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Last Updated: Monday, 11 October, 2004, 10:23 GMT 11:23 UK
Way ahead for shipyards examined
Artist's impression of type 45 warship  HMS Dauntless
Type 45 warships are being built on the Clyde
Discussions which could help shape the future of two shipyards on the Clyde and the naval dockyard at Rosyth are due to take place this week.

The Ministry of Defence (MoD) has been examining sharing out work strategically between the UK's six naval shipyards.

The MoD will meet with senior figures from owners including BAE and VT.

One idea has been merging the ownership of all six dockyards although it is now thought unlikely this will be adopted.

Analysts believe one problem could be the size of stake BAE would have in the merged firm, owning half of the shipyards.

The talks will cover BAE's Clyde yards at Govan and Scotstoun and its submarine base at Barrow-in-Furness in Cumbria.

The challenge is to take advantage of the stability of the next few years to try to make sure there's a healthy future for the industry in the long term
Jamie McIvor
BBC Scotland business correspondent
Also included will be yards owned by VT Group, Babcock and Swan Hunter at Portsmouth, Rosyth and Wallsend respectively.

The bid to find a future strategy for the industry could help secure up to 10,000 jobs.

BBC Scotland business correspondent, Jamie McIvor, said that for many years the military shipbuilding industry has suffered from a cycle of peaks and troughs in work. However, there have been signs of a turnaround.

Work on a series of Type 45 destroyers and the knowledge that there will be two new aircraft carriers built later in the decade have resulted in stability.

He said: "The challenge is to take advantage of the stability of the next few years to try to make sure there's a healthy future for the industry in the long term.

"This week's talks probably won't result in any drastic changes in the short term.

Clyde yard
Talks will look at the way forward for shipbuilding
"But it seems inevitable there will be far more co-operation in the future between the BAE yards, Rosyth and the other yards in England.

"There's speculation you could, for instance, see the centralising of some functions like design but a merger of the yards themselves seems highly unlikely."

Jamie said the industry and the Ministry of Defence both want to see a strategy for a sustainable future which should be good news for most of the 10,000 workers at the yards.

"But there's bound to be some upheaval for individuals along the way," he added.

Nick Granger, director of the Shipbuilders and Shiprepairers Association, said there was certainly up to 20 years' worth of work to keep UK yards going.

But he said there had to be changes in how the industry operates.

'Lack of communication'

He said: "To achieve what the Ministry of Defence as customer wants, the shipyards need to work together much more.

"There needs to be much more co-operation in areas such as research and development, in technology transfer, in innovation generally.

"Co-operation, collaboration is vital, a merger is irrelevant."

Defence analyst Howard Wheeldon said naval shipbuilding had been a "shambles" for the past few years.

He said: "Something had to be done and clearly lack of communication, lack of working together, is the main reason why there has been failure.

"That has to end and I think everybody is being given a big, big shake-up and told 'get your heads together, sort it out, find a way forward'."

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