Contraction & consolidation – relying on a single shipyard for warship construction

Lack of warship orders and the Government’s ‘lassiez faire’ attitude is damaging the industrial base that the navy will need in the long term. This is clear to see in the likely consolidation of all Royal Navy warship construction on a single site.

Shipbuilding in Portsmouth allowed to die

HMS Prince of Wales PortsmouthLast month a section of HMS Prince of Wales departed by barge for assembly in Rosyth. This brought an end to hundreds of years of warship construction in the Solent area as the Portsmouth shipbuilding yard will now be closed. The campaign to keep this yard open has been running for 3 years, almost all the arguments were around the loss of jobs, the effects on the local economy and the cheapest way to construct warships. There were very few voices pointing out that England was losing its last complex warship builder and the Royal Navy must now rely entirely on facilities in Glasgow.

The BAE Systems facility in Portsmouth was re-located from Southampton in 2003 when Vosper Thornycroft merged with BAE. VT had a fine track record of building warships for export including coastal craft, minehunters, frigates and destroyers for the RN. When the two companies merged to focus on building sections for the Type 45 destroyers and the aircraft carrier project, no one expected BAE to give up on winning export orders. At a time when there is a growing global demand for OPVs and corvettes, it is hard to believe BAE with its vast resources could surrender VT’s lead to other European yards. Foreign warship construction would have kept the Portsmouth yard alive while orders for the Royal Navy are sparse. The Portsmouth yard was well suited to OPV construction and built several that were already on VT’s order books before closure. While BAE make most of its profits in aerospace, the fate of a few ‘metal bashers’ in Portsmouth is obviously not its top priority.

Government attitude to the closure was verging on negligent, airily stating there is “no business case” to keep the yard open. Looked at in purely financial terms they are right, but this is not just any old business but a strategic defence asset of national importance.

Of course at the root of the problem is a lack of orders for Royal Navy surface ships which, apart from obviously weakening the fleet, is continually damaging the industrial base that supports the navy. It may seem like a circular argument that a smaller navy needs fewer shipyards but this make no allowance for future needs. One day the navy may need to expand. A national emergency or preferably a timely recognition of our dependence on the sea may require a recapitalisation of the surface fleet. Once a yard is closed and skilled workers dispersed it is virtually impossible or extremely expensive to re-create such facilities from scratch.

By destroying yet more of the capacity for new construction, we lock ourselves into a dangerously small future navy or dependence on unreliable foreign help.

The solution to keeping the Portsmouth yard open was relatively simple. Order 4 OPVs, build 2 in Portsmouth and 2 in Glasgow, guarantee Portsmouth a share in the Type 26 programme and apply pressure to BAE to make a serious effort to win warship export orders. Even if BAE were set on divesting themselves of the yard, with ships on order it would have been a more attractive proposition to sell to another owner such as Babcock. Obviously competition in the warship building sector would not be welcomed by BAE. Their influence on government policy is difficult to quantify but many observers suggest that BAE’s monopoly allows them frequently to dictate terms to the MoD. We are assured by ministers that the new “Single Source Regulations Office” (SSRO) will ensure BAE behave themselves.

Glasgow or bust

The UK, and the Royal Navy in particular avoided a major catastrophe when Scotland wisely voted against independence. It had already been announced 3 OPVs will be constructed in Glasgow to provide continuity of work until the Type 26 programmes begins. Contrary to nationalist claims, there would have been no future for Royal Navy warship construction in an independent Scotland. Instead BAE can now press ahead with what it wanted all along, choosing between two development options for its Glasgow yards. The first option is a £100m two-site strategy which involves expanding existing facilities at both Govan and Scotstoun. The second option is a £200m single-site strategy which involves building a modern manufacturing facility at Scotstoun closing Govan.

BAE Video showing proposed options for Type 26 Frigate factory at Govan or Scotstoun

It now looks likely the second option will go ahead and all future Royal Navy warships will be built on a single site. It is very good news there will be a £200M investment in shipbuilding facilities (in addition to the £300M being invested at the Barrow yard to support the Trident replacement submarine programme). It is undoubtedly more efficient and cost-effective to build ships on a single specialist site where expertise and equipment can be concentrated in a centre of excellence. However when procuring critical defence assets there should be wider strategic considerations than just cost and efficiency;

  1. Lack of options for expansion to meet future needs
    A single site in an urban location cannot be easily expanded to meet greater future demand for ships. Far better to have multiple sites allowing many more options for growth and development.
  2. Vulnerability to enemy action, terrorism, natural disasters or accidents
    Resilience to the effects of of conflict or just the plain unexpected are rarely factored into our accountancy-driven defence policy. Putting all our shipbuilding eggs in one basket leaves no alternative site in the event of damage or problems with the facilities. Even before the closure of Portsmouth & Govan, we were already too exposed to this kind of vulnerability.
  3. lack of competition
    Although BAE owned Portsmouth and Govan already, having separate sites at least creates an element of friendly rivalry. It would also offer the attractive option of breaking the BAE monopoly by forcing the sale of one of the yards to another company.
  4. Vulnerability to political changes
    Despite the fortunate result of the Scottish independence referendum, it was a close run thing. We cannot predict the political changes that could affect Glasgow in future and of course the dream of Scottish nationalism is not entirely dead. Warship construction is always highly political but putting it on a single site may subject decisions to the very narrow political considerations of that constituency.

 

The UK does have some other shipbuilding facilities. Babcock’s Rosyth dockyard where the aircraft carriers are being assembled will probably return to being a repair yard when HMS Prince of Wales is completed but may retain some construction potential. Their yard at Appledore has built ships for the RN and is currently building the second of 3 OPVs for the Irish Navy. Cammel Laird at Birkenhead has come back from the dead and established itself as a fine ship repair business and recently completed a small ferry constructed from scratch. These yards are not however, currently capable of building sophisticated missile-armed warships such as frigates or destroyers although perhaps we should be encouraging them to expand their capabilities.

There remain unanswered questions about the construction of other ships the RN will need in the near future.  When and where will the vessels of the proposed Mine Countermeasure, Hydrographic, Patrol Craft (MHPC) project be built? Do we have the capacity in the UK to build the replacements for RFA Argus, Diligence & the 3 Fort class stores ships or will be forced to build them abroad?

While it may help keep the price of the Type 26 frigates down and BAE profits up, we may come to regret locating all UK warship building on one site.

Main image: The Govan shipyard probably soon to be closed. Image: Lovleyfigrolls via Flickr
Top left – end of an era, a section of HMS Prince of Wales leaves Portsmouth. Image: BAE Systems