Naval shipbuilding not falling below waves




By Mark Huband in Portsmouth

Financial Times, 17 May 2005

Between the storm-lashed steel of Ark Royal’s silhouette and the pristine beams of Nelson’s well-preserved HMS Victory, the harbour and dry docks of Portsmouth’s naval dockyard encapsulate a naval history that at first glance seems to be regressing.

Victory gleams for the tourists, while Ark Royal’s dilapidated state has led to it being brought to Portsmouth for maintenance.

But inside a vast covered workshop on a quayside placed symbolically between the glorious past and the rather shabby present, a new era is taking shape suggesting naval shipbuilding has not slipped beneath the waves.

Perched precariously on a steel frame wedged with pieces of wood, are the two sections of what will be the towering bow of the Royal Navy’s next generation Anti-Air Warfare Destroyer, the Type 45.

A honeycomb of rooms, corridors and pipework can be seen at the open end of the sleek hull, which will be rolled on to a barge that is being built outside in the harbour.

The entire structure will then be towed to the BAE Systems Govan shipyard for assembly into what will be one of 12 £500m Type 45s, the first of which is scheduled for launch in 2007.

Officials at VT Group, which is expected to report solid growth when it unveils results today, refer to its Portsmouth facility as a “factory” in an effort to shed the old image of a “yard”.

Beside the vast hall in which the Type 45 bow is taking shape, is an equally cavernous space where computerised machinery plots the outlines of doorways, fittings and stairwells on inches-thick sheets of steel, which are cut by precision lasers.

A combination of automation, co-operation between traditionally rival companies and projects resulting from the UK’s 1998 strategic defence review have provided the lifeline Britain’s naval shipbuilding industry has long sought.

Paul Lester, VT Group’s chief executive, says: “Because of the cyclical nature of shipbuilding, we have a golden opportunity in the next couple of years, with the UK shipbuilding industry, to work together in a joint venture where we can be more cost-effective and can utilise facilities much more effectively.”

The company is discussing with shipbuilders, BAE Systems and Babcock, how work on the Ministry of Defence’s two planned aircraft carriers can be organised round a new joint venture company, which could become the nucleus of British shipbuilding for the future.

Mr Lester says: “These discussions are a little bit like herding cats. When an industry is in a very precarious position it’s easier to get people into common positions. But shipbuilding isn’t in that precarious a position. If we do nothing, we will still enjoy 10 years of good business.”

He does predict, however, that the end of these big MoD contracts for destroyers and aircraft carriers would bring “a drop-off in our business”.

Riding out the boom-and-bust cycles that have faced the industry in the past has depended on both increased co-operation within the industry and a very wide-ranging diversity within the main shipbuilding companies.

“We have managed the peaks and troughs in the UK by finding export markets,” says Dick Rowe, VT Group’s commercial director, citing orders for offshore patrol vessels from Oman and Trinidad, and the construction of fast-attack ships in a joint venture with Elefsis, the Greek shipping company.

“The MoD need some stabilisation in the industry to deliver the programmes they have,” says Mr Rowe. “But if they don’t plan it properly then we will just get indigestion.”


© Copyright The Financial Times Ltd 2008.