Royal Ordnance going?

#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
 

ugly

LE
Moderator
#3
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.....
 

untallguy

Old-Salt
Kit Reviewer
Book Reviewer
#6
PassingBells said:
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
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
boris7 said:
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.....
I thought we sold it to the Indians (asian variety, not Cherokee and the like)! :D
 
#8
untallguy said:
PassingBells said:
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
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.
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.
 
#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
luke said:
boris7 said:
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.....
I thought we sold it to the Indians (asian variety, not Cherokee and the like)! :D
There's more than a bit of deviousness left in the Foreign Office, apparently.
 
#15
PassingBells said:
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
I'd suggest that events in the 20th Century make it clear that dependance on overseas supplies is not always a good move.
 
#16
Kitmarlowe said:
PassingBells said:
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

I'd suggest that events in the 20th Century make it clear that dependance on overseas supplies is not always a good move
.
Indeed:
 

ugly

LE
Moderator
#17
If we all needed ammo like flu jabs then the great shell scandal of 1915 would be repeated. Fortunately Uncle Sam will probably be asked to make up the shortfall. I wish we could build a factory in germany, built by the swiss and manned by proper jerries with QA and attentiontion to detail.
 
#18
"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. "
_________________
I have worked quite closely with ths deal and I share these concerns. The whole package is about BAE and their shareholders and they have systematically stripped out RO since they "bought" it such that there is no longer any propellant manufactured in the UK and this latest ultimatum could mean that UK can no longer manufacture and fill shells etc. UK can (at a push) build its own ships, planes and tanks but to lack the capability to manufacture any munitions to fire out of these weapon platforms is crass. Once the explosives factories are closed, they cannot be reopened as some well meaning council will have built homes and schools near to the sites - look at Bishopton.

As to the quote - this happened in Telic OPSEC stops any details here.
 
#19
I am reminded onf the First Gulf War, when Belgium refused to supply artillery rounds for the British Army.

Isn't RO still a world leader in the field of artillery? Didn't they do most of the design for the M777?
 
#20
yanky_loggie said:
[SNIP]
The whole package is about BAE and their shareholders and they have systematically stripped out RO since they "bought" it such that there is no longer any propellant manufactured in the UK and this latest ultimatum could mean that UK can no longer manufacture and fill shells etc. UK can (at a push) build its own ships, planes and tanks but to lack the capability to manufacture any munitions to fire out of these weapon platforms is crass.
[SNIP]
Anyone who expected different does not understand commercial reality (so, that'll be the MoD then). BAe is in business to make money. If it can do that running an onshore ammo manufacturing facility it will. If it can't (as appears to be the case now) it'll liquidate the operation and use the capital liberated to generate value elsewhere. If it did anything else than seek to maximise legal profit the Directors would be sacked.

Don't blame BAe (this time), blame successive governments who decided to privatise ammo manufacture and then refuse to place enough orders to make it financially viable.
 

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