Select Committee on Work and Pensions Minutes of Evidence

Further supplementary memorandum submitted by BAE SYSTEMS (SHP 6B)

  As requested at the Scottish Affairs Select Committee, I write to clarify the position of BAE SYSTEMS regarding investment in our Clydeside shipyards.

  Can I firstly clarify the rational behind the investment, there has been some confusion that the investment was a some sort of "deal" made with the task force, this was not the case, the investment outlined on page 43 and 44 of the Shipbuilding task force report was identified during 2001 and forms part of the BAE SYSTEMS strategic business plan. It has also been consistently stated that the investment consists of £75m over a ten year period and is directly linked to both UK MOD and Export projects also included in our business plan.

The expenditure is centred around:

—  Creating a world class steelwork centre of excellence in our Govan Yard.

—  Creating a Manufacturing/Export/Type 45 centre of excellence in our Scotstoun Yard.

—  Creating a Submarine centre of excellence in our Barrow Yard, including maximising utilisation of the Devonshire Dock Hall.

—  Clydeside Carrier Assembly Strategy for BAE SYSTEMS Marine.

  As identified in the Task Force report we have committed to spend over £9m this year in our Clyde Yards, the detail being:

Scotstoun—Current Investment

—  IT System Infrastructure

—  Completion of Covered Dry Dock Enhancement

—  T45 Design Office Refurbishment

—  Technical Offices Refurbishment

—  Joinery Centre of Excellence

—  New Medical/HS&E Centre Phase 2

—  New Dry Dock Doors

—  Type 45 RoRo facility

  Total—£4.8 M

Govan—Current Investment—

—  Steelwork Centre of Excellence, inc:

    —  Plasma Burning Machine

    —  Transfer Seam Welder

    —  Panel Line Welder

    —  New Overhead Cranes

    —  New Fabrication Shop Doors

    —  Improved Work Environment

    —  Transfer Robotic Cutter

    —  New Programme Office

    —  New Medical Centre

    —  CCTV Security Upgrade

    —  Land Rationalisation/New Car Park

  Total—£4.765 M

  The above items detail the capital spend this year and I enclose photographs[5] of recent investment in our Clyde Yards showing how we are progressing against our intent to a successful Clyde Shipbuilding business. If you or any of the committee wish to visit the yards to view the improvements being made, this can of course be arranged.

The remaining investment is identified for:

—  Further improvements to Scotstoun and Govan for the Type 45 Programme.

—  Further improvements to Scotstoun for Export opportunities.

—  Improvements in Govan for the new Carrier Programme.

—  Improvements to the Inchgreen facility for the Carrier Programme

The profile of this spend is described in the Task Force report, however I do need to reiterate the timing is dependant on the timing of the programmes themselves.

If you require any clarification on the above please do not hesitate to contact me.

Mr Simon Kirby

Managing Director, Type 45 Destroyer PCO

26 June 2002

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