BAE Systems looks set to sink one of its three shipyards

Posted on 26 Nov 2012 by Tim Brown

BAE Systems has confirmed it is considering closing one of its three major shipyards after it completes construction of the UK's two new aircraft carriers.

The company’s group managing director, Nigel Whitehead, told the Sunday Telegraph a decision would be made by the end of the year.

The firm was working with ministers to explore all options for maintaining the UK’s shipbuilding capability, he said.

The future of its three main shipyards – in Portsmouth, and Govan and Scotstoun on the River Clyde – after two new aircraft carriers are completed has been in doubt for some time. There are fears there will be insufficient work available to keep all three busy and profitable as cuts in defence spending take their toll.

“The issue is how to consolidate… but make sure that we’ve preserved the capability to design and manufacture complex warships,” Mr Whitehead told the newspaper.

“We anticipate that there will be a reduction in footprint and we anticipate… that part of that might actually be the cessation of manufacturing at one of the sites.”

BAE Systems has 3000 workers at Govan and Scotstoun on the Clyde, with up to 5000 at its Portsmouth works. The Clyde yards have been building the latest Type 45 destroyers and sections of the aircraft carrier Queen Elizabeth for the Royal Navy.

Earlier this year the company appointed consultants to carry out a review of the business. The firm’s yard in Portsmouth is widely believed to be the most vulnerable, with 1,500 jobs at risk.

However, two bases on the River Clyde, at Govan and Scotstoun are also under scrutiny. BAE Systems says it is working closely with the government to explore all options for maintaining the UK’s shipbuilding capability.

The Ministry of Defence says that it is up to the company itself to decide how best to deliver the naval vessels it has already agreed to produce.

The announcement comes after last month’s collapse of the mega-merger between BAE and Airbus parent EADS after talks were thwarted by political deadlock.

The UK government had wanted its counterparts to agree to limit their influence in the merged firm in order to maintain BAE’s strong working relations with the US Pentagon.