The Herald on Sunday

WHY SCOT­LAND MUST RE­DESIGN ITS VI­SION OF SHIP­BUILD­ING TO BE­COME AN IN­DUS­TRY LEADER ONCE AGAIN

AS JIM McCOLL TAKES OVER THE AIL­ING FER­GU­SON SHIP­YARD THE WORK­FORCE AWAITS THE TY­COON’S VI­SION OF HOW TO MAKE COM­MER­CIAL SCOT­TISH SHIP­BUILD­ING PROF­ITABLE AGAIN BY COLIN DON­ALD BUSI­NESS ED­I­TOR

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SCOT­TISH busi­ness’s peren­nial white knight Jim McColl is ex­pected to give a press con­fer­ence next Tues­day to pro­vide more de­tail about his pro­posed res­cue of Fer­gu­son Ship­builders in Port Glas­gow, the last com­mer­cial ship­builder on the Clyde.

The Clyde Blow­ers ty­coon has al­ready done much more than of­fer sal­va­tion from the sack to Fer­gu­son work­ers, even prior to his for­mal ac­cep­tance of the keys to the yard.

In a state­ment on Fri­day, McColl pledged to get the yard back to busi­ness by the end of the year, boost em­ploy­ment num­bers to 100 by next Fe­bru­ary, and quadru­ple the work­force in three to five years.

He said: “There is an abun­dance of work out there which we be­lieve Fer­gu­son – with the nec­es­sary up­grade of fa­cil­i­ties – can un­der­take.

“Al­ready, we’ve had en­quiries about or­ders. We have money al­lo­cated to go ahead with the im­me­di­ate im­prove­ments that will se­cure that fu­ture.”

McColl’s phoenix com­pany joins BAE at Scot­stoun and Bab­cock’s at Rosyth as the frag­ile last rem­nants of two cen­turies of ship­build­ing in Scot­land, an in­dus­try with so­cial, po­lit­i­cal and cul­tural res­o­nances far greater than its cur­rent im­por­tance to Scot­land’s GDP.

Any­one with an in­ter­est in Scot­tish man­u­fac­tur­ing and its global rep­u­ta­tion must ap­plaud McColl’s re­peated readi­ness to help out dis­tressed Scot­tish con­cerns. His record of solv­ing big prob­lems to the ben­e­fit of Scot­tish work­ers speaks for it­self.

McColl plans to in­vest “many mil­lions” at the site while si­mul­ta­ne­ously seek­ing new or­ders, ini­tially in the oil and gas and re­new­able en­ergy sec­tors, but in the longer term seek­ing to launch new ships.

If no-one should un­der­es­ti­mate McColl’s acu­men, nei­ther should any­one un­der­es­ti­mate the chal­lenge of build­ing com­mer­cial ships in Scot­land. Not that there is any spe­cial jinx on the coun­try, which has suf­fered along with the rest of the Western Euro­pean ship­build­ing sec­tor from the rise of lower-cost yards in eastern Europe and Asia, al­though many be­lieve that this eclipse was far from in­evitable.

Can McColl buck the trend by fill­ing his or­der books with ship com­mis­sions? Those who know the world of ship­build­ing be­lieve its spe­cialised dy­nam­ics mean the cards are stacked against new en­trants, even ones with en­trepreneur­i­al­ism and ex­pe­ri­ence.

McColl has al­ready hinted at syn­er­gies with other parts of his em­pire which en­com­passes marine pumps and boil­ers, but Clyde Blow­ers’ links with ship­build­ing re­main ten­u­ous.

Ac­cord­ing to Stu­art Bal­lan­tyne, the ex­pa­tri­ate Scots chief ex­ec­u­tive of Sea­corp and for­mer ad­viser to the Scot­tish Govern­ment, mod­ern ship­build­ing is “in­ter­na­tional, com­pet­i­tive, un­pre­dictable, risky, mul­ti­fac­eted and fast”.

He added: “It leaves its mem­bers lit­tle time for con­tem­pla­tion, and lit­tle mar­gin for er­ror, and has no sym­pa­thy for fail­ure, no tol­er­ance for the in­flex­i­ble, the weak or the in­tran­si­gent.”

The Queens­land-based fig­ure, an au­thor­ity on mar­itime com­merce, who was asked by the SNP to con­trib­ute to a mar­itime strategy for Scot­land, told the Sun­day Herald that the best way for a bil­lion­aire like McColl “to turn a large

for­tune into a small for­tune” was to “buy a ship­yard”.

On the face of it, mak­ing a suc­cess out of Fer­gu­son looks chal­leng­ing. The cen­tury-old yard has been limp­ing along for two decades, los­ing ten­ders for fer­ries and other ves­sels to com­peti­tors in Poland and else­where, and adopt­ing var­i­ous patch-and-mend so­lu­tions to the un­der­ly­ing prob­lem of the un­com­pet­i­tive na­ture of Scot­tish ship­build­ing. It once em­ployed 400 peo­ple, but at the time of en­ter­ing re­ceiver­ship, this had dwin­dled to just 77.

