"Boris Johnson to take aim at MoD over wasted cash..."

jrwlynch

LE
Book Reviewer
Good news for the cider imbibers, but was building from scratch really the most cost-effective option?
Depends what state the rest of the Temple-of-Doom site was in. In some ways it's lucky there's a site to expand at all and they're not having to start completely from scratch.

Rather more decades than I like to admit ago, I worked at GEC-Marconi's underwater division at Waterlooville, and Templecombe was one of our satellite sites along with Neston, Croxley Green, Filton, and a few others. Now? Waterlooville's a retail park except for one retained facility, the other sites long sold or closed, and the workforce are a small team tucked into a corner of Broad Oak down in Portsmouth.

Industry doesn't keep sites open and workforces trained, skilled and ready for a decade or two just in case MoD deigns to offer a contract: so we've seen a succession of stop-go problems where MoD has delayed and deferred for a few years, only to find that the supplier base has withered (with resulting costs, delays, & problems: see the Astute build, Nimrod MRA.4, Challenger 2 update, any effort to buy new artillery, and so on)

There was meant to be a Defence Industrial Strategy to address some of this: of course it was given a stiff ignoring.


But, unfortunately, there still seems to be an attitude that Abbey Wood can dangle a RFP over the wall and a baying crowd of suppliers will be fighting over who gets it: even where a "steady work flow" is contractually specified, you end up with the Batch 2 River-class OPVs because "delay and defer" is the low-risk option - you'll only be on that desk for two years, any extra costs or difficulties will be your successor's problem...
 

jrwlynch

LE
Book Reviewer
That's not true. There are plenty of businesses where mediocrity is rewarded.
You might manage that for a reporting period or two, but once the cash runs out the business goes "splat".

See, for instance, Marconi in the early 2000s: having decided that the defence and other traditional products from GEC were boring olde-worlde nonsense and divested them, their new chairman leapt full-heartedly into the wonderful heads-we-win-tails-we-win-more one-way bet of the Interweb with its guaranteed profits and certain growth.

So well was this rewarded, that the share price went from about £6 a share, up past £10, more than doubling to £13ish... and then it started to fall, when people noticed that the Internet was not yet actually a guaranteed waterfall of endless revenue. And then the shares fell some more. And fell further. A colleague bought in when they fell below £1 reasoning that this had to be an overcorrection and they'd bounce back - they didn't.

What was the bottom? Well, eventually, Marconi shareholders were told that 99.5% of the company now belonged to its creditors, and they'd get one New Marconi share for every 200 "old" shares they held. If you had less than 1,000 shares, you instead got sent a cheque for compensation, paying you £0.001 per share as full and final settlement.

Anyone heard from George Simpson since then? He even ended up getting hoofed out of his life peerage... not that I'm bitter or glad to see him get a kicking or anything...
 

Cold_Collation

LE
Book Reviewer
You might manage that for a reporting period or two, but once the cash runs out the business goes "splat".

See, for instance, Marconi in the early 2000s: having decided that the defence and other traditional products from GEC were boring olde-worlde nonsense and divested them, their new chairman leapt full-heartedly into the wonderful heads-we-win-tails-we-win-more one-way bet of the Interweb with its guaranteed profits and certain growth.

So well was this rewarded, that the share price went from about £6 a share, up past £10, more than doubling to £13ish... and then it started to fall, when people noticed that the Internet was not yet actually a guaranteed waterfall of endless revenue. And then the shares fell some more. And fell further. A colleague bought in when they fell below £1 reasoning that this had to be an overcorrection and they'd bounce back - they didn't.

What was the bottom? Well, eventually, Marconi shareholders were told that 99.5% of the company now belonged to its creditors, and they'd get one New Marconi share for every 200 "old" shares they held. If you had less than 1,000 shares, you instead got sent a cheque for compensation, paying you £0.001 per share as full and final settlement.

Anyone heard from George Simpson since then? He even ended up getting hoofed out of his life peerage... not that I'm bitter or glad to see him get a kicking or anything...
I remember a rather telling documentary about this.

The previous chairman would walk around the company switching off lights and literally watching every penny. Is/was that so?
 
