He said the company, which was recently acquired by GEC, was investing in new processes and equipment and must aim for a reduction in costs of 30 per cent.
Staff were told that the management expected a big change in working practices at the yard as work on the Trident submarine contract comes to an end, and the company focuses on getting new submarine and surface vessel contracts.
Mr George said: "We must line up the terms and conditions of this yard with other yards with which we have to compete.
"The next step is to agree through the new culture and with the big investments we are making in new processes and new equipment to agree the way forward in terms of reducing our cost base by about 30 per cent."
Unions at the yard were left in no doubt yesterday that the company would adopt a hard line. "We intend to win quite a lot of work. Unfortunately no one owes us a living, and my first task is to make sure that as a whole we are competitive," the chief executive said.
Alan Robson, a union representative, said: "The workers are far from being optimistic because they have seen the massive reduction in the VSEL establishment with its worldclass technology and worldclass workforce. Now the workers are being told `Your future is bright', with 3,000 out of 5,000 being out of a job and all that expertise being lost."