Govan future in doubt as buyers begin talks

Talks are already under way with potential buyers for Kvaerner’s Govan yard, which the Anglo-Norwegian group put up for sale this week. Union sources said they were confident of a successful outcome, and named potential buyers for Govan as Babcock Rosyth, Harland & Wolff and VSEL. But overcapacity in shipbuilding and a lack of orders […]

Talks are already under way with potential buyers for Kvaerner’s Govan yard, which the Anglo-Norwegian group put up for sale this week.

Union sources said they were confident of a successful outcome, and named potential buyers for Govan as Babcock Rosyth, Harland & Wolff and VSEL.

But overcapacity in shipbuilding and a lack of orders mean its future remains in doubt.

Some 3,000 jobs are at stake within Kvaerner’s Scottish operations as a result of the restructuring. Around 1,200 are employed at Govan, while Kvaerner Energy at Clydebank, which makes gas turbines and employs 750, is also being sold.

Kvaerner is also disposing of its steel fabrication business, which includes a site in Fife employing around 300. And a further 850 jobs at Kvaerner Oil & Gas in Aberdeen could be affected.

Former shipyard union leader Sir Gavin Laird is leading the search for a buyer. `Kvaerner Govan’s problems are not because of specific failings of the yard,’ he said. `We have a tremendous asset in the quality of people and the investment made over the past decade.’

Kvaerner said it had decided to pull out of shipbuilding because it was `a drain on the group’s profitability’. It added there were few synergies with its other core businesses. Kvaerner made a group pre-tax loss last year of £105m.

Govan has lost £70m in the past ten years, despite £90m of government subsidies. A healthier order-book will be vital in attracting a buyer. Orders for new ships are due to dry up by the summer.

Govan employees are working on a steel order for Belfast yard Harland & Wolff. Management has also been talking to VSEL in Barrow about work for an MoD contract for surface vessels.

* Too late for Govan, page 2