Defend jobs! Nationalise the shipyards!

The announcement from BAE Systems Ltd (BAE), made on 6th November, that at least 940 jobs would go as part of the planned loss of 1,775 jobs in the UK, produced a wave of anger, throughout Portsmouth dockyard and the wider city. It is the task of the leaders of the labour movement to mobilise the trade unions in defence of jobs and demand the nationalisation of any industry threatened with closure.

The anger of ordinary people against yet another attack on jobs is shown by the number of hits on a Facebook site set up to “Save Portsmouth Shipyard”, which had attracted 40,000 ‘likes’ within about 24 hours. At the latest count, Sunday 10 November, it was up to 72,000.

The initial mood of the workers, speaking on the local TV programme, was one of solidarity with the workers in Scotland, resignation about the redundancies, and the search for a plan from their union leaderships.

BAE is a global company operating in the UK, USA, Australia India and Saudi Arabia, with many local offices in Europe, South America and the Far East. It has 88,200 workers worldwide, many of whom will be highly skilled. It is mainly known for its work in building military ships, tanks and aircraft, but also has interests in communications and computer services. It is one of the top two armaments companies in the world.

In April 1977 BAE was nationalised as a merger of various smaller companies involved in the arms trade, including the British Aircraft Corporation. In 1981 the Thatcher government started selling off the company: 51% in 1981 and the rest in 1985. During the 1980s it was involved in the corrupt payments of commissions (bribes) for the sales of aircraft to Saudi Arabia (The Al Yamamah scandal).

Sales in 2011 were £19.2bn and in 2012 £17.8bn, but dividend payouts increased from 18.8p to 19.5p (+ 3.5%) per share on profits of £1.6 billion. The 2012 accounts show an order book valued at £42 billion.

The company’s interim management statement issued on 10 October 2013 says: “double-digit growth in underlying earnings per share is anticipated for 2013.”

Less than 18 months ago, on 30 June 2012, The Portsmouth News carried a report just after BAE Systems had handed over Amazonas, the first of three ocean patrol vessels to the Brazilian Navy. At the time there had been rumours that the government could delay building the second of two aircraft carriers and close BAE System’s shipbuilding operations at Portsmouth Naval Base in order to save cash.

As the interview with the shipbuilding worker and the report from the Portsmouth Trades Council meeting show, the company has not been investing in the Dockyard for some time. Shipbuilding is a cyclical business but the company should have been seeking further orders.

As recently as 30th June 2012, BAE Managing Director, Mick Ord said:

“From a BAE point of view we have two very large bases here in Portsmouth – the maritime business that supports the fleet, and a very large shipbuilding capability here.

“We’re absolutely at full capacity at the moment and we’ll be busy well into 2014. We have lots of different options to consider, but no decisions have yet been made.

“It’s important for the wider Portsmouth area to realise the international business we’ve negotiated here. Behind these walls there’s a lot going on, not just keeping our own navy afloat.” (The Portsmouth News, 30/6/12)

Four years ago, on 30 June 2009, BBC Scotland reported:

“Plans are being drawn up for the possible closure of two navy shipyards after aircraft carrier work ends in 2014. It follows a leaked memo from BVT, the owner of yards at Scotstoun and Govan in Glasgow, and in Portsmouth.

“The memo says the Ministry of Defence is willing to pay for thousands of redundancies to scale down Britain’s capacity for building warships.

“The leaked memo. . . shows BVT Surface Fleet’s chief executive Alan Johnston forecasting savings of up to half a billion pounds from the closure of two out of three yards after the contract for two super-carriers is completed in 2014.

“This would be part of an agreement for an exclusive BVT deal with Whitehall to build the Royal Navy’s future ships [this was the 15-year deal with the Ministry of Defence].”

“In the memo, Mr Johnston writes: ‘BVT has committed to review its industrial footprint in light of the projected reduction in UK shipbuilding requirements post completion of the CVF (aircraft carrier) programme (current projections show that at the time the MoD requirements could be delivered from a single BVT facility) and MoD has committed to underwrite the necessary closure costs.

“’These one-off rationalisation/investment costs are estimated to be between £115m to £165m for redundancies, site closure, environmental clean-up, equipment disposal and asset write-downs. Discussions are under way to agree the specific mechanism by which they will be recovered (e.g. via overheads over an agreed time frame).’

“At the time, BVT said that the memo was about ‘worst case scenario planning’. A spokesman said: ‘BVT continues to invest in designs, facilities and skills to secure the long-term future of both its Clyde and Portsmouth facilities.’…

“Jim Moohan, the chairman of the shipbuilding and engineering unions in Scotland, said at that time that the news was disappointing, but that the workforce on the Clyde would look at all opportunities.

“‘We understand the problems in shipbuilding, we understand reduced capacity. I just think the timing could have been better planned,’ he said.

“‘There could have been better communication. It is something which could happen, but we will rise to the challenge as we have done in the past. I believe we have time on our side to look at the opportunities, to make discussion, create it and be positive going forward.'”

The unions in both England and Scotland need a unified campaign and should be demanding that details of the orders be given so that they can see where the jobs are.

In the meantime the workers should not be sacked but kept on, with no loss of pay, whilst they are retrained or future orders are obtained. BAE is one of the dwindling number of companies offering apprenticeships. In fact one worker completed their apprenticeship on the Monday only to receive the news of the job losses on the Tuesday! Many of the workers are skilled in heavy engineering and will find it hard to get another job in the area or even the country. The government’s proposals for “rebalancing” the economy away from the service industries are shown to be nothing more than wishful thinking.

A recent report from the University of Portsmouth illustrates the scale of the problem locally and estimated that two jobs would be lost in Portsmouth city for every three in the dockyard. Along with families of the workers losing their jobs, over 4,000 people would be directly affected. Portsmouth already has over 9000 people unemployed with companies and even pubs closing every week!

Ian Woodland, South East regional officer for the Unite union, said the news means skilled workers will be left on the “scrap heap”.

“[The] Tories are clueless about how to deal with BAE job losses in Portsmouth. Where will these people work?,” he said. “There are no jobs for these workers. BAE job losses in Portsmouth will affect [the] whole of Solent area.”

From the company’s viewpoint, there’s not too much problem. In its press release on 6th November 2013, BAE notes that:

“In 2009, BAE Systems entered into a Terms of Business Agreement (ToBA) with the Ministry of Defence that provided an overarching framework for significant naval shipbuilding efficiency improvements in exchange for commitments to fund rationalisation and sustainment of capability in the sector.

“Under these proposals, shipbuilding operations at Portsmouth will cease in the second half of 2014. The cost of the restructuring will be borne by the Ministry of Defence.”

As a Socialist Appeal supporter pointed out at the Portsmouth Trades Council, not only should we be angry about the job losses – but also about the fact that we are going to have to pay for them.

It is clear that the government has cynically attempted to set Scottish and English workers at loggerheads, when they need to work together to save their jobs.

The campaign to save the jobs in the shipbuilding industry should be united in both England and Scotland and taken into the wider labour movement. After the 15 year business agreement expires, the company may transfer work elsewhere and close the Glasgow shipyards too.

BAE Systems produces aircraft, ships and tanks for the military throughout the world. It also provides computer software to detect fraud and run businesses. The company is privately owned and is looking to maximise its profits, as usual at the expense of the workers. The unions should campaign for the company to be re-nationalised under workers’ control and management so that it could be properly planned and organised to produce the non-military ships and aircraft that are needed.