We make no bones about that. But our very presence in the marketplace and our capability here in York will help the process of development of rail freight. We are ideally placed when that growth happens."

Soothing words which we should all take seriously, but it is hard not to feel knee-jerk pessimism based on our horrible past experience - that the death of order-starved ABB and the loss of hundreds of jobs could happen all over again.

see also 'We're still on track, insists Thrall chief'

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.