By Paul Sweeney

SCOTTISH shipbuilding has historically been an industry characterised by “feast and famine” cycles in its order books. Its prospects even a short 25 years ago were considerably less benign than those facing it today. At that time, the upper Clyde had two separate shipbuilding companies on opposite banks of the river; Yarrow of Scotstoun, owned by GEC Marconi, an eminent specialist in naval shipbuilding, and the Norwegian-owned Kvaerner Govan, that had bought the venerable Fairfield shipyard when it was privatised in 1988, in an effort to enter the commercial LPG tanker market.

Yarrow was engaged in fierce competition with Swan Hunter on Tyneside for orders for 16 Type 23 frigates, which were being tendered in batches of three at a time. The uncertainty and volatility of competitive tendering for small batches of ships, drip-fed by the Ministry of Defence, resulted in the workforce being in a state of almost perpetual threat of compulsory redundancy, hinging on ministerial announcements; and a management that was unable to commit to long-term investment for future improvements that would enhance competitiveness. Govan shipyard would later merge with Scotstoun under BAE Systems and withdraw from merchant shipbuilding altogether after Kvaerner pulled out in 1999, due to a collapse in the commercial market for LPG tankers.

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It was with great relief that this counter-productive “Dutch auction” approach to Royal Navy procurement was stopped and the first Defence Industrial Strategy was introduced in 2005. Underpinning this strategy was the clear understanding that the country had to sustain a sovereign capability to design, build and commission complex warships. In order to achieve this, UK shipyards needed the security of long-term order pipelines in order to be able to invest in modernisation to drive competitive efficiencies and maintain the integrity and skills base of their workforce.

Although British shipbuilding is a mere fraction of the scale it was half a century ago, the Defence Industrial Strategy approach to naval procurement has led to an unprecedented period of stability for the critical core that remains today. The Type 45 destroyer followed by the Queen Elizabeth aircraft carrier programmes have afforded job security. Significant efficiencies gained from longer production runs have also allowed the industry to invest in what is now the largest private sector engineering apprentice programme in Scotland.

The start of the manufacturing phase of the latest Type 26 Global Combat Ship programme will begin this summer, coming on-stream at the same time as five new River Class Offshore Patrol Vessels are being built at Govan and design work for a new class of Type 31 frigates is in prospect. The Clyde has now effectively established itself as the UK’s only centre of excellence for complex warship design and construction.

This stability provides a once-in-a-generation opportunity to invest for the long-term and the Clyde yards have already undertaken a comprehensive international benchmarking study that has driven a design for new shipyard infrastructure. However the proposed facility investment of around £100m at the Govan and Scotstoun shipyards, ostensibly confirmed in May 2015, looks like it will no longer proceed in the manner first envisaged.

Without a commitment to modernising the Clyde’s shipbuilding infrastructure to be “upper quartile” in those global shipbuilding benchmarks, we risk undermining the long-term competitive position of these shipyards in terms of modern working practices and the cost-effective operational efficiency that is vital to win future export orders on commercial terms.

We cannot simply reduce this matter to another proxy war about the constitutional future of Scotland. The future of naval shipbuilding at Govan and Scotstoun shipyards remains fundamentally secure until the 2030s with the Type 26 programme, but the concerns raised about investment in the shipyard’s infrastructure for the longer term are nonetheless acute.

It is now critical that both Scottish and UK governments collaborate to build on the Clyde’s status as the UK’s undisputed centre of excellence for complex warship design, build and integration, while positioning it to compete internationally. It is not too late. We have a significant window of opportunity to undertake this investment during the Type 26 programme. However, this can only be achieved if we all work in a spirit of co-operation to enable the necessary capital investment that was originally envisaged as critical to delivering world class shipyard infrastructure to realise the full potential of our world class shipbuilders.

Paul Sweeney formerly worked at BAE Systems and is now a council member of the Institution of Engineers and Shipbuilders in Scotland. He writes in a personal capacity.