But, unfortunately, there still seems to be an attitude that Abbey Wood can dangle a RFP over the wall and a baying crowd of suppliers will be fighting over who gets it: even where a "steady work flow" is contractually specified, you end up with the Batch 2 River-class OPVs because "delay and defer" is the low-risk option - you'll only be on that desk for two years, any extra costs or difficulties will be your successor's problem...
A classic example of which is currently ongoing in Tracy island / ABW, where a recently paused competition is having its requirement scrutinised. Nothing particularly wrong with that at first glance, until you understand what's happening underneath.

Imagine an international competition which attracts a significant amount of political flak from UK industry and pollies, despite the UK industry having insufficient technical and industrial capacity to deliver it. The UK contingent, being incapable of meeting the timeline and tender submission requirements undertake a campaign of (very discreetly and not in public) suggesting to MoD that the whole capability is overblown and that the cost is being driven by a particular system required to interface with the primary customer.

The recipients of the whispering campaign buy this hook, line and sinker - not least because the only hard data point they have is a shore-based demo system that cost a particular amount some years ago and it looks - on the surface - expensive. Largely because the shore-based system included all sorts of adjacent items not required for the shipborne one. However, the actual system cost as provided to the international competitors by the OEM is very reasonable and much less in total than said shore-based system. The "whisperers" don't know this, because they didn't trouble themselves to put a proper tender together, so didn't get the system price from the OEM. The MoD don't know this because they only asked for the overall ship price in the tender and have not troubled themselves to ask the OEM. That doesn't stop them - or their consultants - from using that outdated and inaccurate data point to extrapolate from - all the time, blissfully ignorant of what they don't know (classic unknown unknown Rumsfeldism).

The upshot is that a critical capability is stalled and may end up being re-specified without any ability to future proof for a 30+ year life span. The budget will dilute with time (hence increase overall) and worst of all, when it becomes clear to MoD that the UK industry were bluffing they'll have to go out to international shipyards again, who will be even less interested, given the investment they put in first time round. Which means MoD will have to pay them to tender, a bit like T31.

Genius. Allegedly, obvs.
 
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jrwlynch

LE
Book Reviewer
I remember a rather telling documentary about this.

The previous chairman would walk around the company switching off lights and literally watching every penny. Is/was that so?
The MD of our site was hauled over the coals by Lord Weinstock because the water bill was £600 higher than the year before: Weinstock was a believer in the idea that if you avoided wasting pennies, they added up to pounds.

Sometimes too parsimonious, perhaps, but he did build a huge and successful business.
 
I remember a rather telling documentary about this.

The previous chairman would walk around the company switching off lights and literally watching every penny. Is/was that so?
Lord Weinstock was probably the first British business leader to genuinely control costs. IIRC there were six cash ratios which he expected his senior leaders to operate to and woe betide any who failed or bluffed him. But he also very cautious and inward looking; he missed many entrepreneurial opportunities as a result. Failing to grow eventually left GEC vulnerable and also corked risk appetite. When he left, that bloke was shaken: his successor followed a different, high risk strategy.

Weinstock’s leadership of GEC should be on any serious business course.
 

jrwlynch

LE
Book Reviewer
when it becomes clear to MoD that the UK industry were bluffing they'll have to go out to international shipyards again, who will be even less interested, given the investment they put in first time round. Which means MoD will have to pay them to tender, a bit like T31.
And it's frequently forgotten that profit margins aren't large, and bidding comes out of overhead which has to be covered from... somewhere unless the customer actually pays to to put up an offer (rare but it does happen, usually once you've let your supplier base wither away or annoyed them enough they've decided you're a vexatious customer)

An example I sat near, and worked on briefly: back in 1991, clearing sea mines off Kuwait, a need's identified for a one-shot mine-disposal capability rather than the ROVs then in use by minehunters. The RN declare they're really interested but have no spare cash just now for development, but would leap on an operational system if one were offered.

