As Unite and GMB members ready themselves for a rally on Saturday (October 23) to save Appledore shipyard in Devon, a damning new investigation reveals what’s at stake if Babcock International decides to shut the site.
The exposé from Boatman Capital Research slammed Babcock, which operates the Appledore shipyard and employs 226 people there, for “systematically” misleading investors by “burying bad news about its performance”.
Fears have been sparked that the 163-year-old Appledore shipyard, among the oldest in the UK, is under threat after failing to secure new orders. The contract for building four offshore patrol vessels for the Irish Naval Service was recently finished; many workers are now being temporarily redeployed to Devonport Dockyard in Plymouth, which involves a four-hour commute as they wait for new work.
But the waiting game has begun to alarm workers and their representative unions, who fear an imminent closure which would devastate local communities. The situation at Appledore has been further exacerbated by the recent loss of a contract to Italian yard Fincantieri.
“As a local resident, I know the effect on local businesses this will have and I fear the decline of the area,” said Unite regional officer Heathcliffe Pettifer. “Considering that the wages at foreign yards can be more than double what Appledore workers are paid, and the cost of some of the recent ships they have built at Appledore were around the £50 million mark, compared to similar ships by competitors at around £125 million a ship, how can this site not be viable?”
Union research has revealed that if the Appledore shipyard were to close and jobs were to be lost, nearly half a million pounds would be lost each year in income tax, with £380,000 lost each year in National Insurance, and £300,000 lost in council tax. Meanwhile the benefits bill would skyrocket by £800,000.
Boatman Capital reported that beyond the cost to communities, closure of the Appledore shipyard would threaten Babcock’s bottom line as well.
The investigation estimated that Babcock will have to buy out the remaining six-year lease on the facility, which would cost about £700,000 each year. Babcock would moreover be slammed with penalties for dumping its lease, in addition to redundancy and pension contributions for the workforce. The total price tag for closing Appledore could run up to £20m, according to Boatman Capital research, which amounts to the 5 per cent of the Babcock’s profits.
Most significantly, the researchers noted, “closing Appledore would also sink Babcock’s ambition to win some future construction work including the Type 31e frigate” as well as “further sour relations with the government.”
Boatman Capital went on to sharply criticise Babcock’s management, suggesting the firm has been poorly run.
Pettifor responded to the investigation by saying “serious questions need to be asked of the top management of Babcock International, following a damning report by The Boatman Capital Research highlighting the toxic relationship between the company and the Ministry of Defence (MoD).
“Our members’ jobs should not be sacrificed because of the apparent incompetence of senior executives at Babcock International,” he added.
Pettifer went on to say that Unite is expecting “an excellent turnout on Saturday as people strongly protest at the threat to close this historic shipyard with the possible loss of 200 skilled manufacturing jobs”.
A petition to save Appledore shipyard has already as of writing garnered more than 7,000 signatures. It is planned to present the petition to defence secretary Gavin Williamson, and Torridge and West Devon MP Geoffrey Cox early in November.
The news comes against a backdrop of the government continuing to refuse to commit to building Royal Navy ships in the UK.
“Ministers have it in their power to award naval shipbuilding orders to Appledore – and they should listen to and act on the concerns of the West Country,” Pettifor warned. “We need to have a grown up conversation about Appledore’s future.”