The patch­work of so­lu­tions adopted to keep the yard afloat have in­cluded man­u­fac­tur­ing spe­cial­ist ves­sels like a hover barge for trans­port in the Rus­sian tun­dra, ca­ble-lay­ing ves­sels for the off­shore wind in­dus­try, and even man­u­fac­tur­ing steel tow­ers for the wind tur­bines them­selves.

While Fer­gu­son pre­vi­ous own­ers, the Dun­net fam­ily, have won praise for seek­ing to di­ver­sify, they lacked Jim McColl-type deep pock­ets and po­ten­tial syn­er­gies with a global en­gi­neer­ing em­pire – the at­tributes that have given hope to the yard’s work­force.

Also in McColl’s favour is the fact that the world needs more ships – lots of them. For all the de­mor­al­i­sa­tion of the in­dus­try over re­cent decades, mar­itime ex­perts see no rea­son why Scot­land

should not be­come com­pet­i­tive in a way that it never had to be in the days when the Bri­tish Em­pire and the Royal Navy pro­vided pro­tected mar­kets.

How­ever, Bal­lan­tyne says the idea of a yard be­ing able to com­pete for the oc­ca­sional one-off or­der is not cred­i­ble in today’s world, any more than a bou­tique car fac­tory that could turn its hand to Range Rovers or Nis­sans. He is also doubt­ful that oc­ca­sional or­ders from Cale­do­nian MacBrayne – even if the re­booted Fer­gu­son was more suc­cess­ful than its pre­vi­ous in­car­na­tion at win­ning them – could be the ba­sis for an out­ward­look­ing, fleet-footed op­er­a­tion that could cut it in today’s ship­ping world.

“If you are go­ing to be as fo­cused as you need to be start a ship­yard in a coun­try with five mil­lion peo­ple you need to be able to pro­duce ships that are use­ful world­wide, not things that are de­signed to be pur­chased by a fairly in­ept cus­tomer like the Scot­tish Govern­ment [ie, na­tion­alised ferry com­pany Cale­do­nian MacBrayne, or CalMac], which has a record of buy­ing things for huge amounts of money that don’t work prop­erly,” he said.

For Pro­fes­sor Alf Baird, head of the mar­itime re­search group at Napier Univer­sity’s Trans­port Re­search In­sti­tute, a re­vival of Scot­tish ship­build­ing has to start with a re­vival of ex­per­tise in marine ar­chi­tec­ture. Cour­ses in this area, he says, are heav­ily dom­i­nated by for­eign stu­dents.

“To re­vive ship­build­ing in Scot­land one of the things we have to ad­dress is the lack of de­sign skills” Baird said. “The best de­sign­ers are in Italy, Aus­tralia, Ger­many, Nor­way. These peo­ple study naval ar­chi­tec­ture at Glas­gow Univer­sity but they don’t prac­tice it in Scot­land.

“Yes, we did have a great tra­di­tion of ship de­sign in Scot­land, but you can’t live on tra­di­tion. I taught on this course a cou­ple of years ago and there were no Scots stu­dents at all. If we aren’t pro­duc­ing our own de­sign­ers of the fu­ture, then we start with a built-in dis­ad­van­tage.”

Baird is an arch-critic of CalMac, the ob­vi­ous end cus­tomer for any new en­trant into Scot­tish ship­build­ing, which, de­spite its need to re­place an age­ing fleet, he presents as an im­ped­i­ment to a re­vived ship­build­ing sec­tor. He claims its ships are de­signed by civil ser­vants and trades unions, the lat­ter with a view to max­imis­ing crew jobs, rather than by adopt­ing the lat­est in­no­va­tions on fuel and labour-sav­ing mar­itime tech­nol­ogy.

He hints that Scot­tish ship­build­ing’s legacy is ac­tu­ally a dis­ad­van­tage, as he sees it as hav­ing been a pro­tected in­dus­try, built for em­pire trade or mil­i­tary pur­poses, which meant that yards “could be hope­less but still got or­ders”.

Baird’s un­so­licited ad­vice to McColl is to play an ac­tive role in im­prov­ing Scot­land’s mar­itime de­sign skills and in­vest in the kind of cov­ered as­sem­bly sheds that fea­ture in the best fa­cil­i­ties in Europe or Asia – an in­vest­ment McColl has al­ready sug­gested he may make.

“There is a po­ten­tial for Scot­land to do well,” he says. “The three things we need are bet­ter skills, more in­vest­ment in in­fra­struc­ture and bet­ter de­vel­oped fi­nan­cial mech­a­nisms, such as loan guar­an­tees, that can make things hap­pen. “Ship­build­ing should be a strate­gic in­dus­try for Scot­land but we need to de­velop a strategy based around the fact that, in Scot­land alone, where the av­er­age age of a ferry is about 20 years old, we need to ac­quire about 100 new fer­ries in the next 10-15 years, and in Europe as a whole we need about 3000 new fer­ries that meet mod­ern [en­vi­ron­men­tal] fuel reg­u­la­tions and dis­abled ac­cess re­quire­ments.”

