Royal Ordnance going?

Discussion in 'Current Affairs, News and Analysis' started by hansvonhealing, May 22, 2007.

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  1. The Times
    May 22, 2007

    British Army may turn to foreign bullets as Royal Ordnance struggles for profits
    David Robertson, Business Correspondent

    British soldiers may be forced to use German or French bullets in future, as BAE Systems could shut down its Royal Ordnance munitions factories, The Times has learnt.

    The Ministry of Defence (MoD) is renegotiating its ammunition contract with BAE and has started to sound out European suppliers as an alternative.

    Sources close to Royal Ordnance say that BAE, which bought the Royal Ordnance factories in 1987, is demanding a new longer and more lucrative contract to cover the investment needed to modernise its factories.

    However, the MoD is concerned that it will be paying more for British bullets, explosives and artillery shells than it would do if it bought them on the open market. The MoD, which spent £280 million on munitions last year, is trying to determine whether national security would be threatened by not having a domestic bullet-making capability. As many components used in BAE’s munitions products are imported already, officials believe that making a switch to other suppliers may be less politically sensitive now.

    Royal Ordnance, which traces its history back to the founding in 1560 of the Royal Gunpowder Factory at Waltham Abbey, has been in decline since BAE bought it, with the number of factories cut from 16 to five. Another two face closure. BAE has even scrapped the name Royal Ordnance, calling the division BAE Land Systems (Munitions and Ordnance).

    It is rumoured to be loss-making and the impending end to BAE’s supply contract with the MoD next year has forced the company to assess the division’s future.

    Mike Turner, chief executive of BAE, told The Times this year: “It has been a difficult part of the business for our shareholders.”

    Defence sources familiar with BAE’s strategy said that if the company can get a better deal from the MoD, Royal Ordnance will survive. If not, BAE’s management is planning to close it down.

    A BAE spokesman said that BAE Land & Armaments, which encompasses Royal Ordnance, was returning to profit but would not comment on the munitions division’s financial status.

    He said: “We are in discussion with the MoD with regard to the future of ammunition supply for UK Armed Forces.

    Saying that we are planning to shut down the division is nothing but speculation.”

    A spokesman for the MoD said: “Long-term security of supply for general munitions is vital and we are putting in place arrangements to achieve this. BAE has submitted [its] proposals and we are working with [it] on a solution that delivers security of supply and value for money to the taxpayer.”


    £280m

    — amount the Ministry of Defence spent on munitions last year


    11

    — number of Royal Ordnance factories closed since BAE took over in 1987


    http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article1821505.ece

    No guns, now no ammo?
     
  2. After last year's fiasco, you would have thought that the powers that be would have learned something.

    The cynic in me asks where this story came from and whether it was a leak by BAE to put pressure on the MOD.

    At the end of the day, it doesn't really matter where the ammunition comes from so long as when we need it (ie in an emergency) we can guarantee that, a) we'll have enough and, b) it works when we do get it.

    PB
     
  3. ugly

    ugly LE Moderator

    RO run by nasty bean counters. they and maggies desire to sell off the remaining family jewels which this current crop of clowns are desperate to perpetuate led to the adoption of the L85 series and all those years of grief.
    We must retain an arms manufacturing base if we are to project our forces around the world. We already have seen what buying cheap foreign contract ammo does. By the way we stopped producing propellant for small arms a while ago, we buy from Johnny Frog now!
    Heaven help us if we cant even make our own decent amo to fire from our refurbished in Germany rifles.
     
  4. I am covinced that UK PLC (Blurs Model) has a plan for the future UK armed forces and its integration to Euro Force.
    Bye bye old establishe UK suppliers hello Europe and all you have.
    john
     
  5. approx 1974/5.....MOD took a huge delivery of 9mm from Pakistan.....
    when used a lot of stoppages and mis-fires recorded......if memory serves me right.....entire supply was dumped out at sea.....
     
  6. untallguy

    untallguy Old-Salt Reviewer Book Reviewer

    In an emergency, suppliers could put the price up - either to make a profit at our expense or because the US has bought up all the stock and therefore it becomes a sellers' market (high-quality charcoal for respirators anyone?) - or may turn round and say, "We don't like the war you're fighting, buy from someone else."

    Unless we control it, we cannot guarantee anything about the supply chain. If we sell this stuff off, we run a risk.
     
  7. I thought we sold it to the Indians (asian variety, not Cherokee and the like)! :D
     
  8. My bold but i seem too recollect this has happened once already, selling RO is as some have said the last leavings of the family silver.

    Why on earth we should be suprised is beyond me and let us face it why do we meed any manufacturing, when we can be dependant of cheap imports :shakefist:

    I would of course like to blame Liabour singly and totally for this however the 'tories' started it, with options for change, its nice though that B'Liar party continue's the worst of conservative policy.

    I would not also be suprised too see one of the faces in the public trough will beifit someway from this proposed sale.

    Perhaps i need to get down too ASDA and bulk buy tinfoil :x
     
  9. It's a bit late to worry about RO being sold off, it happened a couple of decades ago. RO is not now even a trademark.

    (BTW, vicious rumour at the time was that BAe got RO for a bargain price to make sure that BAe didn't sue the arrse out of RO (ie the Govt) for making a complete and utter mess of a missile motor project.)

    BAe are a company, they exist to make profit. If MoD can't or won't guarantee enough work to justify investing in new plant they they won't. End of. Expecting anything else is foolish (which is good for your pension scheme).

    This is of course why the R in RO stood for Royal. It used to be policy to build oversized state arms factories that in peacetime were highly inefficient and state subsidised - so that in wartime production could be ramped up hugely quite quickly. RO was never a viable business, it was an insurance policy paid for by the state. Successive Govts have decided to do away with that insurance.
     
  10. I don't see why the MOD can't front up for a better deal with BAE on this. It's not like we arn't using a lot of small arms ammunition at the mo, is it.

    I suppose it would make for a short term gain to go abroad for ammo. It would need some real ironclad contrcts to ensure quantity and quality when we need it most though.

    Just one more nail in the coffin of Britain's industrial sector.
     
  11. Nationalise it. Then build a nationalised propellant (powder) factory.
     
  12. I'm sure BAe / RO will open up their books to the MoD, prove that their not taking us for a ride on the pricing and carry on as normal. :)

    If they lose the contract it will be because either :

    a) they are inefficient
    b) they have no political support
    c) they have a poor sales team

    Was it BAe / RO who were making and exporting stun batons, leg iron etc to the Saudi's and Chinese? I seem to remember a program 5 or so years ago. Panorama? I forget.
     
  13. I say this with sadness........this government does a real good job screwing up our servicemen with duff kit and arms/munitions....no real enemy would bother invading the UK......they would leave it to Tony & Co
    to do the job!!!!!!
     
  14. There's more than a bit of deviousness left in the Foreign Office, apparently.
     
  15. I'd suggest that events in the 20th Century make it clear that dependance on overseas supplies is not always a good move.