Say no the closure of England’s last complex warship builder

Jul 2, 2012   //   by NavyLookout   //   Articles, blog  //  18 Comments

BAE Portsmouth Yard

BAE Systems Portsmouth warship building facility, (background) under threat of closure. Photo: Via Wikipeadia

Failure by successive governments to place sufficient and regular orders for warships has caused the Royal Navy to decline but has also resulted in the gradual closure of British shipyards. There are now only the yards in Glasgow, Rosyth and Portsmouth left in the United Kingdom that can build complex surface warships for the RN (the Barrow yard is now dedicated to nuclear submarine construction, having launched its last surface ship HMS Bulwark in 2001). Both Portsmouth and the Scottish yards are currently employed building the 2 new aircraft carriers but when that work is complete there will be insufficient work before construction of the Type 26 Frigate is planned to begin. LEK, a private consultancy firm (we really need more of those!) has advised that the Portsmouth shipyard is “vulnerable to closure”. With depressing lack of concern for the long-term interests of the Royal Navy, Defence Secretary Phillip Hammond is apparently blasé about the Portsmouth yard and is content to let the owner, BAE Systems, just shut the facility.

(Please note, it is the Portsmouth shipbuilding facility that is threatened with closure, NOT the naval base itself, which has led to some confusion in the media and mischief by Labour politicians)

Why closure would be disasterous

  • In the nightmare scenario of Scotland choosing independence (which we all hope and pray won’t happen), the RN could find its most important supplier in a ‘foreign’ country.
  • Should a future government wake up to the collapse of RN surface warship numbers and want to start a substantial rebuilding programme, the already limited capacity to expand warship construction would have gone completely or require huge investment. For all but the least ambitious rebuilding programme, new warships would have to built abroad. The potential for a bigger, export-led, British naval shipbuilding industry would die, with no way back. Once a capability is lost it is either very expensive or impossible to regenerate.
  • The Portsmouth shipbuilding yard directly employs 1,300 people with up to 4,000 jobs in the area dependent on the yard. Not only would people suffer losing their jobs, but valuable skills & experience would be thrown away and there would be a devastating impact on the local Portsmouth and South Hampshire economy.
  • Like most current MoD ‘planning’, closure would leave no alternative option available to cope with contingencies, unforeseen emergencies, enemy action or ‘sods law’ which could close a yard for a time. It’s bad enough the RN is already reliant on one company for all its vessels, but complete reliance on the Scottish facilities would be a gross strategic error.

Government can take action that will solve the problem & won’t blow the budget

HMS Clyde - BAe Systems Model

HMS Clyde – BAE Systems model

Although the Naval Staff are understandably nervous about requesting corvettes or offshore/ocean patrol vessels (OPVs) it is obvious that the RN could really do with some simple, cheap ships to operate in policing and anti-piracy roles which we have recently had to withdraw from. This could take some pressure off the over-worked frigate and destroyer force. The Naval Staff’s legitimate fear is that the MoD will use OPVs in a future round of budget decisions to justify cutting the fully capable warships which are the Navy’s first priority. Provided there are cast iron guarantees this will not affect frigate numbers, a simple solution to the gap in orders between the carriers and Type 26 is to order at least 2 OPVs to be built in the Portsmouth yard. (We should not accept the MoD’s flawed suggestion of stretching out the construction of the second carrier, Prince of Wales.) This would provide ships the RN badly needs and work in the interim period before Type 26 construction starts. An OPV, HMS Clyde used for patrolling the Falkland Islands was built in Portsmouth in less than 2 years (2005-07) and similar ships could probably be built for around £50 million each. Another alternative would be to order a long-term replacement for HMS Endurance / HMS Protector, the RN’s Antarctic patrol ship. The design and construction experience for OPVs is already in place and it would put minimal strain on Mr Hammond’s ‘oh so carefully balanced’ defence budget, while providing huge benefits. This suggestion has been already put forward in the House of Commons by Penny Mordaunt MP, one of the RN’s few committed political defenders. In fact due to bizarre Terms of Business agreement set by the previous government, the MoD could be liable for £600 Million compensation that would have to be paid to BAE in the event they close the yard. In other words it would far cheaper for the taxpayer to build new ships than close the yard! It’s a crazy suggestion that the RN might actually gain in capability for a change, but it might just work!  (To give a sense of financial scale, £100m pays just one-third of the annual finance charges on the PFI programme to provide 9 refuelling tankers to the RAF for £10bn over 27 years.)

