BAE reviews the future of its shipyards
Fears grow that consultants may recommend that defence group closes Glasgow or Portsmouth dock
Defence giant BAE Systems has drafted in management consultants to examine the future of its historic shipyards in Glasgow and Portsmouth, creating fears that thousands of jobs could be at risk.
LEK Consulting is understood to be reviewing all potential options for the BAE Systems Surface Ships division, including shutting one of the three shipyards – there are two 19th-century sites very close to each other on the River Clyde in Scotland.
BAE will be keen to impress that the options have not been fully assessed, as it is already under fire for making 899 people redundant at its Brough plant in North Yorkshire, which manufactures Hawk Advanced Jet Trainer.
The company has been forced to look at the future of the shipyards as the £5bn contract for two 65,000-tonne super-carrier warships draws to a close. The ships are due to launch in 2018 – most work would be completed sooner - and there are fears that subsequent Ministry of Defence programmes will not be enough to keep the yards' 7,000 employees busy.
An defence industry source said: "It looks like there would only be enough regular work for one shipyard [the Glasgow bases or Portsmouth] from three or four years time."
However, LEK is also thought to be looking at internationalising the business to help BAE win work overseas. Alternatively, the MoD could step in and help fund the yards.
The source ruled out a straight sale as a likely option. He said: "Who would buy them? There's no one to sell it to [in the current market]."
LEK's thinking could be muddied if Scottish First Minister Alex Salmond pushes ahead with a referendum on the nation's future. British warships are unlikely to be built in Scotland should Scots vote for independence.
However, a second source suggested there could be some hope with the forthcoming Type 26 Global Combat Ship programme. BAE is already designing the ships, which will be built at the rate of one per year from 2020.
The FTSE 100 company, led by chief executive Ian King, is no stranger to controversy. In 2010, BAE paid fines totalling nearly £286m in the UK and US, after pleading guilty to charges of imperfect accounting practices and false statements in relation to contracts in Tanzania and Saudi Arabia.
A BAE spokeswoman said: "LEK are working with us. We do bring in consultants to work with us from time to time. This is analytical modelling to support normal business planning activity."
- 1 Bill Clinton portrait features Monica Lewinsky reference, artist admits
- 2 What happens to your body when you give up sugar?
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
Bill Clinton portrait features Monica Lewinsky reference, artist admits
Japanese island overrun with cats after population explodes
China's 'Inconvenient Truth': video exposing country’s smog crisis watched 100 million times
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
New theory could prove how life began and disprove God
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
This is what it's like to be dead, according to a guy who died for a bit
Durham Free School: 'Creationism taught at' free school facing closure
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...