Wednesday, 6 November 2013

So where's the money going?

Is it just me, or is there a bit of a mismatch between these two stories?

From the BBC:

BAE Systems is to cut 1,775 jobs at its yards in Scotland and England and end shipbuilding altogether at Portsmouth. The firm said 940 staff posts and 170 agency workers will go at the Portsmouth site, which will retain repairs and maintenance work.

Some 835 jobs will be lost at yards in Govan and Scotstoun on the River Clyde in Glasgow, Rosyth in Fife and Filton, South Gloucestershire, near Bristol.

The cuts follow a drop in work after the end of aircraft carriers work. BAE Systems said it had made the cuts because of a "significant" drop in demand.

From the BBC:

The cost of two new aircraft carriers being built for the Royal Navy is expected to be almost twice the original estimate, the government is expected to confirm this week.

In the latest budget, the Ministry of Defence is set to estimate the cost of the two ships at £6.2bn. The department says it is renegotiating the contract to avoid further significant rises. Six years ago, when the contract was approved, costs were put at £3.65bn…

Of the latest cost rises, the Ministry of Defence said: "Negotiations between the MoD and the Aircraft Carrier Alliance [the ship-builders] regarding the re-baselining of the Queen Elizabeth carrier programme are at an advanced stage…

HMS Queen Elizabeth, which will not be finished until 2016 at the earliest, will be delivered before HMS Prince of Wales.

The Aircraft Carrier Alliance is of course primarily the self-same BAE Systems.


Lola said...


Bayard said...

Does it say when the jobs are to go?
Obviously there is a limit to how much even an MoD contract can be dragged out, although no doubt BAE will extend it to its utmost, with huge prolongation costs, natch, and then still further, and, once the contract is finally over and the ships are already obselete, BAE will close down the yards building them unless it has picked up some orders in the meantime. Considering the cost to the country of maintaining BAE in the style to which it has become accustomed, it would be no bad thing if it went bust completely, except for the poor sods that work in the shipyards.

Woodsy42 said...

You can probably assume that quite a bit won't be going into better quality and fittings in the ships, nor will it be going to make the working people richer. So that leaves bankers, consultants, management and corporate purses.

Mark Wadsworth said...

L, yes.

B, from the article: "This would see 940 posts go in Portsmouth in 2014 and 835 across Filton, Glasgow and Rosyth, through to 2016."

W42, indeed.

It appears that BAE employs 9,000 people in actual ship building, call it £40,000 a year each incl. NIC and overheads = £360 million a year = £0.36 billion

BAE/ACA will get about £1 billion a year for building the carriers.

Bayard said...

No, I don't get it either, unless they either are much further on in building the carriers than they are letting on to the MoD or they are talking about some other carriers.

"BAE/ACA will get about £1 billion a year for building the carriers."

Even if you double the £0.36Bn to allow for subcontractors and materials, that's a lot of profit and money for conslutants etc. I don't imagine anyone tries too hard to save money anywhere, either.

SumoKing said...

Very odd, considering construction is scheduled to start on the new type 26 frigates in a year or so.

Almost as if BAE is firing warning shots to cover its utter khunting up of the carrier project.

We paid extra for an adaptable design then when we asked for it to be adapted, they said they couldn't, that would cost the same as a new carrier.

Surely nothing to do with the idea that cats and traps on a navy carrier would get us cheap F16s and dump the useless uber spenny Eurofighter (plus most of the RAF). No, could not be that at all!