Critical to the future of the RN is the Type 26 Frigate. After being further slashed in 2010, the RN’s frigate force now comprises just 13 Type 23s. This number is far from adequate but the public needs to encourage their MPs to draw a ‘line in the sand’ on hull numbers and for the ships to be replaced on a one-for-one basis. ‘Main gate’ approval for programme is due in 2013 and the sooner government provides funding and commits to an order of at least 13 ships, the less uncertainty there will be for shipbuilders. With 13 vessels the construction could be split between Portsmouth and Glasgow and ensure continuity of work while the RN receives at least 1 or 2 ships per year from 2020.

The naval base conundrum continues

BAE is probably already pushing hard to tie the Type 26 Frigate construction deal to a long-term support contact for the ships based in Portsmouth where they already undertake maintenance work on Type 45s and other vessels. A further political ‘sweetener’ might be that job losses in the construction yard could be partially offset by retaining staff for a lucrative Type 26 support contact. Unfortunately this would almost certainly be the death knell for Devonport Dockyard, the logical base for the Type 26. Devonport has historically been the RN’s frigate base, is the largest naval base in Western Europe, includes a purpose-built covered Frigate Refit Complex and is ready, willing and able to be home to the Type 26. Just like the Portsmouth yard, the resources and skills at Devonport must be maintained for strategic reasons, the long-term benefit to the RN and the city of Plymouth.

BAE’s dismal record of warship exports exacerbates the problem

BAE Systems warship orders history

BAE Systems warships export record
Click here for full size PDF version.

The previous Labour government casually allowed BAE to swallow the shipbuilding arm of VT Group in 2009, (its last competitor) thus allowing them to have a monopoly on UK warship construction. The belief was that a bigger builder would have the critical mass to survive on an ever-thinner diet of orders for the RN and allow it to win in the international export market. VT had a successful heritage of designing and exporting warships overseas (although then based in Southampton). For a company of such huge resources BAE Systems Surface Ships has a feeble track record in warship exports. Since they got into shipbuilding in 1995, they have not won a single new construction order, beyond those already on the books of the companies they took over. These export failures have become a major factor in the threat of closure that now hangs over the Portsmouth yard and government needs to apply real pressure on BAE to actually go out and sell ships to other nations. Their results are on a par with the England football team, vastly out-played by their Spanish, French and German counterparts who have thriving warship export businesses. Besides keeping skills and industry going, an important benefit is that export orders help reduce the unit cost of warships for the RN. Turkey has already rejected offers to be part of the Type 26 programme although other foreign participation remains a possibility. While there are some good people doing their best in BAE’s surface ship division, fundamentally BAE is an aerospace company at heart (the clue’s in the name!). The biggest profits come from the US or building over-priced aircraft for the RAF. Its shipyards are perhaps regarded as merely disposable ‘steel bashers’ of far less importance to the bottom line.

18 Comments

  • […] Say no the closure of England’s last complex warship builder […]

  • […] Portsmouth is actively lobbying government to build two Offshore Patrol Vessels (OPVs) partly to keep the BAE Portsmouth shipyard in work but also to boost RN hull numbers. Although outside the very tight MoD core budget, if the […]

  • […] First of class, HMS Sheffield commissioned in February 1976, built at Vickers Shipbuilding in Barrow (now part of BAE Systems and dedicated to nuclear submarine construction) and the construction programme was spread between Swan Hunters (Newcastle – now closed), Cammel Liard (Birkenhead – closed but revived as ship repair yard) and Vosper Thorneycroft (Southampton, moved to Portsmouth then swallowed by BAE and now under threat of closure). […]

  • […] predicted, the Government casually allowed BAE Systems to shut their Portsmouth ship building yard. This is both a political fudge and strategic folly which the Royal Navy will suffer from and the […]

  • I dont know if many have been following the Spanish navy incursions into Gibraltar territorial waters. Last week they demonstrated for 20 minutes in an obvious display of contempt for the Royal Navy’s lack of meaningful presence.

    Gibraltar is, for the purposes of the EU at least an integral part of the UK, much as th Isle of Man or the Channel islands. We really do have to show resonsibility to protect and possibly defend the Gibraltarians. The Spanish Government should not be given a free pass to bully and harrass the people there. They are British citizens.

