BAES Sea Systems Restructuring
Sea Change for BAES

Last February BAES made a press announcement about changes to the shape and size of the Sea Systems business. The headline was that just over 1000 jobs would be lost, the overwhelming majority at Barrow-in-Furness – 765 – with others at the yards on the Clyde, and at Farnborough. But behind these bald figures, there is evidence that there is certainly a sea change underway within the Sea Systems operation.

So, why – now – is it astute to cut the workforce when there is still a need – perhaps an urgent need – to get the Astute SSNs back on track?

The official line is that with the AOs now on sea trials, and having handed them over to the Royal Navy, with the landing ships HMS ALBION [pictured left] and HMS BULWARK also on accelerated trials prior to official arrival in-service, the need for a large workforce is not pressing as it was.

And the company's press release says:

"The principal reason for the shipbuilding job losses is the very significant drop in workload the shipyards are experiencing, with no prospect of an increase on a scale large enough to compensate within at least the next four years, despite the considerable efforts of the company to find fill-in work".

Methinks a tiny slight slap at MoD for not pushing enough business through the system, especially with regard to the Astute project (see elsewhere in this edition). But also an implicit criticism about a generally small level of naval orders that might provide a stable business platform for BAES Sea Systems (also, see elsewhere in this edition).

CRISIS OF CONFIDENCE?

But there is a striking announcement within the press release that appears to show a greater issue within BAES. It is announced that all Type 45 AAW cruiser work is now to be concentrated on the Clyde, presumably at Scotstoun and Govan. So what? Well it was the case that after the first of class the centre for final assembly of the Type 45 was to have been moved to Barrow, and the future of the Scottish yards was going to be left somewhat hanging in the air.

That this is changing is no trivial matter. Defence Analysis gets the very firm impression that this change is both an endorsement of the skills and capabilities of the team at Scotstoun, and almost a ringing lack of confidence in Barrow as a yard. To lay this theory out: Astute [pictured left] is still in some trouble, although the situation is deemed as being more or less under control after talks with the MoD; but Barrow has not shown great skill over either the LPD(R) or the AO programme.

While it might be able to place some blame for the Astute programme's problems on the fact that the design wasn't its own – it was a Marconi one – it cannot say that about either of the surface ship programmes – these are Barrow projects through and through.

But this then leads to a feeling – backed up by some talk both within BAES and MoD – that Barrow has lost the capability to build surface ships. And the decision to move assembly work to the Clyde might also be recognition that the old Yarrow team is the one that managed to run the Type 23 programme so that each and every ship it delivered was (excluding Government Furnished Equipment) cheaper than the last. This is still believed to be a first in western naval design of late.

As the press release quotes the new Sea Systems director, Brian Phillipson, as saying, "The consolidation of the Type 45 build programme on the Clyde … will similarly de-risk Type 45 and further ensure the success of this excellent programme". Far be it for Defence Analysis to say but the last few words from Phillipson seem to say, "My Type 45 programme is going very nicely – and I don't want louts from Barrow messing it up!"

That there has been this announcement, and that Phillipson is quoted, is seen as relevant and important by Defence Analysis. He has only been relatively recently appointed as the director of the Sea Systems Division, rising up from being the "mere" programme manager of the Type 45. This reorganisation – which the company stresses has nothing to do with the CVF decision, really has the stamp of Phillipson's first chance to undertake major action to restore the Sea Systems Division back into a stable state.

There is still one question that remains after this statement. It is all very well to say that Barrow will be developed as, "… both the company's and the Nation's Centre of Excellence for submarine building, for Astute and subsequent generations of submarines" – but the same release says that there isn't enough work coming from the UK government, which is causing job losses.

This has led to some foreseeing a situation in which BAES might try to sell off Barrow, or enter into a state where the government is forced to almost re-nationalise the yard, to keep submarine expertise alive. Whether anyone would wish to buy Barrow is questionable. And whether government can be pushed into either entering some form of "partnership" over submarine building, or into taking over the yard, is highly controversial. Only time will tell.

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• Royal Navy Escort Numbers - AND WHEN THEY GOT THERE …
• US Army Budget 2003 - HE AIN'T HEAVY …
• BAES Project Problems: The Aftermath - MORE RUMBLES IN THE JUNGLES
• European Naval Programmes - NOT A BAD BUSINESS
• Comparison of BAES Sea Systems and DCN - ON DIFFERENT PATHS?
• Nimrod and Astute Programme Histories - SPREAD THE BLAME?
• Nimrod v Typhoon Procurement Policies - GOOSE AND GANDER TIME?
• British Army Light Forces Anti-Tank Guided Weapon - THE BED HAS BEEN MADE
• UK Deployment to Gulf Region - SHOWING THE POWER
• Kuwait Deployment: Early Lessons - KEEP IT ALL AT SEA
• DEFENCE INDUSTRY NEWS
• DEFENCE DIVERSITY

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