A keen and very skilled engineer (i.e. not me) built a prototype of a vehicle in his garage workshop. It worked well: well enough that the company invested a significant chunk of its own money to develop it, with some success: for instance, one of the prototypes was used to survey the Brent Spar oil platform. The Navy declared themselves delighted... and were keen to buy it... but not just yet... and not next year either... maybe in five years' time?

Then, Op TELIC kicked off, and the Navy needed a one-shot mine-disposal system Very Quickly: so they went to STN-Atlas in Germany and bought their Seafox system as a UOR. This, naturally, didn't affect the export prospects for the Marconi system at all...

Later that year, at a conference at Abbey Wood, a Senior Naval Person explained at length how the major problem with British industry was its refusal to innovate or invest in developing the systems the military wanted, and how business lazily waited to be told exactly what to make and wouldn't move without signed contracts, and that if the British defence industry wanted to succeed it had to anticipate the customers' requirements and develop solutions to them at its own expense. Perhaps sensibly, he wasn't taking questions...

(@Gravelbelly can doubtless offer some of his own horror stories, such as the way the RAF stiffed Ferranti on TIALD)
 
Failing to grow eventually left GEC vulnerable and also corked risk appetite. When he left, that bloke was shaken: his successor followed a different, high risk strategy.
Perhaps; but then, Arnold Weinstock had steered it through a couple of recessions, and built a prime contractor / integrator who had the mass to compete with the US firms who dominated the market; and did so while putting £4bn in the bank. No mean feat.

George Simpson, however, was an utter moron on a par with Fred Goodwin. "I know, let's flog off all that boring defence rubbish to BAe, call ourselves Marconi and turn ourselves into a telecomms giant! I'm a business giant, look at meeeee!" was followed by p!ssing away billions in the bank, and billions from the sale of the defence group, for stupid purchases of some vastly-overvalued companies.

Fairly soon, Marconi was broke, and worth absolutely zero; their share certificates weren't worth the paper they were printed on...

Weinstock’s leadership of GEC should be on any serious business course.
...but the impact of divisional MDs who blindly followed the "cost control at all costs" mantra should also be considered. Ferranti was bought by GEC in 1990; and in a fit of confidence, they immediately put the GEC radar group (Nimrod AEW, Foxhunter - notably problematic) under Ferranti control (Seaspray, Blue Vixen, Blue Kestrel, just won ECR90 - notably successful).

Anyway, there was a recession in the early 90s; and a shrinkage of defence budgets post-GRANBY; and the takeover resulted in a few thousand redundancies in Edinburgh alone. By the mid-90s, after a two-year pay freeze, a "total payroll to increase by no more than 2%" directive (even though inflation was 5%) ran into the wall marked "defence industry pay is below par, you're losing a lot of your trained engineers to commercial firms".

Our resident genius MD (one of four, over five years) decided that the solution was a pay freeze across the board for all non-professional staff; so that his 2% could be focussed on keeping the radar designers from walking out the door. Unsurprisingly, the union weren't too chuffed about the lowest-paid on site from taking yet another >5% effective pay cut, and called for a series of one-day strikes on Wednesdays. Although most professional staff weren't in the union, we had a lot of sympathy for the cooks, cleaners, and clerks - and we started taking one-day holidays on Wednesdays.

The management response was to declare that one-day holidays on a Wednesday were banned; and that any professional staff who refused to cross a picket line would be sacked. Which is illegal, but who could afford to call the company's bluff in a recession and a tight job market?

The staff response was that four or five months later (three-month notice period, plus a month or two to look for a job) a lot of our more saleable engineers decided that they didn't really want to work for a firm that screwed hundreds of people over, without a second thought.

What was interesting was a letter that came out of GEC Head Office, making the point that all this money stuff was all very well, but you had to treat people with respect. The response at a local level was to wonder how Weinstock couldn't see that creating a "numbers are all that matters" management culture where it took fifteen different signatures to carry out a basic purchase of supplies, might just make us think that he was either a screeching hypocrite, or an out-of-touch and incompetent tosser. Any claims that "he didn't realise what was going on at ground level" sounded awfully similar to the CO of 1QLR, after Baha Mousa: "I didn't know, I had no idea".

