After independence, just who is really going to tell BAE systems to uproot its massive investment in the Clyde?

Image: BAE Systems plc


I noted this story from ‘Defence News’ in an article entitled ‘UK orders five more counter-submarine frigates for $5 billion’ (15 November, 2022).

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The admitted cost and time overrun to date is in a programme to build just three vessels, only the first of which is due ten years after the award of contract. Lots of scope for further time and cost overruns before all three vessels are operational!

Of relevance to scares about MOD procured warship building in Scotland post-independence, the same article quotes BAE Systems’ CEO who said the MOD’s newly announced frigate building contract for his company ‘secures the future of a critical U.K. industry.’ He adds: “It underpins the ONGOING INVESTMENTS we’re making in the SKILLS, INFRASTRUCTURE and technologies needed to stay at the forefront of the maritime sector and to support the U.K. government’s national shipbuilding strategy,” (my emphasis)

The article notes that one of those investments is the PLANNED CONSTRUCTION OF A SHIPBUILDING HALL AT GOVAN. ‘The company has submitted a planning application with local authorities to build a 175 meter long covered hall COSTING IN EXCESS OF £100 MILLION ($119 million).’ We’re then told that: ‘The investment (in this shipbuilding hall) will be A MAJOR FACTOR IN THE FINAL FIVE SHIPS COSTING LESS AND BEING DELIVERED FASTER THAN PREVIOUS VESSELS, the MoD said.’

And from the UK Defence Journal (19 September 2014) ‘BAE now able to invest £200 million in Clyde ‘Frigate Factory’’.

This article states: ‘Now that Scotland has voted ‘NO’ and paved the way for further Ministry of Defence work in Scotland, the defence giant BAE have announced that the contract to build the £200 million frigate construction facility will be put out to tender next week.’

A BAE spokesman was reported back then stating:: “We have been very open that Scotstoun would offer more benefits to our business and our customers. We continue to explore two options for manufacturing facilities investment in Glasgow, subject to consultation and MOD agreement.

So has all the £200 million investment announced by BAE in 2014 taken place? How does the ‘frigate factory’ relate to the investment of £100 million in what is being called a ’Shipbuilding hall’? Presumably the £200 million was invested in Scotstoun and the next £100 million is due to be spent at Govan? Can anyone confirm?

As to the future, it is very far from straightforward (to say the least) to uproot a highly skilled workforce in Scotland which BAE has at scale – and has sunk investment in over a long time – and move it to some other country. Secondly, it will be a lengthy and expensive business (to say the least) to replicate a ’state-of-the-art complex warship manufacturing facility’ – one which has already had hundreds of million pounds of investment – somewhere other than Scotland. And especially when these present facilities are described as being ‘A MAJOR FACTOR IN THE FINAL FIVE SHIPS COSTING LESS AND BEING DELIVERED FASTER THAN PREVIOUS VESSELS’! Pragmatism and necessity suggest there are deals to be done!


9 thoughts on “After independence, just who is really going to tell BAE systems to uproot its massive investment in the Clyde?

  1. Scotland is “assigned” some £4billion as its (per capita) share of UK defence. Obviously we don’t get but a fraction of this actually spent in Scotland, but when independent we will have a defence budget of perhaps £1.5–£2 billion.
    The logical place to spend much of this will be in buying kit from “Greater England”, but if they veto spending money here, why would we buy from them? A quid pro quo.

    The world is awash with defence industry all competing like crazy for new markets.

    Liked by 3 people

  2. Interesting and perceptive piece Stewart. Also timely, as I had just this argument on Quora, where the counter argument was that of course the UK would take naval shipbuilding out of Scotstoun, put in such a way that it was almost as if it was in Westminster’s gift. The view by the other poster was that Westminster would take the work to Barrow (interestingly where he claimed to live), but the idea that BAE was going to spend £X million on facilities in Barrow having spent £X millions about 200 miles up the road, didnt seem to interest them.
    There would though be political pressure within the rUK after independence to “give them Scots nuthin”, so let’s say the threats by the MOD are realised (though see below too). This would mean BAE having a valuable asset in Glasgow, but unable to sell to their UK customer. What’s the solution? Well, I seem to remember the MOD being unhappy about BAE taking on work at Scotstoun from other countries other than the UK, so why not go for that? Why not compete for frigates for any country, anywhere? They might be lower tech, but how much does that matter when most of the tech is bought in from elsewhere and at Scotstoun it’s mostly a matter of installation. So the business base might change, but that wouldnt necessarily be a problem – indeed, given the fickle nature of the MOD there might be more certainty, which would be a good thing?
    However, in the short to medium term, five new frigates have been announced which I believe wont be delivered till the end of the next decade (ie late 2030s). None of us have any idea of the precise date of independence, but it is almost inevitable that when it is, at least two of these frigates will be somewhere in the production process. Does anyone believe the MOD are going to stick them on the back of a lorry and take them to wherever in rUK they are going to be completed – and wherever that is, will probably need to build new facilities, so more delay.
    Therefore, while the threat might be realised, the consequences are not necessarily as serious as is being implied by the Unionist side, and in the short/ medium term the transfer they suggest is by no means as straightforward as they think.
    One last point. They talk of “the end of shipbuilding on the Clyde”, and if we discount Fergusons that’s true. How many remember the lines in the Song of the Clyde that “From Glasgow to Greenock, with yards on each side; the hammer’s ding dong is the song of the Clyde”. At distant point in the past where I learned that at School, it was true enough, but it has been as part of the UK that it has all been dismantled.

    Liked by 4 people

  3. In 2014, at the prompting of the then Labour MP for Govan, the thuggish Ian Davidson of the affected glottal stop, the joint shop stewards at BAe urged members to vote NO to preserve shipbuilding on the Clyde because ‘The UK (sic) does not build naval vessels in a foreign (sic) country’.

    Davidson, of course, lost in the 2015 general election.

    After the announcement was made about the recent order for five frigates the GMB Convenor for the Clyde yards was effusive in his praise for the UK Government. Things do not change in Labour Party attitudes.

    Liked by 5 people

  4. UK £50Billion spend on Defence (attack). Illegal wars, financial fraud and taxevasion. £13Billion a year on decommissioning Nuclear for10 Year’s. Then spending more on nuclear.

    UK Gov spent £915Billion in 2019/20. Raised £819Billion (including £270Billion spenton Covid. £370Billion spent overa lifetime.

    £Billions wasted on Hickley Point and HS2. Scotlanddidnot get£27Billion for parity.

    Liked by 2 people

  5. It should also be noted when Clyde shipyards built some of the finest Ships/Liners in the world in the post war period alone it was IMHO an act of deliberate sabotage by consecutive Tory/Labour Govs to limit investment with the result they are now mostly reliant on MOD contracts. As we have seen all very handy when you need to blackmail Scotland to resist Independence.

    Liked by 4 people

  6. ”The UK does not build naval vessels in a foreign country ” is the unionist mantra – but they are quite happy to give many billions more to ”foreigners” ( EDF ) to build their nuclear power stations .
    Stupidity , ignorance of just plain hypocrisy where Scotland is concerned !

    Liked by 1 person

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