Fears for future of warship yard (From Hampshire Chronicle)

Fears for future of warship yard

10:54am Monday 6th July 2009 in

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MAJOR question marks have again been raised over the future of a Hampshire warship factory once it has completed work on two new aircraft carriers for the Royal Navy.

An agreement due to be signed within weeks will ensure defence work for Clyde for the next 15 years, Scottish Secretary Jim Murphy has said, meaning the Portsmouth yard is more likely to face the axe when the carriers come into service in 2016 and jobs dry up.

A leaked memo from owner BVT surface Fleet, a merger of Hampshire defence firms VT Group and BAE Systems’ shipbuilding interests, suggested the company was going to close two of its three shipyards when the £5 billion carrier job was complete.

The work guarantee makes it unlikely that the Scotstoun facility in Glasgow will shut, causing celebrations on the Clyde but triggering concern in Hampshire.

The author of the memo, BVT surface fleet chief executive Alan Johnston, insisted the document was no more than the type of “worst case scenario planning” conducted by all prudent firms.

He said: “What we are looking at in these stolen documents are planning scenarios.

“We are looking at planning scenarios on the downside, but our aim is to drive for the upside of this business – and we see a very solid future here on the Clyde.”

The leaked memo contemplated the period after work on the two giant aircraft carriers is finished, and said MoD requirements could be delivered from a single BVT facility – and that the MoD had “committed to underwrite the necessary closure costs”.

The “terms of business agreement”

to be signed shortly is a 15- year pact setting out how the MoD and the company will work together.

It was expected to include provision for up to 18 new generation frigates to replace the Type 22 and Type 23 vessels.

Mr Johnston said: “First, this is the first time in a generation that a shipyard can look seven years forward and see a steady full order book.

“In terms of the agreement, I am confident we will have those ships in design and construction over the next few years, ready to start steel cutting in 2013.”

Meanwhile VT has taken more steps towards selling its 45 per cent stake in BVT and exiting its traditional shipbuilding business by seeking approval for the £380m sale from US and European regulatory authorities.