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 The truth about 'girl things': Three cheers for Heather Watson's honesty
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 5 Men behaving badly: Urinating while standing, 'manspreading' and the gendering of selfishness
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
Ellen DeGeneres leads Johnny Depp, Gwyneth Paltrow and Paul Bettany in revealing game of Never Have I Ever
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...