Govan shipyard likely to close in BAE revamp of Clyde facilities Published duration 6 February 2014

media caption BAE wants to expand the shipbuilding capacity of its Scotstoun yard in Glasgow

The Govan shipyard faces likely closure as part of plans by BAE Systems to upgrade its Clyde facilities.

It has set out two proposals to Glasgow City Council. One option, costing roughly £100m, is to upgrade both Govan and Scotstoun sites, and float ships between the two.

The other option, costing about £200m, would see Govan closed and a large fabrication shed built at Scotstoun.

BAE prefers this option, which it said would reduce build times by one-third.

The defence contractor's plan to expand shipbuilding capacity is part of the proposal it has been negotiating with the Ministry of Defence to secure contracts to build the Royal Navy's new Type 26 warships.

Thirteen of them are planned, to replace frigates. The vital "gateway" decision on the contracts will not be taken until the final quarter of this year, after the independence referendum.

BAE Systems announced plans in November to cut 825 jobs at its yards in Scotland and 940 at Portsmouth, where it would end shipbuilding altogether.

The job cuts followed a drop in work after the end of construction for two new aircraft carriers.

The carriers fabrication work will continue at Govan for about two more years, while assembly of the giant ships will last longer at Rosyth on the Forth, where some Clyde workers have been transferred.

The MoD awarded the Clyde yards an order for three new offshore patrol vessels, which will see work continue at Govan until 2018.

While BAE owns Scotstoun and runs its administration, design and supply chain operations from its offices, Govan is leased from Clydeport. The lease runs out in 2019.

Charlie Blakemore, head of transformation at BAE's shipyards division, has explained to community groups that the upgrade of Scotstoun would make it a much more attractive place to work, with improvements to offices, the canteen, a gym and creche, while the company is making work more flexible for its staff.

He said the option of keeping Govan open carries a heavy cost in transporting ships across the Clyde on barges, and some of the work would remain outdoors, which can harm productivity.

The option of closing Govan would mean a 340-metre long fabrication yard being built at Scotstoun. The company has compared its processes with 34 leading shipyards around the world, and wants to apply the most modern techniques in building by module, and doing so under cover.

While there is little immediate prospect of winning export orders for the Clyde, the company said that more efficient production could help the Clyde yard compete internationally.

Johann Lamont, the Scottish Labour leader who represents the Govan yard at Holyrood, said she welcomed continuing shipyard work on the Clyde, but she added: "We know that the potential loss of shipbuilding on the Govan site would be a sad day for an industry which has been battling decline for many years and a community which is proud of its shipbuilding past, bringing to a close a chapter in Scotland's industrial history.

"If this happens, the challenge would be to secure future opportunities on the Govan site which will support the local economy and I will work with Glasgow City Council and the Scottish Government to ensure this. The people of Govan deserve nothing less."

Nicola Sturgeon, the deputy first minister, who represents part of south Glasgow, said she would prefer a two-yard future for the Clyde.