Shipbuilding yard's future is in doubt (From Hampshire Chronicle)

Shipbuilding yard's future is in doubt

6:10am Thursday 2nd July 2009

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By Gareth Lewis »

THE long-term future of the former VT shipbuilding yard in Hampshire has been thrown into doubt by a leaked memo.

Two out of three shipyards belonging to BVT Surface Fleet, the joint venture company which took over the running of the Portsmouth yard last year, face closure within a decade, according to the document.

The other two yards are in Govan and Scotstoun in Glasgow, Scotland.

Any closure could be a disaster for the south Hampshire economy where as many as one in 12 people are reliant for work on the Portsmouth naval base.

It’s the second leak for BVT in as many days after an earlier memo revealed costs for the project had swelled by a billion pounds, from £4 billion to £5 billion.

The latest memo is said to show BVT Surface Fleet’s chief executive Alan Johnston forecasting savings of as much as half a billion pounds from the closure of two out of the three yards after the contract for two aircraft carriers is completed in 2014.

BVT was formed by the merging of Hampshire defence giants BAE Systems and VT Group’s shipbuilding operations and was designed to smooth the manufacture of two Royal Navy aircraft carriers.

But once the Queen Elizabeth and Prince of Wales enter into service in 2014 and 2016 respectively, there will be reduced demand for Royal Naval shipbuilding.A BVT spokesman said that he could ‘not deny’ that a memo existed.

The memo is said to show BVT Surface Fleet’s chief executive Alan Johnston forecasting savings of as much as half a billion pounds from the closure of two out of the three yards after the contract for two aircraft carriers.

It is also is reported to state that the Ministry of Defence is willing to finance redundancies in order to scale down Britain’s capacity for building warships.

Around 1,300 Portsmouth workers will build hull sections of the carriers, including hundreds who are based in Southampton, a legacy of VT’s original Woolston site. A further 1,700 jobs are expected to be created in the region in support roles.

BVT said it is not expecting to close any facilities in the ‘foreseeable’ future.

“BVT Surface Fleet has a solid order book for the next seven to eight years and is in the strongest position that the shipbuilding industry in the UK has seen for a generation.

“To that end, it continues to invest in designs, facilities and skills to secure the long-term future of both its Clyde and Portsmouth facilities.”

A spokesman for the Ministry of Defence said: “Negotiations with industry partners are still ongoing and no decisions have been taken, therefore, it would be inappropriate to comment further.”

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