    If ever there was a need to build a Gibraltar guard ship it was now. A River class OPV is the right response. Why this is not a prioity I have no idea.

    • 4th Watch,

      Sorry for late reply, but its simply; Political will and money. The government have neither!

      What annoys me is the fact we are meant to be working ‘together’ in this EU club; how long before the Spanish bring this up in Brussels for the British to “return” Gibraltar?!…And because we are currently hated (although nothing new there) the unelected MEPs will probably try and make us!

      stm

      • Correction to my above, not MEPs, but meant the European Commission.

    • To maintain complex shipbuilding infrastructure clearly a steady order book is necessary. To increase the policing duties RN needs more corvette type vessels which can be produced quickly and cheaply to enable more vessels to be located strategically around the world for policing / anti piracy / drugs duties. Maybe supplemented by the Brunei corvettes if still available which could be put into service cheaply.

  • If the government gets their way, it womt matter what happens in Scotland, the yards of South Korea are already building our fleet support tankers and the americans are supplying the F35 to us for the carrier, I say carrier as I am not convinced that the second or first will be sold off, India wants another and an off the shelf bargin like the recent sale to Australia. HMS Albion will be next….Any old Iron?

  • I feel we have to go back to the future with this Portsmouth yard, and it’s original, more dynamic management it had. You can easily find out what VT’s ambitions were, and where they wanted to go with it, including phase 3. What has happened, does not need to happen. This is certainly a Drayson (the motor racing hero, nower days) mess up.

  • i read today, that the goverment may yet do another [u] turn on the carriers, if the cutbacks to the American defence get worse, as they may well scrap the -
    35b jump jet, for our carriers, but i cannot find if their is any truth in this,
    as this would mean even more delays , and the tearing up of the decks, to install cat traps.
    thanks

  • The Type 26, is not the answer. The MHPC programme, the 8 ship’s the Navy are to get. Also Portsmouth is not suited for building the Type 26′s. And don’t forget that there are at least 2 more programmes that could help bridge the gap. Which are Future Force Protection Craft and the PACSCAT.

    Dave

    • Portsmouth could definitely build sections of Type 26 (like Type 45) but if MHPC are a better fit then fine. However there is no commitment to the programme yet unlike the Type 26 which is at least slowly progressing to main gate. Doubtful if PACSCAT would provide enough work either but whatever happens, the key thing is to place orders for something to keep yard working in the interim. Use it or lose it (probably forever)!

      • “However there is no commitment to the programme yet unlike the Type 26″
        The money is there in the budget.

        Dave

    • Dave, Hello again. Isn’t the PACSCAT or MHPC similar in design to the Spanish craft. I think you know where I’m going with this, as well as this contract, depending on how they are classed.

      • Both will be made here in the UK the MHPC is a BAE designed ship based on the Offshore Patrol Vessels, but bigger.
        The PACSCAT (Partial Air Cushion Supported CATamaran) again UK designed and again will be made here in the UK. With Griffon Hoverwork doing some work as well. The requirement is for a fleet is around 12 to 18

        Dave

        • Griffon would do well to look at the 7-10 acres designated for marine use at the VT’s woolston site. That’s if they are looking at expansion. That’s another story though. Palmer Johnson pulled out.

  • I am almost sure Philip Hammond is not as thick as two short planks. If I am correct in this assessment, then one has to ask why he behaves like he is?

    From a political standpoint let alone a national security angle, if I was a Conservative I would envy the parliamentary seats around Portsmouth. If he takes into account Plymouth there is considerable mileage in the Conservatives trying to make gains off Labour and Liberals in these seats.
    The potential for Navy towns to go to his political opponents is considerable. Unfortunately he seems dead to all this. I would suggest he also looks at the towns that benefit from defence spending and realises the winnable ones are within his grasp.

    I really do apologise for making this so political but the Conservatives deserve to lose the next election if they dont play this sort of game.

    BAE is it seems more or less relocating to the USA and should be forced to disgorge VT before it does.I haven’t noticed a lot of Conservative voters in the USA by the way.

    I hope some one makes these sort of points to Cameron and reminds him of what makes a successful election. That’s right its winning seats. Gordon Brown was ruthless in this department.

    God help us that its come to this.

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