BAE to play down threat of shipyard closure

Published on Sunday 12 February 2012 00:00

DEFENCE giant BAE Systems is poised to play down fears this week that it could close a Scottish shipyard as part of a review of the shipbuilding business if Scotland votes for independence.

BAE chief Ian King recently brought in management consultants to examine the future of its two shipyards on the River Clyde in Glasgow and its yard at Portsmouth, triggering fears about the security of thousands of jobs.

When the company posts annual results on Thursday, King is set to confirm that LEK Consulting continues to look at all options for the surface ships division. But he will stress that no final decision has been made.

The BAE boss will want to avoid becoming embroiled in the political controversy about Scottish independence and its implications for BAE’s yards at Govan and Scotstoun. The company is understood to believe any decisions should be based on commercial criteria rather than political factors.

Meanwhile, City analysts believe Scottish shipyards are more likely to escape the axe than Portsmouth.

Howard Wheeldon, an independent defence analyst with more than 40 years’ experience of the sector, said: “If BAE decides to close a shipyard because of uncertainty about future work levels, I think it would be Portsmouth. It would be natural because Portsmouth is smaller than the Clydeside operation. They can build larger ships in Scotland and also do everything that Portsmouth does, such as constructing bits of destroyers. It is true that if Portsmouth closed and Scotland goes independent, all our shipyards would be in Scotland. But that’s not BAE’s concern, that’s the UK government’s concern.”

A BAE spokesman declined to comment.

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RealityChecker

Sunday, March 4, 2012 at 01:14 AM

#1 Devonport (now Babcock) refits subs and in the past has built RN ships. From: http:www.guardian.co.ukbusiness2012jan22bae-jobs-portsmouth-shipbuilding-threat If the shipbuilding is wound down, the Ministry of Defence will have to bear costs that could run into hundreds of millions of pounds under an agreement the MoD signed with the company in 2009. This guaranteed BAE a minimum of £230m a year in shipbuilding and support work over 15 years. The agreement can be cancelled at any time but the MoD would be "liable for remaining industry closure costs and compensation to BAE Systems for their lost investment". In 2010, the cancellation cost was estimated to be £630 million

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Angus McLellan

Sunday, February 12, 2012 at 01:58 PM

"It is true that if Portsmouth closed and Scotland goes independent, all our shipyards would be in Scotland." Hmm. Facts are tricksy things. Isn't Barrow-in-Furness in England and don't BAE have a shipyard there which can build very large ships and submarines? And Appledore too is in England and Babcock have a shipyard there. And although Cammell-Laird on Merseyside and A&P on Tyneside, Teeside and at Falmouth haven't built any ships for the MoD recently, they have done subcontracting and bid for complete ships.

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