What was also interesting was that the new MD (after the old one strangely chose to pursue opportunities elsewhere), turned out to be rather impressive. Several key projects were put back on track by getting away from the old obsession with internal cost-control processes and controls, and saying "There's the target date. Just make it, and the charge codes won't matter". It worked.
 
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Grownup_Rafbrat

LE
Book Reviewer
(@Gravelbelly can doubtless offer some of his own horror stories, such as the way the RAF stiffed Ferranti on TIALD)
Ahhhh, TIALD. As ever, @Archimedes and @Magic_Mushroom are the subject matter experts for this one.

So: it's 1990, and the state of the art for aiming your laser-guided bombs is an item of US kit called PAVE SPIKE. Put a thermal camera and a laser in a pod; give the talking baggage a screen and a cute little joystick to steer it around and point the shiny light at the thing you want explosively disassembled. Comes GRANBY, and the BBC news gets lots of camera footage of it doing its thing over Iraq.

There are a couple of limitations; it isn't well stabilised, so the talking baggage has to put a lot of effort into keeping the little crosshairs pointed at the target, regardless whether Biggles in the front seat has decided that staying at the same altitude (or flying in a straight line) are not activities that will enhance your survival prospects; and that a 4G turn is just the thing to avoid an untimely end over downtown Iraq.

Fortunately, Ferranti's Electro-Optics Division, then based in a converted jam factory in Edinburgh's Robertson Avenue, has been working on this problem for a year or four. They've come up with a two-channel, stabilised pod. The talking baggage can choose thermal or TV camera; and the camera / laser designator is stabilised so that once you point it at something, it tries to stay pointing at it regardless of how hard Biggles in the front is, errr, waggling his stick. Cutting-edge stuff, better than anything the Americans or Israelis have, shiny...

In fact, they've got two pre-production pods doing trials in 1990; apparently, the innards were still wire-wrapped, and they were bedding down the software and hardware, but it was at the stage where it could be taken out for a walk without embarrassing itself by leaking all over the back of the car. Gloss white paint job, dead sleek, just the thing to put on the stand at Paris or Farnborough.

So... comes Christmas 1990, and the RAF decides that actually, this JP233 is all very well - but medium level is the way ahead, and it could do with some airborne laser designation. A squadron of Buccaneers, as the only aircraft in the RAF that has PAVE SPIKE integrated, gets the good news that it too is going to war (I got to listen to a presentation by a UAS Squadron Leader, who'd spent the air war living on the 15th floor of the Dhahran Hilton, just underneath the all-night disco, and flying his Buccaneer over Iraq on alternate days).

About the same time, some bright spark in the RAF asks whether they can take the TIALD trials pods for a live-firing trial (because it's fitted to Tornado GR.1), and otherwise they're never going to hear the end of it from all those smug Buccaneer pilots from 12 Sqn. There's a certain amount of sucking of teeth, crossing of fingers, and perhaps even a minor sacrifice to the gods of engineering (black cockerel, silver knife - or an unwary intern, either will do), and Ferranti says yes. The two trials pods are given a quick spray-can of sand-coloured paint, some felt-tip nose art ("Sandra" and "Tracy" - the Fat Slags of Viz comic), and off they head to war. Where they "just work", and hopefully impress everyone with the Godlike Status of Edinburgh Engineers. Yeah, right. If you're ever in Abbey Wood, you may see one of those pods on a plinth - paint job and nose art still in place.

Afterwards, the commercial blokes are turning f***ing cartwheels. Huge success, user delighted, customer impressed. Electro-Optics Division has bet the farm on this one, and invested heavily - surely now the production contract will be signed, and the accountants can breathe a sigh of relief?

"Yup!" says MoD. "We're absolutely chuffed to f**k. So grateful. anything we can do, you name it"

"Ahhh, how about buying some of them, then?"
asks Ferranti. "After all, it's damn near off-the-shelf now, and we're really short of cash".

"Errr"
says MoD, "Hold on, ummm capital budget, err peace dividend, ahhhh chequebook in other coat, oh bugger the cat's eaten it, maybe next year, just waiting for that defence review, any day now..."

