Two of the UK’s naval dockyards this week took cost cutting measures as the shortage of refit work across the industry begins to bite.
Industry observers believe at least one of Britain’s naval dockyards could be forced to close or merge if attempts to diversify are not successful.
‘If you look at the size of the fleet and the capacity of the dockyards to tender for refits, you have four yards competing and enough work for one and a half. We have to improve our competitiveness,’ said a spokesman for DML, the firm that owns Devonport naval dockyard.
DML said this week it had agreed a 15-month pay deal giving workers a 4% pay rise for a year, rising to 5.3% for the last three months, in return for improvements in competitiveness.
The deal will not mean job cuts, DML insisted, ‘but a key element of this settlement is that the company and trade unions have committed to work in partnership to improve the company’s business competitiveness’.
‘We need to achieve a higher standard of productivity. We committed to five years of productivity improvement when we bought the dockyard and we’re well aware of how expensive it is to operate a fleet of nuclear submarines.’
Last week DML won the contract to refit the frigate HMS Lancaster, beating Rosyth dockyard, Cammell Laird and Fleet Support (FSL). The deal will provide work for about 250 people for 14 months.
Rival dockyard Rosyth last week said that 216 posts in its 3,600-strong workforce were ‘surplus’ to requirements. The 90-day consultation period has now started and efforts are being made to find ‘suitable volunteers for voluntary redundancy,’ Babcock said.
‘The defence industry has overcapacity and that extends right through to shipyards,’ said Commander Mark Whelan of the British Naval Equipment Association. ‘That’s why the whole of the UK defence industry continues to consolidate not only in the UK but in Europe.’