He ad­vo­cates fresh think­ing about how Scot­tish ship­build­ing can plug into the global sup­ply chain, for ex­am­ple, by im­port­ing ready­made hulls from China and us­ing lo­cal ex­per­tise on the higher-value fit-out closer to cus­tomers. Al­though the idea might seem chal­leng­ing to the proud tra­di­tion of the Clyde ship­yards, sim­i­lar de­vel­op­ments have oc­curred else­where, for ex­am­ple, in Trans­port Scot­land’s dis­creet im­port­ing of large ready-made com­po­nents of the new Queens­ferry Cross­ing from Shang­hai.

It would be a sur­prise if Jim McColl, one of Bri­tish in­dus­try’s pi­o­neers of man­u­fac­tur­ing in China, has not al­ready in­ves­ti­gated such op­tions. We will learn next week if his plans for Fer­gu­son in­clude the im­me­di­ate un­veil­ing of a new blue­print for Scot­tish ship­build­ing, or whether he will bide his time.

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 ??  ?? McColl’s bid for the Clyde yard rep­re­sents the lat­est in a string of own­er­ship changes for Fer­gu­son’s, tes­ta­ment to the ever-volatile ship­build­ing sec­tor. The Fer­gu­son broth­ers left the Flem­ing & Fer­gu­son ship­yard in Pais­ley to lease the Ne­wark yard in Port Glas­gow in 1903, which was bought by John Slater Ltd in 1918, but re­turned to the con­trol of the Fer­gu­sons in the late 1920s. Lith­gows Ltd pur­chased an in­ter­est in 1955, tak­ing con­trol in 1961, and it re­mained a sep­a­rate en­tity within the Scott Lith­gow group un­til 1977. Na­tion­alised and sub­sumed into Bri­tish Ship­builders in 1977, the firm was merged with Ailsa Ship­build­ing to form Fer­gu­son-Ailsa Ltd in 1980 though the two parts were sep­a­rated again in 1986 when Fer­gu­son merged with Ap­ple­dore Ship­builders in Devon to form Ap­ple­dore Fer­gu­son. By the late 1980s, the only yards in state own­er­ship were the small Ap­ple­dore and Fer­gu­son yards. Fer­gu­son was de­merged and ac­quired by Greenock-based en­gi­neer­ing firm Clark Kin­caid in 1989 and started trad­ing as Fer­gu­son Ship­builders. In 1990, Clark Kin­caid was ac­quired by Kvaerner and be­came Kvaerner Kin­caid. In 1991, Fer­gu­son Ship­builders was sold to Fer­gu­son Marine, which was bought by the Dun­net fam­ily’s Hol­land House Elec­tri­cal group in 1995. Ex-owner Kvaerner Kin­caid was sold to Scan­di­averken in 1999 and ceased op­er­a­tions at its Greenocksi­te in 2000.
McColl’s bid for the Clyde yard rep­re­sents the lat­est in a string of own­er­ship changes for Fer­gu­son’s, tes­ta­ment to the ever-volatile ship­build­ing sec­tor. The Fer­gu­son broth­ers left the Flem­ing & Fer­gu­son ship­yard in Pais­ley to lease the Ne­wark yard in Port Glas­gow in 1903, which was bought by John Slater Ltd in 1918, but re­turned to the con­trol of the Fer­gu­sons in the late 1920s. Lith­gows Ltd pur­chased an in­ter­est in 1955, tak­ing con­trol in 1961, and it re­mained a sep­a­rate en­tity within the Scott Lith­gow group un­til 1977. Na­tion­alised and sub­sumed into Bri­tish Ship­builders in 1977, the firm was merged with Ailsa Ship­build­ing to form Fer­gu­son-Ailsa Ltd in 1980 though the two parts were sep­a­rated again in 1986 when Fer­gu­son merged with Ap­ple­dore Ship­builders in Devon to form Ap­ple­dore Fer­gu­son. By the late 1980s, the only yards in state own­er­ship were the small Ap­ple­dore and Fer­gu­son yards. Fer­gu­son was de­merged and ac­quired by Greenock-based en­gi­neer­ing firm Clark Kin­caid in 1989 and started trad­ing as Fer­gu­son Ship­builders. In 1990, Clark Kin­caid was ac­quired by Kvaerner and be­came Kvaerner Kin­caid. In 1991, Fer­gu­son Ship­builders was sold to Fer­gu­son Marine, which was bought by the Dun­net fam­ily’s Hol­land House Elec­tri­cal group in 1995. Ex-owner Kvaerner Kin­caid was sold to Scan­di­averken in 1999 and ceased op­er­a­tions at its Greenocksi­te in 2000.

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