GOVERNMENT ROYAL FLEET AUXILIARY SHIPS SHORTLIST OF SUBSIDISED FOREIGN SHIPYARDS ‘SELLS UK JOBS DOWN THE RIVER,’ SAYS GMB
If crucial £1 billion contract goes to Korea, Japan, Spain or Italy Government will have betrayed UK industry, says GMB Union
GMB, the union for shipyard workers, has hit out at the Government’s decision to shortlist four non-UK firms for a crucial £1 billion shipbuilding order.
The union said that the order could be used to preserve vital military defence manufacturing capacity that is currently under threat.
The historic Appledore shipyard, in North Devon, is currently due to close in March 2019 – while Cammell Laird workers are in the midst of industrial action over 300 job losses announced by the company.
GMB estimates that 1,800 shipbuilding jobs could be secured in the UK if the consortium of Babcock, BAE Systems, Cammell Laird and Rolls-Royce win the contact for Fleet Support Vessels, which will supply the Royal Navy.
New GMB research has established that all of the shortlisted non-UK bidders have enjoyed unfair advantages compared to domestic companies:
- Daewoo Shipbuilding and Marine Engineering of South Korea (DSME) received a £2 billion bail-out from the South Korean government in 2017. In 2015, the state Korean Development Bank launched the ‘KDB Ocean Value-Up Fund’ worth $847 million and a $1.2 billion ship investment fund to assist Korean shipbuilding.
- DSME has been shortlisted despite failing to deliver the UK MARS tanker order on time.
- Navantia is 100% owned by the Spanish government. Spanish shipbuilders were found to have received illegal direct subsidies in 2013.
- Fincantieri is majority owned by the Italian government. Fincantieri is currently building a similar €372 million Logistic Support Ship for the Italian Navy. The Italian government did not put its order out to international tender.
- Japan Marine United Corporation: The Japanese government has indirectly subsidised production by providing credits for the purchase of ships, and providing training opportunities for workers that are not available in the UK.
Ross Murdoch, GMB National Officer and Chair of CSEU Maritime, said:
“It’s outrageous that this crucial order is being put out to artificially-subsidised overseas companies when jobs are being lost in the UK.
“Ministers have the power to provide a future for workers in our historic yards such as Appledore and Cammell Laird where highly skilled jobs are under threat.
“Whatever happened to the prosperity for shipbuilding communities that the Government set out in the National Shipbuilding Strategy?
“It’s a mockery of competition to force UK firms to compete with artificially subsidised companies overseas. These factors must be accounted for by the MoD when it evaluates bids for the Fleet Solid Support order.
“Shipbuilding communities are feeling a profound sense of betrayal. They were promised a ‘red, white and blue’ Brexit – instead their jobs are being sold down the river.”
Contact: GMB Press Office on 07958 156846 or at email@example.com
Notes to Editors
 Ministry of Defence, Shipbuilding firms chosen for Fleet Solid Support competition, 30 November 2018 https://www.gov.uk/government/news/shipbuilding-firms-chosen-for-fleet-solid-support-competition
The shortlisted bidders are:
Consortium of Babcock, BAE Systems, Cammell Laird and Rolls-Royce
Daewoo Shipbuilding and Marine Engineering
Japan Marine United Corporation
South Korea: Reuters, ‘South Korea’s Daewoo Shipbuilding unlocks $2.6 billion bailout after bondholder approval,’ 18 April 2017 https://www.reuters.com/article/us-daewoo-restructuring/south-koreas-daewoo-shipbuilding-unlocks-2-6-billion-bailout-after-bondholder-approval-idUSKBN17K0KX
OECD, Imbalances in the shipbuilding industry and assessment of policy responses, 18/19 April 2017, printed page 46 http://www.oecd.org/industry/ind/Imbalances_Shipbuilding_Industry.pdf
Spain: Financial Times, ‘Brussels rules Spanish shipbuilding subsidies illegal,’ 17 July 2013 https://www.ft.com/content/c2a4d590-eed2-11e2-98dd-00144feabdc0
Italy: See table 25 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52016SC0407 and https://www.fincantieri.com/globalassets/prodotti-servizi/navi-militari/web_m-04-18_lss-logisticsupportship_singola.pdf
Japan: OECD, Imbalances in the Shipbuilding Industry and Assessment of Policy Responses, 18/19 April 2017, printed page 50