The toughest job in town

As head of VSEL, builder of the Trident submarine, Noel Davies earns pounds 165,000 a year. He deserves every penny. Apart from seeing out what is left of the Trident programme, his main task is to try to find work for the thousands of employees at his isolated Barrow-in-Furness shipyard. With him ride the hopes of a whole community, desperate to survive.

Nobody - not even the steel managers at Consett - has experienced anything quite like it before. To understand why, you have to know Barrow. Tucked away on the southern tip of Cumbria - at the end of the A590, 'the longest cul-de-sac in Britain' - it is a place of 60,000 souls, the vast majority of whom depend on the shipyard for their livelihood.

The shipyard and its myriad small service businesses employ over half the working population. The next biggest business, a paper mill, has just 400 on its payroll.

If the shipyard goes, Barrow will become Britain's biggest ghost town. Already there are signs of what the future holds, now the Cold War is dead and buried.

Since Mr Davies became chief executive at VSEL less than three years ago, he has cut the workforce from 14,000 to 10,000. But he is far from finished. In fact, the cuts may have only just begun.

Such has been the impact of the peace dividend on VSEL, left with no big orders beyond completion of the Trident programme, that he has no choice but to cut, cut and cut again.

His original plan of a workforce of between 7,000 to 9,000 was, he acknowledges, 'a bit macho'. Instead, 'in 1997, on current contracts, the size we are going to go to is about 4,000'. He corrects himself: 'No, the size we will be if we don't do anything will go down beyond 4,000 to 3,000 to 2,000.'

His dilemma is being repeated in defence industry boardrooms up and down the country. But what makes Mr Davies's task so especially cruel is Barrow itself.

Barrow makes only warships. Most other industries - steel, cellophane, textiles - have been and gone. Warships, or rather submarines, are what remains - and what the town is famous for.

In Barrow, VSEL is still known by everyone, including Mr Davies when he is not thinking, as Vickers, the name of the shipyard's former owner. There is just nowhere else to work. The nearest alternative large employer is BNFL, 40 miles away up the Cumbrian coast. And anyway, BNFL has problems of its own at the moment.

You lose your job in Barrow and you either stay and do nothing, or, as Norman Tebbit would recommend, you get on your bike and ride a very long way. Pages and pages of houses for sale in the local paper testify to that.

The roads that are now cluttered with estate agents' boards add to the poignancy, providing a reminder of the days when people were so proud of the ships they built that they named their streets after them: Mikasa Street; Orontes Avenue; Himalaya Avenue; Bermuda Crescent.

Vickers dominates every facet of Barrovian life. Teams in the local football league reveal their places of work: Ship Drawing Office; Engineers; Welders. One of the largest car dealers in the town is the Invincible Motor Co.

Everywhere, in the numerous pubs and working men's clubs, in Dalton Road, the main shopping street, the huddled terraces and the managers' houses at Hawcoat, up on the hill, 'the yard' exerts a hold on people's lives.

In many families, generation upon generation have worked at Vickers. The son is an apprentice, daughter is a secretary, father is a craftsman, grandfather has retired.

To add to the sense of domination, overshadowing everything is the enormous, green, metal shed in which the Trident submarines are assembled. Once you could read the time on the town hall clock from anywhere in the town. Now, the looming building, known as 'Maggie's shed' or officially as 'the DDH' or Devonshire Dock Hall, gets in the way.

Nothing brings home the agony and sheer arbitrariness of it more than a scrap of paper thrust into my hand by a Vickers manager. Headed 'Breakdown figures', the handwritten sheet of A4 comprises two columns: 'Ship' on the left, 'Engineering' and 'Staff' on the right.

Below is a list of jobs to go. They include: 15 joiners, 11 drillers, 12 welders, 18 shipwrights, 16 caulkers, 10 painters from ship; 57 machinists, 3 foundry dressers and 16 labourers from engineering; 3 managers, 10 grades E to G, 11 A to D and 6 'to be identified'.

What the list, just another scaling-down exercise, does not show is another group of casualties, the schoolboy and schoolgirl apprentices.

Earlier this month, Mr Davies drove the sharpest nail into Barrow's coffin by announcing that 250 apprentices who had completed their training would not now be offered full-time jobs. In addition, no apprentices would be taken on for the foreseeable future.

At a stroke, he snapped the chain of continuity that has existed in Barrow since the Great Depression in the Thirties. It went like this: you went to secondary school, got some CSEs, joined the shipyard as an apprentice, bought a motorbike, qualified for a job for life, bought a car, got married, had children, who, in due course, went to school, got some CSEs . . .

Not any more.

Sitting in his office on a balmy, sunny day, Mr Davies acknowledges the scale of the problem. He does not deny that his could be counted as the worst job in British industry at the moment. 'I've not bothered to work out who has got a worse job than I've got,' he says, smiling. And he adds: 'It has its compensating factors, like being head of a company which is leading the most exciting engineering project the country has seen in recent years.'

And he adds: 'It is possible to manage a business in decline and gain satisfaction. The day I forget the pain my actions cause to the individual, I am as dead as a dodo. But I can't let emotions override business.'

