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Tony Rosier

Let’s be pro active with Brexit and look at joint production with our former commonwealth allies.

Gerry

Lol

Jag Patel

So Sir John Parker’s report attaches a lot of importance to the export of naval ships built in the UK, with the Type 31 held-up as an example of this revised approach to paying our way in this world.

What indeed is inhibiting UK-based defence equipment manufacturers from exporting their products to other countries? Well, one of the reasons is Government procurement policy itself – specifically, the business processes it uses to acquire military equipment.

Since the start of the banking and financial crisis in 2008, it has been Government policy to implement measures which will rebalance the economy away from financial services, towards the manufacturing & export-orientated sector which is seen as a driver of economic growth and wealth creation. This massive change in direction applies equally to the Defence Industry as it does to the rest of the UK’s industrial base.

Indeed, such is their determination to bring about this rebalancing, that senior members of the Government have staked a considerable amount of political capital and personal reputation in promoting the sale of military equipment to countries in the Arabian Gulf region, the wider Middle East, North Africa, Latin America and emerging nations in the Asia-Pacific region.

Notwithstanding the unprecedented marketing and credit/loan guarantee facilities provided at taxpayers’ expense to UK-based military equipment manufacturers, they remain seriously handicapped in export markets because they are unable to satisfy the fundamental demands of foreign Governments to provide, at the outset, a firm Selling Price on a whole-life sustainment basis for both, the prime equipment and its associated Support Assets – because their national Treasuries insist on it, in a way the Chancellor of the Exchequer has not done. After all, the cost of acquiring and re-provisioning Support Assets for the full in-service period can be in the order of, four to five times the prime equipment costs.

This shortfall in Defence Contractors’ capability has come about because their primary customer, the UK MoD (for whom the equipment is specifically designed and then rebranded for export as an off-the-shelf offering) has always had a preference for buying Support Assets for its military equipment separately, on a piece-meal basis via a steady stream of Post Design Services (PDS) Contracts let during the in-service phase, as and when the need arises rather than upfront, at the time of acquiring the prime equipment – despite the spin to the contrary from MoD.

The simple fact of the matter is that the ability to identify, quantify and then confidently price Support Assets can only be accumulated progressively as the Technical Solution is being advanced during the design, development, systems integration and prototyping phases of each equipment acquisition programme – it cannot be gained overnight! Central to the quantification of Whole Life Cost is the systematic determination of the inherent reliability of the prime equipment, bottom-up, starting with each individual Maintenance Significant Item. A methodology that has not been applied by Defence Contractors because they have not been specifically directed to do so by MoD.

So as a direct result of this tried-and-failed policy applied by MoD over the last several decades, UK-based Defence Contractors looking to export their existing, off-the-shelf products are seriously handicapped because none of the potential export Customers are buying Support Assets using PDS Contracts. It would also explain why Contractors are having such a hard time closing out those huge foreign military sales. The more MoD persists with continuing to buy Support Assets using PDS Contracts, the longer UK-based Defence Contractors will remain handicapped in export markets, and the longer the UK economy will remain grossly unbalanced.

If one is looking for a firm link between ill-conceived policy and the poor state of the UK’s defence manufacturing sector, then this is it!

Given this disastrous situation, one would have expected the Defence Industry to speak out and lobby Ministers vigorously, to abandon this policy of buying Support Assets separately, using PDS Contracts. Not a bit of it – indeed the silence from Industry, most notably the Select Few, is deafening. This only serves to prove the point that the Defence Industry cannot be relied upon to help formulate policy which is in the best interests of the State – only its own.

To add insult to injury, the lack of confidence in the robustness of any Whole Life Cost pricing data that may have been cobbled together hurriedly (using the thoroughly unprofessional wet-finger-in-the-air technique) and submitted by UK-based Defence Contractors, has given export Customers the leverage to extract significant concessions, such as, real transfer of technology and licensed production of lower-level Maintenance Significant Items through off-sets, to boost growth of their own industries, at the expense of business for small and medium-sized enterprises back in the UK – in the, not unrealistic belief that, these indigenous businesses are likely to deliver manufactured components much more cheaply than corresponding companies in the UK, burdened with higher overhead labour costs.

So much for MoD’s policy of making sure that the needs of export Customers are taken into account at the outset of new equipment acquisition programmes, to build-in exportability considerations!
on twitter

NavyLookout

Thanks Jag. Interesting and insightful comments from someone who obviously has deep understanding of defence procurement issues. It would seem Sir John has only scratched the surface of more fundamental problems.

sisyphus

From my own 20 years working in the industry of education, employment and training, I have said repeatedly, given the current funding regime in higher education, that certain ‘strategic’ degrees should receive a major subsidy from government and engineering degrees are top of the list …

William Rafferty

“Exasperated by decades of delays and cost increases” these eight words are at the heart of the argument and STILL we entrust the procurement and construction of these vessels to the same people and same yards. Wake up!

Val

No. MOD and BAE. We never had a problem like this one before. Don’t blame the Yards and shipbuilders themselves.

Val

Hence Cammell Laird, Babcock, A&P (Cammell laird owned), Ferguson (using Inchgreen with Cammell Laird), also Able UK (Graythorp), and the intacted Pallion yard in Sunderland. Non are BAE owned. But it’s not the fualt of the builders themselves. I wish BAE had let go of Govan for Fergusion to take over. But BAE want to wipe out all competition in Britain. That’s one reason they held on to this facility.

Grubbie

Consolidation just about finished, now let’s diversify again.It was obvious at the time that Labour had been suckered into a major blunder by Bae systems.lts now too late to avoid the inevitable, we are going to have to form joint ventures with other nations

Gerard

To be fair to Labour, they would have handed over the MOD and armed forces (except the Paras and Marines who would be split off and rebranded as the Pres.. Ministerial Guard) to BAE if they could. Thankfully they were stuck in that weird situation where actually looking after defence was too hard and giving it up to someone else was even more like hard work. Those two governments weren’t about that kind of thing.

Has there been a true joint venture (one where two or more states work together not just happen to buy the same kit from a multinational) since Tornado where the UK hasn’t had to cover a partners costs (after giving away a lot of work-share) or put down a lot of seed money before eventual collapse?

Who would we partner with?

FREMM means the two most likely partners (the ones we have actually had some success working with) are covered for this generation.

Norway and Holland seem to do just fine without partners.

The much celebrated and often touted South Korea cant seem to deliver what should be one of if not the most simple class of ships in the Naval service.

The US don’t seem to want to partner for these kind of things.

Canada and Australia are looking for a design and advanced equipment providers who’ll also let them build under contract. Not really wanting to partner as much as be a customer.

Everyone else I can think of either doesn’t have the capability, capacity, current need or shouldn’t under any circumstances be privy to anything beyond a promotional slide.

I’d rather follow Parkers suggestions and give it one last try before we completely lose all our core indigenous defence manufacturing capability.

Planes, tanks, rifles, handguns, helicopters, utility vehicles are already gone I’d like us to be able to build, man and sustain enough ships to actually allow us to take delivers of all those essential things if the time ever comes (and our suppliers are on our side and don’t have more important orders).

Chaffers

The consolidation hasn’t exactly produced a efficient yards that builds to time though has it? SJP’s findings appeared to be the opposite, that the other yards which had to compete to win orders were significantly more efficient, if you read between the lines about charging out rates.

Gerard

How many of the delays where the results of the yards vs constant MOD mismanagement, cabinet interference, funding delays and VSO playing “I want new shiny, shiny”? It all needs fixed and 20 years of committee meetings alone wont do it. Implementing Parkers plan would start us down that road in a major way.

The consolidation was a string of bad decisions. As much as I can hate on BAE, I can’t blame a company with shareholders trying to corner their markets. That’s the way the system is set up. I blame the governments who have allowed it to happen by rubber stamping every merger and build plan that left them as the only game in town. Time to reverse it, invest in manufacturing, invest in the RN, invest across the UK and aim to be world leaders again.

Farce Multiplier

I am tired of hearing people talk about the need to compromise, whilst simultaneously refusing to compromise an inch themselves.

If everyone was really serious about reform and compromise and willing to admit there are too few hulls, too few ASW frigates, too few engineers and too little money; then T26 would be cancelled. In its place an ASW T31 would be built in much larger numbers, far more quickly and at a much lower cost per ship. It would be a near like-for-like replacement of the existing T23. The T45 destroyers would be upgraded with strike-length VLS.

This is what compromise looks like – making do with something that is not perfect but good enough to do the job. If you despise this idea ask yourself how YOU are willing to compromise, rather than passing the buck like everyone else, because…

…you will not achieve economies of scale by building 8x T26 and 5x T31;
…you will not find the money to fund simultaneous build projects from the MoD’s annual budget without cutting capabilities elsewhere;
…you will not address the shortage of engineers by operating 3 types of RN frigate all at the same time (T23, T26, T31);
…you will not secure export orders if you are not even willing to place a double-digit order for your own design of ship;
…you will not reform procurement unless you are able to show coherent leadership and concentrate on providing a frigate fleet that is not fragmented into different types.

If YOU are not willing to compromise, no-one else will either.

Chaffers

There’s also the Canadian frigates, 15 of them, which Type 26 is in the running for. 23 sets of eq rather than 8 might bring the cost down nicely..

Michael McGuffin

It would seem the RN also needs to add personnel to its rosters and implement incentives to keep qualified staff, especially engineers and other technical positions. It does little good to have more ships if the RN doesn’t have sufficient men and women to man them.

4thwatch

The Engineering skills shortage for some reason seems to be most acute in the UK. Why is this? It used to be our strength and surely needs to be again. If my 1960’s education is anything to go by it is because of the failure of schools to teach the subject in any meaningful way.

Gerard

I’d say it has a lot to do with the those who could become engineering types, an intelligent lot, see the decline coupled with lack of confidence and investment and decide on another career path (or country). After all you have to pay to take on that risk now, no more “free rides”, no matter how vitally important your skills may be.

Then you have the “career advice” in schools that can be summed up with “You can be anything snowflake, why not spend 40k to become a hairdresser instead?”.

sisyphus

and could someone refute my latest suggestion…

if they are to spend £11m on a new building for the Royal Navy Reserve in Cardiff, which I don’t begrude them, but why couldn’t HMS Ocean be used instead as a floating HQ for the same purpose?

Chaffers

It was good to see the word urgent used repeatedly. As too to have some rational explanation for why all of our naval procurement goes so badly.

I believe it was the treasury who asked for it and thus far it has been warmly received by the RN and the smaller yards. That of course leaves the MoD.

Unfortunately it’s going to be the mod squad that write the actual strategy in the spring. Clearly they are blameless for all the previous fiascos otherwise they’d all have been sacked so I rather suspect they aren’t going to take kindly to it’s conclusions.

Still if the treasury accepts the arguments and allocates an extra £200m a year it could become an interesting race in the early 2020s. Likely the first contract for the Type 26’s will be for three. If the usual delays and mod cockups happen, and the independent yards get their act together it might make for some interesting choices.

4thwatch

If it’s Urgent the order should be for 4. That said Sir John Parker raises another interesting possibility, the setting up of in house RN design capability. To have an in house Warship build capability is another. In the 1900’s this is precisely what happened to break the Monopoly of Armstrong’s and build for the coming challenge from Germany.
BAE should surrender Portsmouth yard to an RN/ Quinitec JV so they can start to design, test and build top secret drones and other stealth craft.

Grubbie

All those who don’t want to blame the yards and workers -have you ever worked in these places? It’s un******g believable!
8 ships is insufficient volume to get the price down. I don’t think that we’re fight much further away than the Falklands and much less than 7000nm range seemed adequate. Seemed to cope without chinook capable flightless.

JME89

Would it not make sense to just scrap the T31 & build a type 26E instead?
The T26E could be built the way SJP said by non BAESys yards without having to spend millions more on new designs/tooling machinery. The T26E would share the same hull & setup as the T26R (R stands for rip off) but maybe setup for AA or to export customers requirements? An AA version would help out with the lack of T45 for carrier escorts. Any surpluss or backlog work from export orders could be floated up to BAE and finished in Scotland which might stop the SNP moaning. (Unlikely)

Chaffers

T26 is going to be a big, blue water beastie.

There isn’t much of a market for them worldwide, frankly other than Canada and Australia not many other nations are looking for it.

4thwatch

If as most of us probably think BAE is doing a s**t job in Maritime defence and supporting the RN; then the most cost effective way to correct this is by organising some sort of board room coup to correct the situation; and set this division to work in the UK’s maritime interest; probably in some sort of new partnership. This would relieve BAE of the lead decision making and responsibility. They obviously aren’t comfortable in Maritime. The only problem is that they have many of the top scientific brains in the related fields. It just we need to have a handle on how these are put to best use without decoupling the skills entirely.
Their joke offerings for the type 31 are a disgrace.

It’s actually hard to see what the board think their long term aim is. Having given away the UK’s wing making and other commercial airplane building operations and got into bed with the US defence establishment as a glorified subcontractor and despite their privileged position in UK defence one wonders if they have a vision or purpose as an independant company at all.

Mr. A. Smith

I don’t see many River Class patrol vessels flying off the shelves to other Navies so I don’t see how using an existing design and stretching them by 20/30 metres is going to suddenly make them attractive and in demand for exporting in future.

We need to create a new ship (E.g. BMT’s Venator design) for the Type 31 from scratch which is attractive for export use, stealthy, will be built quickly under distributed ‘block construction’ methods in multiple shipyards and which will in turn create jobs throughout the country. We would then use this new Type 31 vessel as a marketing tool to showcase the ship and it’s weapons (E.g. CAMM, Brimstone Sea Spear, Spear 3 etc.) for export globally. Ideally we need to build 8 to 12 of these new Type 31 ships for the Royal Navy.

We, as a nation, cannot afford to buy ships from one supplier who writes out blank cheques to themselves to the tune of £1 Billion a warship.

Not many navies will buy the 150m long Type 26 from us nor will they have the cash to spend £1 Billion on it either.

We need competition to drive down costs, increase innovation and create jobs throughout the country.

We urgently need more ships.

Building a new vessel is a fantastic opportunity to create jobs, increase exports, create new and support existing supply chains and help our industries.

Buying ships only from BAE at £1 Billion each and having them made in only one ship yard is not the solution and this is clearly not working.

We should also scrap our Type 23 ships in the UK and recycle the steel so it can be used in future ships. This would create further jobs, savings and help protect industries.

Darren

The clue is in rapid build with separate facilites concentrating on the same multiple hull sections blocks, or upper works fully fitted and assembled rapidly at an integration facility like Rosyth, Pallion, A&P, or Belfast Cammell Laird Birkenhead or Inchgreen) on the West coast, for Solid Support Ships and Type 31e’s. I guess the next step is how the consortiums tender/bid and what parts of the build suite which ever facility more so for maximum effeciency in those consortia’a.

Stephen

It is inefficient and un-competitive to have only tiny shipyards, each incapable of building a decent sized ship by themselves, hundreds of miles apart, with the cost associated with transporting the blocks. This is not the way forward.
We have to have at least 1 large shipyard capable of building large ships at 1 site. Either enlarge an existing one or build a new one with modern state of the art equipment.

Chaffers

https://hansard.parliament.uk/commons/2017-02-08/debates/A4147D78-2199-4441-A45B-03C3359DD27D/NationalShipbuildingStrategy

“I read an interesting report—Members have referred to it—on a website called Save the Royal Navy. Its opinion on the Parker report states….:”

Nice one my son….

NavyLookout

Thanks for the heads-up. Nice to be quoted in Parliament – let’s hope the message is getting through!

John Fleming

A long term plan for improving the Armed Forces is an excellent idea. Unfortunately our MP’s are rather dim and only capable of reviewing their automatic annual pay and benefits package and their pension rights. The UK armed forces are a mere shadow of their former selves, thanks to the ongoing incompetence of the MOD and the corruption of BAE, and with the current senior officers I see it getting worse. We will soon be a stong as Belgium!

Stephen

Tiny little Belgium produces more steel per year than us, all a part of the deliberate and organized war against British heavy industry which has been waged for decades, and is still being waged to this day.

Adam Hiley

please go to EUtruth.org.uk & Britishconstitutiongroup.com