Swan Hunter awaits MoD lifebuoy

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The Independent Online
WORKERS at the Tyneside shipbuilder Swan Hunter wait to hear their fate this week as the Government prepares to announce whether it has won a life-saving order, writes Russell Hotten.

Details of which shipyard would be given the pounds 35m- pounds 40m contract to refit the auxiliary ship Sir Bedivere were left out of last week's announcement of Ministry of Defence cutbacks because of its sensitivity.

VSEL, Devonport, Rosyth and Yarrow have also tendered and all desperately need work to secure employment.

The Tyneside yard is in receivership, but the French group Constructions Mecaniques de Normandie has agreed to buy Swan Hunter if it is given this order.

A written answer is expected later in the week - before Parliament goes into recess on Friday.

If the business goes elsewhere the 900 people still employed at Swan Hunter will be made redundant in November when existing refit work is completed. Fred Henderson, chairman of CMN Support Services, said: 'If the order goes elsewhere it means the end of shipbuilding on the Tyne.'

Devonport, which has teamed up with VSEL, the submarine builder, to bid for the Sir Bedivere work, believes the contract would save about 250 of 850 redundancies. As the wait continued, shipbuilding nations early yesterday made an agreement after five years of talks to scrap subsidies to their shipyards, but France rejected the deal.

The accord between officials of the US, European Union, Japan, Korea and Nordic states was hammered out at the Organisation for Economic Cooperation and Development and is seen as the widest plan yet to impose discipline on the ailing industry.

'If we had failed there would have been a subsidy war, that is quite clear,' said Staffan Sohlman, Swedish ambassador to the OECD, chairman of the talks.

The unsigned agreement must be ratified by all participants and would come into effect on 1 January, 1996. But France said it would oppose the pact inside the European Union.

If ratified, it would be the first legally binding international trade pact ever negotiated by the OECD.

(Photograph omitted)