It took several years, and an eventual order for somewhat fewer pods than had originally been agreed. By then, Ferranti had actually gone bust and rescued by GEC (who were chuffed to bits that the Monopolies and Mergers Commission was going to be put in its box over a merger with their biggest competitor in the avionics business, because jobs in Conservative marginals).

I'm sure someone else can tell the sorry tale of LR TRIGAT - I seem to remember that BAE got as far as starting to build a production facility before MoD canned the contract. Or the 81mm MERLIN round (a radar-guided "smart" mortar round, able to rain top-attack death on the Massed Hordes of 20th Guards Tank Army).
 

Yokel

LE
But surely Westlands/Leonardo simply produce what the customer (in other words MOD) tells them to build? Merlin HM2 and Wildcat HMA2 are real winners and provide world beating capabilities to the RN?

Also Merlin HC4 and Crowsnest.....

There is a strategy to do with helicopters, but it seems confused to say the leaat.
 
But surely Westlands/Leonardo simply produce what the customer (in other words MOD) tells them to build? Merlin HM2 and Wildcat HMA2 are real winners and provide world beating capabilities to the RN?
If so why are there not many in use around the world?
Also Merlin HC4 and Crowsnest.....
Likewise and delayed due to "IT issues"
 

Yokel

LE
If so why are there not many in use around the world?

Likewise and delayed due to "IT issues"
Naval Wildcat has been exported - the Republic of Korea Navy uses them for ASW with dipping sonar. I have no idea who else has/will buy them. A lot of Super Lynx are doing sterling service.

As for the Merlin HM, I think not many nations need the same level of ASW capability as the UK.

The final Merlin HC3 is being converted to HC4 standard and full shipborne capability. I believe the Crowsnest trials are ongoing.

But anyway - my point was that industry produces what Government orders.
 
Naval Wildcat has been exported - the Republic of Korea Navy uses them for ASW with dipping sonar. I have no idea who else has/will buy them. A lot of Super Lynx are doing sterling service.

As for the Merlin HM, I think not many nations need the same level of ASW capability as the UK.

The final Merlin HC3 is being converted to HC4 standard and full shipborne capability. I believe the Crowsnest trials are ongoing.

But anyway - my point was that industry produces what Government orders.
Lynx did well, Wildcat - bigger, butcher, much more expensive, floundering in the face of the SH-60 Romeo.
well, if you move out of your bespoke niche, into a bigger niche, you get to play with the grown ups.

Merlin? Total flop, we’re the biggest user in the world by a country mile.
Military Sales have been dismal of an inherently very flawed design.


Lynx was a hobby project by Westland for a civil military utility helo, government thought, that’s nice, and bought it. It’s always been a bit frail and smaller than ideal.

Merlin started off as a military requirement to build a new ‘sea king’, politicians got involved in Euro jointery, and we ended up with a much bigger helicopter, with a rotor disk sized no bigger than a sea king - with all the problems that’s brought. It’s needlessly complex and far too prone to folding its ‘computer says no’ arms.
 
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Ahhhh, TIALD. As ever, @Archimedes and @Magic_Mushroom are the subject matter experts for this one.

So: it's 1990, and the state of the art for aiming your laser-guided bombs is an item of US kit called PAVE SPIKE. Put a thermal camera and a laser in a pod; give the talking baggage a screen and a cute little joystick to steer it around and point the shiny light at the thing you want explosively disassembled. Comes GRANBY, and the BBC news gets lots of camera footage of it doing its thing over Iraq.

There are a couple of limitations; it isn't well stabilised, so the talking baggage has to put a lot of effort into keeping the little crosshairs pointed at the target, regardless whether Biggles in the front seat has decided that staying at the same altitude (or flying in a straight line) are not activities that will enhance your survival prospects; and that a 4G turn is just the thing to avoid an untimely end over downtown Iraq.

Fortunately, Ferranti's Electro-Optics Division, then based in a converted jam factory in Edinburgh's Robertson Avenue, has been working on this problem for a year or four. They've come up with a two-channel, stabilised pod. The talking baggage can choose thermal or TV camera; and the camera / laser designator is stabilised so that once you point it at something, it tries to stay pointing at it regardless of how hard Biggles in the front is, errr, waggling his stick. Cutting-edge stuff, better than anything the Americans or Israelis have, shiny...

