Sir John Parker: The case for defence

Sir John Parker calls on David Cameron to sort out British industrial policy and gives the view from EADS on the proposed BAE merger. Margareta Pagano reports

Lunching with Sir John Parker is like stepping into a time machine, one that sweeps you back through the past 50 years of British industrial life. And what a life he has to tell of: in his twenties, Sir John was learning how to build ships at Harland & Wolff, then one of the biggest shipyards in the world. By his early thirties, he was travelling around the world selling tankers to tycoons such as Aristotle Onassis or to the Vietnamese in bombed-out Phnom Penh.

The Northern Irish naval architect and mechanical engineer was just 35 when the Government hijacked him out of Austin & Pickersgill, another big shipbuilder, to help with the restructuring of the British Shipbuilders Corporation; a business with 86,000 employees and losses of £100m.

Then, aged 41, Sir John was asked by Margaret Thatcher to go back into Harland & Wolff to rescue the yards, which were running out of orders, from bankruptcy. It was a violent and tricky moment in Irish history with bombs going off and hunger strikes, and Sir John says it was one of the most difficult decisions of his life. "I agonised before taking the job. Many of the people were still there in the yards that I had worked with. I knew there was only one way to save the business, and it would be tough; there were 7,500 people and they were cut to 3,500.

"But we did save the yards by doing a deal with the Norwegian shipping line, Fred Olsen. I learnt from my father that most things can be resolved.He would say 'if you are on rough ground: get a three-legged stool'."

It was a bloodying experience from which Sir John earned a reputation as a wizard of turnarounds; going on to take on similar roles at Babcock, Lattice and RMC among others. Since then, he has chaired five FTSE 100 companies and been a director of more than 50. All have been nitty-gritty industries that had engineering as their lifeblood – from coal-fired power station engines to gas pipelines.

He has seen it all: Labour's disastrous industrial policy of the 1970s, Thatcher's decision to take the axe to manufacturing in the 1980s, a strategy continued by the last Labour government. So when Sir John, who is also president of the Royal Academy of Engineering, says this Government is stuck in limbo and needs to come up with a coherent industrial strategy, it is time to sit up.

His argument is simple: unless UK Plc moves fast, we are consigned to irrelevance in a fast-moving global modern economy. For someone who has preferred to keep his sights at submarine depth, it is telling that Sir John has come up above the water line. But needs must.

He says: "It has been two years since this Government came to power but it still has not set out a vision for Britain's industrial future. There has been no leadership from the top – and by that I mean David Cameron – which has given a signal to society that Britain values industrial activity."

Sir John, who carefully adds that he's not in the least political, says the UK must do more to create a climate in which science, engineering, universities, schools and industry work together: "We have world-class industries – pharmaceuticals, life sciences, aerospace, for example – and we have to make sure we all work together to boost them."

By industrial strategy, he means a rebalancing of economic output towards the more productive services including IT, infrastructure, construction as well as the more traditional manufacturing industries.

Our time-machine is the dining room at Anglo American's headquarters just off Pall Mall, a few paces from a mini-museum displaying some of the precious metals the firm's miners have dug out. It's typical of the industries Sir John loves so much, although Anglo's problems in South Africa may be testing even his resilience. For he is still in the thick of it – the 70-year-old industrialist is chairman of the giant Anglo American, which has suspended 12,000 platinum workers following unrest over pay and conditions. He is also a non-executive director of EADS, whose £38bn merger with the UK's BAE defence manufacturer is provoking such political fury. How does Sir John, tipped as a potential chairman for a merged EADS-BAE, square the deal with his vision for UK Plc? Surely keeping the UK's only defence maker British-based and owned, should be essential in such a blueprint? "The reality is that aerospace and defence are industries have a long lead cycle and need to be strong to compete in world markets," he says.

"It's a pity the merger plans were leaked before we could publish the formal offer, as everyone – the press, and the politicians – has tried to write the prospectus before we have had a chance to publish it. Hopefully, we will soon."

"Together, the companies have a stronger future; a stronger balance sheet, a better and more modern governance to be able to compete with companies such as Boeing and new ones emerging in the East," says Sir John. But he can't say more because it is so sensitive, and the deadline by which BAE must ask for an extension is tomorrow. As to the political defence issues raised by the merger, which would leave the French and German governments with 9 per cent, he says: "This is a strong outward and visible sign that European governments can work together on defence across borders. The more sensitive issues, such as the Eurofighter, would be ring-fenced."

A blueprint for the UK, he says, doesn't have to be complicated; it can be set down on one sheet of paper, just as he does for boardroom strategy – if anything, the simpler the better.

"The Germans have a good expression for it," he says. "They talk about tilting government policy towards industry, towards sectors. That's what we should be doing too."

But improving our skills base and scientific education is one area that does need action; positive discrimination, if you will. Indeed, Sir John has spent much of his time as president of the Royal Academy in pushing his agenda to improve the role of engineering behind the scenes, but it's clearly not been enough.

Hot off the presses from the Academy is a new report, entitled Jobs and Growth: The Importance of Engineering Skills to the UK Economy, which shows how acute the shortfall in the number of engineers being trained in the UK really is.

Shocking, actually, showing that a 50 per cent uplift in the number of Stem (science, technology, engineering and maths) graduates is needed to meet even current output. "We have a shortfall of thousands of engineers: we must do more to encourage Stem studies," Sir John says. He gives the example of Airbus – part of EADS and one of the biggest employers in the UK, which needs 2,500 more engineers in the UK and Europe.

And what about Anglo American, where some investors are still niggling over the stewardship of Cynthia Carroll, the chief executive. Anglo's shares are lower than when Ms Carroll took over at the peak before the crash and when Xstrata tried to launch its bid.

But Sir John is totally loyal: "Cynthia is doing a good job." Some investors fear Anglo is open to another attack, and I ask him about the gossip being floated that Mick Davis, the chief executive of Xstrata – which is about to merge with Glencore – should be airlifted into Anglo.

It's rare to see the neat and composed Sir John pull a face. But now he does: "We couldn't afford him, in any way."

News
people
Sport
FootballGerman sparks three goals in four minutes at favourite No 10 role
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
Sport
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
athletics
PROMOTED VIDEO
Sport
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
music
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam