Cammell Laird calls in receivers

The yard was left with an unwanted ship's mid-section

UK ship repair firm Cammell Laird has called in the receivers, putting hundreds of jobs on Merseyside and in the North East at risk.

The troubled ship repair and conversion company - whose shares were one of the best performing of the late 1990s - has had financial difficulties for a number of months.

We are confident that shipbuilding at Cammell Laird remains a viable operation

John Edmonds, GMB union

The decision to call in the receivers comes after an ambitious attempt to break in to the cruise ship building market ran into problems.

The company has also blamed a lack of government contracts, which have tended to go to other UK yards.

Government support

Hopes are high among unions and workers that the yard can continue to operate.

The Department of Trade and Industry has said it will work with the receivers, PricewaterhouseCoopers, to try and find a buyer to rescue the yard.

John Edmonds, general secretary of the GMB union, said, "Obviously the workforce will be very concerned by this announcement, but we are confident that shipbuilding at Cammell Laird remains a viable operation.

"We are also certain that the Government will provide Cammell Laird with the same level of financial and political support that we have seen extended to the farming community over recent weeks.

For us apprentices our contracts guarantee that they must find us a new job but for the older guys this is absolutely terrible

Gary Clinton, Cammell Laird apprentice

"Tony Blair has shown throughout the farming crisis that he is not a Prime Minister who is prepared to see the jobs and livelihoods of working people thrown on the scrapheap."

Welder Dave Hulse, a GMB shop steward at Cammell Laird, said: "We are absolutely gutted but it doesn't mean the end.

"We have briefly spoken to our directors and we are hopeful we can still trade and, with help from the Government, can carry on.

"We have a shipyard full of work and the relationship between ourselves and the management is so good that surely some assistance is in order."

Record enquiries

The current Cammell Laird company grew out of Coastline group which initially rented part of the derelict Cammell Laird dockyard.

In the mid-1990s it changed its name to Cammell Laird, growing from a small operation to employing hundreds as it built a lucrative and profitable trade repairing and refitting vessels.

In autumn 2000 the group recorded a record level of enquiries, totalling approximately £750m, but it failed to convert these into orders, with two major government contracts going to other yards.

Share fall

Cammell Laird's shares were suspended on Wednesday morning at their Tuesday closing price of 6p, valuing the company at £17.3m.

I have no doubt whatsoever that the activities will go on in some form in the two yards in Merseyside and in the North East

Frank Field MP

The shares have fallen more than 90% since November when the company lost a £50m contract to re-fit an Italian cruise ship, called the Costa Classica.

The ship's operator, Costa Crociere, pulled the plug on the order to lengthen the vessel as the ship was sailing to Cammell Laird's yard.

The Merseyside based firm had been due to split the ship in two and insert a new centre portion before fixing all three bits back together to create the longer ship.

The financial problems were made worse by the fact that the centre portion had already been constructed.

Default fears

Subsequently, Cammell Laird has had problems relating to another contract with the US company Luxus to build two cruise liners.

Hopes are high that Cammell Laird will remain viable

Luxus has been re-negotiating the $500m deal, after Cammell Laird failed to win enough money in loan guarantees from the British government to support the contract.

The ship builder is also due to make interest payments on its bond debt within the next few days, but dealers are expecting the company to default.

At the end of the month the firm was awarded a £5m contract by the Ministry of Defence, but this has done little to solve its financial difficulties.

Former minister's concerns

Former social security minister and MP for Birkenhead, Frank Field told the BBC that there were "lessons to be learned".

"Whatever the decision of the present board, I have no doubt whatsoever that the activities will go on in some form in the two yards in Merseyside and in the North East," he said.

"And despite these huge set-backs of trying to enter the big league... there's more work going on in Lairds today than there has been for many months."

He said it had been "immensely" risky for the management to try to move from ship repair to building liners.