The move followed nearly three months of talks to save the yard. After delaying the announcement yesterday morning, Kvaerner said laterthat it had run out of time. It was "surprised and disappointed" that no offer for the yard had been forthcoming. The jobs were first placed under threat when Kvaerner announced it was selling its worldwide shipping interests earlier this year.
Failure to save the yard would be a public relations disaster for the Lib-Lab coalition in Scotland. The Government set up a special committee, headed by Sir Gavin Laird, which was supposed to rescue the yard, not least because it is situated in the middle of a highly important Scottish constituency where Labour and the SNP regularly fight for dominance. Loss of the yard would be heralded as a mark of Labour's impotence in government.
For many weeks, GEC Marconi has been expected to be the white knight poised to save the yard. However, talks stalled last week with the yard's Norwegian owners because Kvaerner suspected that GEC planned to hang on to Govan only long enough to complete an order for two Royal Navy oil supply ships being built for the Ministry of Defence at the GEC yard in Barrow-in-Furness, Cumbria. Kvaerner was concerned that once the work, which is 16 months behind schedule, was completed at the Glasgow yard, the workers would be laid off and Kvaerner would be stuck under the agreement with the cost of redundancy payments. GEC's proposed takeover of the yard is understood to include the requirement that Kvaerner remain responsible for redundancy payments for up to five years.
Last night Jamie Webster, union convener for the yard, said that the redundancy announcement was "disappointing but not unexpected". The company is now seeking 250 volunteers but, if names are not forthcoming, the quota will be selected by the company and they will lose their jobs on 16 July. Mr Webster said that he did not expect anyone to volunteer.
"I now believe that over the next few days the workers will face a test of their resolve. I do not think it will be found wanting," he said. Kvaerner held out some hope, saying that the redundancies could still be cancelled if GEC made an offer for the yard before the deadline of 16 July.