26.09.2004, 17:34
Zitat:BAE plans to merge UK naval shipbuilderslink:
By Sylvia Pfeifer and Robert Peston (Filed: 26/09/2004)
BAE Systems, Britain's largest defence contractor, has reached outline agreement with the Government on a proposal to merge the country's naval shipyards.
Under the proposal BAE would merge its three shipyards - Govan and Scotstoun on the Clyde, and Barrow-in-Furness - with yards owned by VT Group, Babcock and Swan Hunter at Portsmouth, Rosyth and Wallsend respectively.
Govan is one of shipyards that may be merged
BAE's yards alone employ some 5,300 workers and, if combined, the six yards would employ about 10,000 - comprising almost all of Britain's warship building capability. BAE would probably end up with some 50 per cent of the merged entity.
"The Government is signed up for it," said an executive close to the negotiations. "It's the best way of retaining a proper shipbuilding capacity in the UK."
The Ministry of Defence is developing a national shipbuilding strategy for Britain. The industry is keen to smooth out the traditional peaks and troughs in procurement and executives have warned that the current glut of large defence programmes could be followed by a famine.
Instead, they want to spread the work from major programmes - notably the Type 45 frigates, the £4bn aircraft-carrier project and the Military Afloat Reach & Sustainability project for "logistics" ships - over the next two decades.
The programmes would be allocated to the yards in a merged company on a planned basis, without the cut-throat competition that has characterised recent orders.
The strategy will be discussed by the shipbuilders and government officials on October 11. One executive said: "There are a number of options being considered - collaboration of all the yards, joint ventures or one incorporated joint venture led by a separate management company.
"But we have to get the Government to agree that programmes will be allocated and not competitively tendered. That is fundamental to any deal and we will then decide how to structure it."
Last night industry analysts warned that a full merger could be stymied if BAE insisted on holding 50 per cent of the enlarged entity.
Gordon Campbell, the chairman of Babcock, said: "I think the concept of the four shipyards working together in a consortium with a stable programme would be advantageous to everyone. We would be open-minded to the concept of a merger but it would be very difficult to agree valuations."
Paul Lester, the chief executive of VT, said: "We are very supportive of a collaborative approach to the industry that recognises the needs of the long term for the customer as well as the skill-base for the industry."
BAE's proposal comes after Mike Turner, the chief executive, signalled earlier this month that it was unlikely to proceed with the sale of its shipyards pending the outcome of the discussions.
BAE said in April it was seeking offers for its yards as it was unable to make a profit from them under the Government's current procurement policy. The yards are not expected to move into profit until 2008 despite having an annual turnover of up to £750m.
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