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news
Does £100 million really soften the blow?
Centuries of historic ship building in Portsmouth will end with the decision by BAE Systems to axe 1,775 jobs at its yards in Scotland and England – ending shipbuilding in Portsmouth with the loss of 940 jobs, as well as 170 agency workers at the site.
Portsmouth will, however, retain repairs and maintenance work. The cuts follow a drop in work after the end of aircraft carriers work. Some 835 jobs are to go at yards in Govan and Scotstoun, on the River Clyde in Glasgow, and Rosyth in Fife and at the firm’s Filton office, near Bristol.
BAE Systems employs a total of 4,400 people in shipbuilding in the UK, 1,200 in Portsmouth and 3,200 across Govan, Scotstoun, Rosyth and Filton. The company said it had made the cuts because of a ’significant’ drop in demand. The defence contractor and the Ministry of Defence (MoD) have together announced measures which they hope will offset the effect
of the job cuts. Among plans is more than £100m of investment to expand the dockyard in Portsmouth.
A statement by BAE Systems said: “Shipbuilding operations at Portsmouth will cease in the second half of 2014. Subject to consultation, Lower Block 05 and Upper Blocks 07 and 14 of the second Queen Elizabeth class aircraft carrier will be allocated to Glasgow. The company remains committed to continued investment in the Portsmouth area as the centre of its maritime services and high-end naval equipment and combat systems business.“
BAE said it had agreed with the MoD “that Glasgow would be the most effective location for the manufacture of the future Type 26 ships“.
The £100m to be invested in Portsmouth will go towards expanding the dockyard to ensure it is ready for the arrival of HMS Queen
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Elizabeth and HMS Prince of Wales as well as the Type 45 destroyers which are based in Portsmouth. The MoD said under the terms of the new arrangements “Portsmouth will maintain its proud maritime heritage as the home of much of the Royal Navy’s surface fleet and the centre of BAE Systems ship support and maintenance business“.
Prime minister David Cameron said his thoughts were with workers affected: “We want our Royal Navy to have the best and most modern ships and the best technology. That means we will go on building warships on the Clyde, we will be announcing three new offshore patrol vessels, keeping that yard busy rather than paying for it to remain idle. In Portsmouth, yes there will be job reductions, but there are many more people involved in ship servicing than in ship building, so the workforce will go from 12,000 to 11,000.“
Portsmouth South MP Mike Hancock said: “The expertise is dedicated to shipbuilding. And once they disperse the workforce in various parts of the south I don’t think it’s going to be easy to put that back together.“
Southampton Test MP Alan Whitehead commented: “It isn’t just people in Portsmouth who will be hit, Southampton will suffer too, and it will radiate to skills, backup and assistance in the area just as it has with the Ford closure.“
Coming just weeks before Christmas and affecting apprentices who have just concluded skilled training, the impact reverberated across the Solent region.
Sean Woodward, Hampshire County Council executive member for economy, transport and environment, said he would support the Government providing a significant financial package to the city because of BAE’s decision.
Hampshire Chamber of Commerce, however, summed up the feelings of many when it described the situation as “devastating news for Portsmouth“.
See page 5
Firm doubles turnover with help from Dormen
Bay Engineering is set to double its turnover to £1 million after it was paired with a specialist mentor from Dormen – the Dorset business mentoring service which links experienced business people with companies. The Dormen service at most costs a £100 annual administration fee, as the mentors are unpaid.
Based in Weymouth, Bay Engineering was turning over £500,000 before the recession of 2008 and that dropped slightly in the immediate years afterwards. Managing director Darren Taylor then contacted Dormen, which suggested Frank Guinn as mentor, and the partnership has been a “spectacular success“.
Taylor, who along with Steve Balem established the company in 2001 following a management buyout, said that the main thing the mentor has done is to give him confidence. He said: “We thought it was too good to be true when we discovered Frank actually had an electronics background. We had
a meeting and he basically got us asking ourselves the questions we should have been asking.
“Because we were meeting with him every month we were motivated to put things in place, and have gone from strength to strength . We moved premises in March last year, bought new equipment and are now looking to turn over £1m this year and grow our workforce in the future from 11 to 20 people.“
Guinn said: “Darren and Steve have done everything properly and invested profits back into the company with a new building and new machines.
“When I sold my businesses I wanted to put something back and I do like to see young firms succeeding. I am able to warn businesses of tank traps because I’ve been there before.“
Vivian Dunn from Dormen said: “We have mentors with expertise in all sectors and we’re looking for businesses to partner them with.“
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – DECEMBER 13/JANUARY 14
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