BAE to play down threat of shipyard closure

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.