British export success. jobs!

#1
BBC News - South Korea wins Royal Navy tanker deal worth £452m

South Korea building four supply ships for the RN. Rolls Royce building engines in Singapore/ casings in Italy. I know I know they can all build them cheaper but our skill base is eroding we have high unemployment and I carn't get a small piece of pipe fettled in the midlands whats going on?
 
#2
So what's the answer? Do we accept that we need to retain onshore skills, but must therefore pay over the odds for labour (a decision we have taken in key strategic industries such as nuclear power/submarine manufacture.

Or do we accept that in order to maintain global competitiveness we need to reduce the cost of labour in this country and adjust what our expectations of living standards are?

Personally I think that the latter option is an economic inevitability. We've spent the last 25 years effectively borrowing money from the East to subsidise our living standards, but we haven't created enough relevant, in-demand industry or the skills required to develop it during that period. Lots of reasons why (poor schools, lazy kids, crap parents etc etc etc), but the consequence is that our lack of global competitiveness is catching up with us.
 
#3
Even though it would be cheaper to build these ships in Korea, I'd still prefer to see them built in the UK, as that way the money that HMG spends on them is kept in the UK economy, rather than exporting sterling out to the far east. Probably a very simplified way of looking at things, but still, British jobs for British workers eh?
 
#4
#5
I did a piece on this in my blog (Thin Pinstriped Line: The chances of life on MARS were a million to one, yet somehow its come…), but in a nutshell, excellent news for the RN/RFA. If the UK shipbuilders chose not to bid, then that was their fault. As for Labour complaining - utter hypocrisy as they came up with international competition in the first place.
Yeah, I missed the bit about British shipbuilders not making a final bid for the contract, so, tough shit.

By the way, nice blog, I've been perusing it for a month or so now and without being too gushing, I like it.
 
T

trowel

Guest
#6
#7
HMG have stated, post the Bombardier train contract fiasco, that they will change the procurement regs to consider UK industrial capacity within the evaluation criteria for public competitions. (the rest of europe, and particularly the Frogs have done this for years). Not sure how this fits within the Treaty of Rome principles of fairness and transparency.

The thing is, public contracts are:

a) paid for by us, out of tax revenues. Given the choice of buying something at the global equilibrium price or effectively subsidising UK manufacturing industry via bending the procurement rules, when we could use the money better elsewhere, which option would you choose?

b) In the greater scheme of the UK economy, pretty small beer. The reason UK shipbuilding contracted so severely was that once the far east had developed the infrastructure to build civil ships cheaper than Swan Hunters etc etc, the remaining Government contracts weren't sufficient to keep the industry going (outside of Barrow and the Clyde). The fact is, clinging onto public contracts to subsidise UK industry is just holding back the tide.
 
#8
This is called GLOBALIZATION and the truth is your problem really is not globlisation but bad politicians who borrowed more and bankrupted the system. That is who you should blame not business which only brings back money.

All transitions in businesses have a gestation period abroad till the returns come back to UK. After all those business who save costs do get good returns that come back to Britian, you should tax them more.

India is the 2rd largest investor in UK and Indian companies have saved thousands of jobs in badly run lose makeing companies and turned them back to profit like Cores steel, Jaguar, Land Rover, Tetley, Stanlow etc., India has invested through acquisitions worth £1.52bn in the first half of this year.

This is nothing compared to the 1billion you where supposed to give in 8 years as Aid, that really means nothing. So stop being so negative.
 
#9
Agreed - the problem is that UK military shipbuilding is pretty much maxed out right now doing CVF and T45, and would then need to be doing T26 when MARS was coming on line - there are no other shipyards capable of doing an economically viable set of tankers anymore. The problem for this lies in unionised workforces, old working practises, outdated kit and an unwillingness to realise its no longer the 19th century.

I heard stories of how ships in build in Swans in the late 1990s were coming out of build utterly broken in places, due to intentional damage by the workforce to try to keep them in build for longer. I have no sympathy, nor willingness to support an industry which does not recognise the need to change.
 
#11
It's not just the ships. anyone care to comment as to why Rolls royce are building big bits abroad?
 

Bouillabaisse

LE
Book Reviewer
#13
As Jim30 says, these ships went to full competition because the military yards (read BAE) didn't have capacity to build these at the same time as other warships. Of the 6 initial bidders only one was a British company and they were proposing to build the hull in the far east. In the end the only bidders left were Korean and Italian. The prices from various yards from the last attempt at competition are a poorly-kept secret. The MOD this time round are getting 4 ships for the less than the price they would have paid the cheapest European yard for 3 ships.

Let's face it, even if MOD bought these from a British yard, with extra money to pay the increased costs of doing so, it would not generate a revival in British shipbuilding, not even for export of this class. They'd still be outpriced and outdelivered by Korean and other yards in Asia and eastern Europe. So we'd spunk our money away keep a yard open for these ships and then what? Do it again? We tried that in the 70s and look where it got us.
 
#15
our skill base is eroding we have high unemployment and I carn't get a small piece of pipe fettled in the midlands whats going on?
The operation of the free market (PBUI), of course. Are you some kind of Communist or something that you'd much rather have locally-made than most-profitable-to-supplier?

For shame, sirrah, for shame.
 
#16
I did a piece on this in my blog (Thin Pinstriped Line: The chances of life on MARS were a million to one, yet somehow its come…), but in a nutshell, excellent news for the RN/RFA. If the UK shipbuilders chose not to bid, then that was their fault. As for Labour complaining - utter hypocrisy as they came up with international competition in the first place.
Indeed Sir, but I rather suspect if the fine left wing gentleman from Fife had still been resident in No 10, I'm sure the MInister would be announcing that after exhaustive competitive tendering and taking into account all the factors such as Votes for Scottish and northern MP's, the cheaper and technically safe bid by the Koreans had been kicked into touch and they would have be built late, massively over budget and full of faults 'oop north'.
 
#17
Labour turned their backs of the Shipbuilding in the rest of the UK and poured Billions into shipbuilding in Scotland.
at the same time forcing Yards in other parts of the UK to close and the shotgun marriage of Vosper Thornycroft to BaE systems.
So now the RN will get the ships BAE want to build it not the ships the Navy wants as their is no compition and BAE have a monoploy.
 

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