Shipyards' Futures Saved by £10B Deal

The future of shipbuilding in Scotland was secured last week when three yards on the Forth and the Clyde were handed the biggest warship order in Royal Navy history, safeguarding thousands of jobs and creating work for the next 15 years. UK MoD announced that the Govan and Scotstoun yards on the Clyde will manufacture the largest section of two aircraft carriers which will then be assembled at Rosyth dockyard in Fife. The announcement represents the UK’s largest single naval procurement, production and support programme in decades, with an overall government budget of £10 billion which will see servicing and maintenance on the ships carried out for up to 50 years.

Construction of the ships, which will be three times as big as any currently in service, is expected to start in 2006. Four yards, Govan, Scotstoun, Vosper Thorneycroft in Portsmouth and Swan Hunter in Tyneside will be building the component parts, which will then be taken to Rosyth to be fitted together. Two companies were in the running for the order: BAE Systems and Thales, a French-owned defence specialist. Unable or unwilling to give the contract to just one of the bidders, the MoD awarded the contract to both companies, but named the shipyards where the carriers had to be built. BAE Systems, which owns the Govan and Scotstoun yards, was named as the prime contractor, effectively giving its management the lead role, but it has been told to adopt the Thales design concept.

The French firm will also be given about a third of the work. The two companies now have a year to put aside their differences and form an alliance, moulding designs drawn up by one company to fit the shipyards of another. The contract will safeguard an estimated 10,000 jobs UK-wide for the next 15 years.