There is no denying, though, his sense of disappointment. Above the hubbub of the shipyard, still going strong for the time being on Trident, he says: 'It always looked as though there would be problems for us in the post- Trident era. But we reasonably supposed defence procurement would go back some way towards its pre-Trident level.'

Mr Davies and his colleagues read the crystal ball wrong. Much store was set on the company winning the contract to build the SSN 20s - a new generation of hunter-killer submarines. But in the post-Cold War world that project has been abandoned. The best the yard can hope for now is to make an improved version of the current Trafalgar class.

Another blow was the failure to land the order for Type 23 frigates. A third was the refusal of the Government to order further Upholder- class diesel-electric submarines from Cammell Laird, VSEL's other, much smaller yard at Birkenhead, on Merseyside. As if Barrow was not enough, Mr Davies has been trying for 30 months to find a buyer for Cammell Laird - to no avail.

He is resigned to closing the yard as a ship- building operation and, at best, selling off parts of its space to other users.

The foreign market for submarines and warships has all but dried up, but Mr Davies refuses to be beaten. 'I do have confidence for the future of VSEL and Barrow,' he says.

With his lean frame and swept-back hair, he cuts an energetic, sparky figure. A former boss describes him as being a complex character, with 'amazing tunnel vision'. Once his mind is made up, apparently, he will not be swayed into doing anything different. Perhaps too dogmatic for his own good, he is, nevertheless, says his ex- chief, 'very courageous'.

He needs to be. 'If we manage things well, we will fall to a plateau and rebuild,' says Mr Davies. 'If we manage badly we will go the other way.' He has devoted many hours to exploring the alternatives.

Three areas of business have been identified - offshore oil and gas rigs, environmental equipment, and power generation plant - and four routes forward: acquisition; partnerships; bidding for work and using current facilities, and research and development. 'We've done studies in all four,' Mr Davies claims.

'As far as an acquisition is concerned, it must be well-established and must have a significant possibility of enhancing employment prospects in Barrow.' That, he says, 'is the killer'.

In order to buy something that could provide jobs in the sort of numbers Barrow needs, VSEL would need to buy the business at the current market price, close it down and transfer it, lock, stock and barrel, to Barrow.

'Listen,' says Mr Davies, 'cash is not the problem. We could buy a company making widgets in Kidderminster tomorrow, but unless it had substantial growth prospects it doesn't help us in Barrow.'

He has bought one company, in Cumbernauld, Scotland, that makes 'Christmas tree' towers for oil rigs that could, if all goes well, create 200 jobs in Barrow.

'We are looking at a number of modest acquisitions in the offshore sector which will only add a modest number of jobs in Barrow.'

What else? 'We've had several discussions with Japanese suppliers wanting to come to Europe to set up joint ventures in areas like process plant, cement plant, pumps and diesel traction engines. Often we find we can make 'em but we can't sell 'em.'

Thanks to the crazy decision taken by British Shipbuilders, the nationalised shipbuilding overlord, that VSEL should concentrate on submarines and not much else, says Mr Davies, 'we are known as the company that withdrew from its commercial markets'.

Barrow, he added, is 'paying the price for once being part of British Shipbuilders, for a government edict that said Barrow must just build subs and not compete for other overseas markets. And do the four Tridents - if you invest in superb facilities and train for nothing else.'

Twenty years ago, VSEL did a lot of general heavy engineering. It wasn't great business and the company did not grow rich on the back of it, but at least it was something different. 'Now,' he says, with masterful understatement, 'we are more specialised.'

The yard has one customer, the Ministry of Defence, with its special requirements. Over time, VSEL workers have grown accustomed to one set of rules. 'If a new customer wants a quantity of weld different from a submarine hull, how the hell do we change the welder from one to the other?'

Excitement at landing a contract to build a new piece of equipment for an oil platform soon gave way to depression, when management realised it would cost twice as much to build as they had thought. 'We did a detailed analysis of where we had gone wrong and think we can do better next time,' Mr Davies says. But VSEL has been dealt a double whammy. In the cold wind of the post-Cold War period, the economy has moved into deep recession. The offshore industry, on which VSEL was pinning high hopes, has plunged into crisis.

'We've been clobbered by the marketplace,' Mr Davies agrees. 'The business of trying to diversify is very difficult.' He appears distracted. 'Halfway through the five-year plan we are not making the progress we thought we would. We may have been guilty early on of trying to chase everything . . .'

It is a mystery to a layman why Barrow, with its docks, cranes and slipways, cannot build ordinary ships. Maggie's shed, surely, could be used for other things? 'It's only 22m wide.' He glances out of the window, towards the mothballed slipways. 'They are still available. We could still use them.'

In an effort to shift some of the burden, VSEL is working with the local council and development agencies to try to bring large alternative employers to the town. In the present climate, they face a Herculean struggle.

So far, the Government has not stepped in. But, Mr Davies says, 'there comes a point where there is a duty on the customer. It is not contractual or legal, but moral.

'There are two sides to any bargain and this community has provided its share in spades. A large element of blame for what has happened belongs to the Government. It must recognise it took us this way and now it must take us another.'

Meanwhile, he is left to cope the best he can. 'It is like putting your toe into the water and not knowing how deep it is.'

(Photograph omitted)