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BAE SYSTEMS WEIGHS INVESTMENT OPTIONS FOR NEW CLYDE SHIPBUILDING FACILITIES

BAE SYSTEMS WEIGHS INVESTMENT OPTIONS FOR NEW CLYDE SHIPBUILDING FACILITIES

Closing Govan would see shipbuilding operations consolidated in a redeveloped facility at Scotstoun, BAE Systems' other Clydeside yard.

Closing Govan would see shipbuilding operations consolidated in a redeveloped facility at Scotstoun, BAE Systems' other Clydeside yard. However, the company is also examining an alternative lower-cost facilities investment strategy that would maintain activity on both sites; the two options will be reviewed throughout 2014 with a decision expected by the end of this year as part of the Main Gate business case for Type 26.

Details of the proposed manufacturing options, revealed on 6 February, follow the announcement in November last year that BAE Systems would restructure and rationalise its surface shipbuilding business. This will see the Naval Ships unit shed 1,775 jobs across all sites, and close its Portsmouth shipbuilding facility in mid-2014.

The company said at the time that it had agreed with the Ministry of Defence (MoD) "to consolidate its shipbuilding operations in Glasgow with investments in facilities to create a world-class capability, positioning it to deliver an affordable Type 26 programme for the Royal Navy".

In December last year the company, through civil engineering group Arch Henderson, submitted two planning applications to Glasgow City Council. One application - BAE Systems' favoured option - has outlined a plan to redevelop the Scotstoun site on the north bank of the River Clyde. This would see a GBP200 million investment in a new shipbuilding facility, including new buildings and associated works, on the existing shipyard estate to allow Type 26 manufacture, integration and commissioning activities to be consolidated on a single site.

Redevelopment of the Scotstoun site would include building a 330m covered dock hall, a steelwork preparation facility, a steelwork fabrication facility, a paint cell, supporting offices and employee welfare facilities, and a quay (which would enable ship blocks and equipment to be transported by sea). If selected, construction is likely to begin in January 2015 and be completed in 2017.

The second planning application has outlined plans to expand and upgrade the Govan and Scotstoun sites, with Type 26 activity to be split between the two. This option, estimated to require investment of more than GBP100 million, would include extensions to the existing fabrication and main ship build halls at Govan. A new paint cell and outfit hall would also be constructed and the existing berth would be levelled to create a new transfer quay.

Work at Scotstoun - as the focus for engineering, commissioning and test - would include upgrades to the dry docks and strengthening of the deepwater berth to support mobile cranes. If this option is selected, construction would be expected to proceed at Govan from February 2015 until 2017, while work at Scotstoun would last from 2017 to 2018.

The single site option at Scotstoun is favoured by BAE Systems Maritime-Naval Ships for a number of reasons, Charlie Blakemore, the company's business and transformation director, told IHS Jane's . "First we own the Scotstoun site, whereas the Govan estate is leased. We have our engineering activity already based at Scotstoun, and it is advantageous to have these close-coupled to production facilities. And there is more space for redevelopment at Scotstoun, providing us the flexibility to optimise the facility design."

He added: "We want to develop a world-class complex warship capability that will deliver value for money for our customers. The single-site option allows two ships to be built concurrently under cover in a tandem dock with significant outfit proceeding alongside in a laydown area. We estimate that this will reduce build time by about a third compared with the two-site option."

COMMENT
BAE Systems Maritime-Naval Ships began a benchmarking exercise in 2011 to compare its performance with that of 34 other yards worldwide. It has also been studying best practice in other industries - notably aerospace and automotive - as part of a wider business design programme embracing improvements across all areas of operations.

A decision in favour of the single site option put forward by BAE Systems would see Scotstoun become, de facto , the UK's sole facility for the build and integration of complex surface warships. It is understood that design and planning work completed to date has been cognisant of future MoD equipment plans, and has considered facilities and capacity issues attendant to the build of other larger ship types.

The decision on which option to pursue will ultimately hinge on the MoD, as BAE Systems will need commitments on Type 26 offtake to have confidence in the business case for the single site option.

Source : janes