In fact, they've got two pre-production pods doing trials in 1990; apparently, the innards were still wire-wrapped, and they were bedding down the software and hardware, but it was at the stage where it could be taken out for a walk without embarrassing itself by leaking all over the back of the car. Gloss white paint job, dead sleek, just the thing to put on the stand at Paris or Farnborough.

So... comes Christmas 1990, and the RAF decides that actually, this JP233 is all very well - but medium level is the way ahead, and it could do with some airborne laser designation. A squadron of Buccaneers, as the only aircraft in the RAF that has PAVE SPIKE integrated, gets the good news that it too is going to war (I got to listen to a presentation by a UAS Squadron Leader, who'd spent the air war living on the 15th floor of the Dhahran Hilton, just underneath the all-night disco, and flying his Buccaneer over Iraq on alternate days).

About the same time, some bright spark in the RAF asks whether they can take the TIALD trials pods for a live-firing trial (because it's fitted to Tornado GR.1), and otherwise they're never going to hear the end of it from all those smug Buccaneer pilots from 12 Sqn. There's a certain amount of sucking of teeth, crossing of fingers, and perhaps even a minor sacrifice to the gods of engineering (black cockerel, silver knife - or an unwary intern, either will do), and Ferranti says yes. The two trials pods are given a quick spray-can of sand-coloured paint, some felt-tip nose art ("Sandra" and "Tracy" - the Fat Slags of Viz comic), and off they head to war. Where they "just work", and hopefully impress everyone with the Godlike Status of Edinburgh Engineers. Yeah, right. If you're ever in Abbey Wood, you may see one of those pods on a plinth - paint job and nose art still in place.

Afterwards, the commercial blokes are turning f***ing cartwheels. Huge success, user delighted, customer impressed. Electro-Optics Division has bet the farm on this one, and invested heavily - surely now the production contract will be signed, and the accountants can breathe a sigh of relief?

"Yup!" says MoD. "We're absolutely chuffed to f**k. So grateful. anything we can do, you name it"

"Ahhh, how about buying some of them, then?"
asks Ferranti. "After all, it's damn near off-the-shelf now, and we're really short of cash".

"Errr"
says MoD, "Hold on, ummm capital budget, err peace dividend, ahhhh chequebook in other coat, oh bugger the cat's eaten it, maybe next year, just waiting for that defence review, any day now..."

It took several years, and an eventual order for somewhat fewer pods than had originally been agreed. By then, Ferranti had actually gone bust and rescued by GEC (who were chuffed to bits that the Monopolies and Mergers Commission was going to be put in its box over a merger with their biggest competitor in the avionics business, because jobs in Conservative marginals).

I'm sure someone else can tell the sorry tale of LR TRIGAT - I seem to remember that BAE got as far as starting to build a production facility before MoD canned the contract. Or the 81mm MERLIN round (a radar-guided "smart" mortar round, able to rain top-attack death on the Massed Hordes of 20th Guards Tank Army).
That's about the size of it.... The RAF's interest in something like TIALD (Pave Spike was daylight only and didn't fit the Tornado GR1's CONOPS) was long-standing, and its arrival - along with the Buccaneers - turned the TGR force into one of the leading PGM delivery assets for the coalition. Much influence gained with the US as a result, a lesson promptly chinned off by the Treasury so that it got to the point where the CAS of the day had to explain to Mr Major that the RAF was about to be written out of all the NATO strikes in Bosnia because none of its aircraft could self-designate, apart from a few Tornados...

A hurried integration - done by the RAF and involving some computer game designers rather than BAe - of TIALD on the Jaguar (which wasn't meant to get it) then followed, and the government didn't face questions about why one air force was being left out of operations for want of a capability the government had noted was so useful in 1991. It appears that explaining that TIALD had been rushed into service on the TGR on an interim basis, and Ferranti then left swinging in the wind while the world-leading kit the RAF really wanted went unfunded wasn't something the government wished to do...
 

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