Focus: Rebirth of Birkenhead days of glory

HMS Unicorn, the last vessel to be built at the Cammell Laird shipyard in Birkenhead, sailed away up the Mersey six years ago to the strains of Vera Lynn's "We'll Meet Again".

Then, that appeared more forlorn hope than expectation. The completion of the Unicorn had seemingly finished 165 years of shipbuilding at the Birkenhead yard. Indeed, the crew on the last of three tugs escorting the ship up the Mersey held aloft a banner that read: "The End".

Three weeks ago, that verdict has proved to be spectacularly faulty. The yard has qualified for shipbuilding intervention fund subsidies and an announcement is expected any day confirming that commercial vessels are to be built again at Birkenhead.

Even after the Unicorn had disappeared from sight there was still plenty of life left in the old place. Far East mass production might have made profitable shipbuilding an almost laughable proposition in Britain but Cammell Laird commanded one of Britain's biggest dry docks.

A small team of thrusting entrepreneurs did see the opportunity. Coastline Industries was a small ship-repair outfit employing 200 on the opposite bank of the Mersey when it bought half the Birkenhead yard for pounds 2m from VSEL. They renamed themselves Cammell Laird Holdings, and over two years quietly brought a strong order book and 2,000 jobs back to the area. Now the shares are eight times the pounds 1 debut price when the business floated in 1997. The company's hi-tech repair work is less price-sensitive and protected from Far East competition.

This is more than a British yard on its knees ever dared hope for. For Birkenhead, a place that brought the world the world's first steel vessel and first Ark Royal, repairing ships will never hold a torch to the cachet of actually building or selling them. That's why an announcement, a week ago, that Cammell Laird has purchased three vessels (a cruise liner, offshore supply ship and diving support vessel) has caused excitement. This deal was opportunistic - the ships were being sold off cheaply by receivers - but it was strategic too. Laird doesn't just want to be the valet any more, fixing and converting ships to owners' requirements. It wants to tap the ship leasing and broking markets opened up by offshore oil firms and cruise liner operators who either don't want the administrative hassle of sourcing vessels or the capital burden of them sitting on their balance sheets. This is a definite notch on a steady climb towards restored pride in Birkenhead.

And the granting of intervention funding status to Marconi Naval Systems, which operates a smaller part of the same yard, is expected to enable Marconi to start building high-speed ferries in a joint venture with Isle of Wight ferry builder FBM Marine. Here, too, a decision is expected.

But this is not a story confined to Merseyside. Cammell Laird not only trebled the size of its facility at Birkenhead, it has also picked up the lease to operate the government-owned dry docks and quayside on Gibraltar, a perfect spot to pick up Mediterranean ship repair business.

Last year it also alighted in the North-east, buying ALB Holdings from Albert LeBlond, a colourful entrepreneur who had moved into ship repair after many years at sea. Cammell Laird had become the biggest ship repair outfit in the business and simply run out of capacity. The ALB deal brought in another huge dry dock, the biggest on the east coast at Hebburn on the Tyne, and three similar facilities on the Tyne, Wear and Tees.

Now it can supply vessels to offshore oil mining firms who are exploiting new technology to sink wells at depths of 8,000ft. The wells are too deep to build an oil platform around and demand floating drilling and storage vessels, complete with satellite systems and positioning technology. Redundant deep sea trawlers are perfect for this job and Laird has made money by converting them.

For all this innovation - plus pounds 4.2m profits last time - the company is still haunted by the old image of industrial strife. "We're always `the firm that proved there's life after death'," says the finance director, Brett Martin. "We're tarnished with the shipbuilding brush." A little over-sensitive, maybe, since the company's niche strength is built upon the traditional, pre-automation skills that gave the Mersey and the Tyne their name.

Its success is as much down to hundreds of re-employed dockers whose old British skills, such as steel-working, come in handy when you're repairing specialist ships, as it is to spotting a niche and buying the dock space to exploit it at the right time.

Reinvigorating dyed-in-the-wool dockers is a delicate business, especially when you're an accountant who admits to minimal marine experience, as Mr Martin did. An affable Manxman in his 30s, he is clearly the motivator and communicator of the outfit. When the north-east deal was done and Laird found itself with a workforce of 1,000 ex-dockers, they sent Mr Martin north for the winter to deal with men steeped in a hire-and-fire culture. "There was no sense of loyalty," he says. "When you turned up in the morning there'd be guys walking down to the ships with Amec written on the back of their overalls. The next man would walk past with A&P on his. You can't change that by just giving them all Cammell Laird overalls but you can change it over a couple of years."

Mr Martin says he is trying to make them all understand "the Cammell Laird story." It was not so tricky when the Mersey yard was taken over, since existing Coastal Industries people were a part of the set-up from the start. It's an odd mix now; ship-repair men, steeped in the technology, and ex-dockers, getting used to a culture of empowerment. Even the Laird boardroom blends financiers such as Mr Martin with the shipyard men. The managing director of the Birkenhead yard is a dock apprentice who made it all the way. There's no sentimentality about the old days, mind. You won't find framed black and white photographs of the Ark Royal on the Laird boardroom wall, just a watercolour of a Panamanian-registered seismic surveying vessel.

The Laird management have moved from the yardacross the water to Liverpool and a sophisticated glass waterfront building they share with the money men from KPMG and PricewaterhouseCoopers. "At the yard, if the crane needed painting or there was a problem with the car parking, we'd know about it," says Mr Martin. "We needed to get away from there to think." The other half of the Laird partnership is chief executive John Stafford, another financier-turned-mariner, who founded Coastline Industries. He is Mr Martin's opposite, private to the point of reclusive and he has a tough reputation. Mr Stafford carries the burden of convincing international oil companies that British workmanship can be counted upon for projects off Brazil, West Africa and the Shetlands.

"In the US deep South they still carry a 1970s notion of Britain," says Mr Martin. "They think we're closed for business and if we're open, we're on strike." If Mr Stafford pierces the gloom of Cammell Laird's history to earlier days, he will find a rich history of trendsetting to tell the Americans. Cammell Laird probably built a wider range of vessels than any yard. In 1865, the 6,621-ton Agincourt, first armour-clad warship for the British Admiralty, was completed. Ark Royal disappeared down the slipway in 1938 - she was the first British warship laid down as an aircraft carrier. HMS Devonshire, in 1962, was Britain's first guided missile destroyer. Famed merchant ships include the second Mauritania, completed in 1939. Even in the offshore industry, the yard led the way. It built the the world-class semi- submersible drilling platform Sovereign Explorer in the early 1980s, and in 1988 Birkenhead was the only shipyard building surface ships and submarines at the same time.

The echoes of the past do not stop with the search for technology. The lobby for government help is just as keen - and unforthcoming - as it has always been, says Mr Martin. In 1993, VSEL said shipbuilding intervention fund status would have been a saviour, allowing the yard to compete evenly with east German shipyards that had secured 36 per cent subsidies. "Intervention funding can be granted for 4.5 per cent of ship repair costs," says Mr Martin. "We're in a labour- intensive business and we want to face our competitors on an even surface." It's a word-for-word rewrite of a 1980s script. Cammell Laird is leaving the recent past where it belongs.