Ferguson Marine turns to defence work to fill gaps

Ferguson Marine’s chief executive has told MPs that the Port Glasgow yard is increasingly dependent on subcontracted defence work from BAE Systems to sustain employment and demonstrate its capability as it faces an uncertain future pipeline.

Giving evidence to the Scottish Affairs Committee on 16 July, Graeme Thomson said the BAE steelwork contract provided a lifeline as the yard moved off the main construction phase of the ferry Glen Rosa.

“Although that is just steelwork at the moment—I know that point was made earlier—as we have had to release agency and contracting steelwork staff, we have a lot of focus on making sure our core staff stay employed. As that steelwork finishes in Glen Rosa, we are looking to move that capability on to those BAE Systems units.”

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Thomson said that the yard was using the work not only to keep people in jobs but also to prove Ferguson’s value to Scotland’s wider defence industrial base. “We want to be in a position of demonstrating to BAE Systems we have the capability, capacity and skills to deliver on time and quality, so we can then explore other opportunities with BAE Systems to support it going forward and expand that opportunity for us in the defence market.”

Earlier in the session, Tom Chant of the Society of Maritime Industries had warned MPs that civil and defence shipbuilding were inseparable and that a lack of coordinated pipeline left UK yards at a disadvantage. Thomson’s evidence echoed that point, saying Ferguson needed to balance multiple streams of work to survive. “Going forward, as a business, we need to establish a portfolio of work, which will be large vessels, smaller vessels and tier 2 support to other shipyards. We need to make sure we have a portfolio that allows us to balance our workload, understand how we can have continuity of work and manage our peak workload where we come along by reallocating across that portfolio.”

Asked whether Ferguson had faced challenges in transitioning towards defence work, Thomson insisted the yard had adapted without difficulty. “We have not experienced any issue in going on to do this defence work; we have been pursuing it for a number of months now and were delighted to sign that. We want to expand that work. We do not see a blocker to that, having experienced it. We want to continue to push to create that capability to do tier 2 activities. By tier 2, I mean feeding BAE Systems and Babcock with the work they have across central Scotland. We think that is a great opportunity for us and should be part of our portfolio going forward.”

He argued that Ferguson could and should be part of Scotland’s defence shipbuilding future. “As I see it, my responsibility as CEO is to make sure that we have work and are growing the capability, adding the social value that is needed, and establishing a footprint there on the River Clyde that is capable of delivering ships for generations to come. That does not necessarily mean that it has to be solely ferries or civil work; it can be support and defence work, or even other steel structures. But to make sure we have the continuity, we certainly want to be in a position where we are securing a portfolio in adjacent markets to the skill set we have, and we will continue to do so.”

Thomson closed by outlining his longer-term ambition for the yard. “Ultimately, we want to be a tier 1 builder of ships, but we cannot just be that; we need to be something more.”