Deputy First Minister Kate Forbes at Ferguson Marine
Ferguson Marine boss vows to mount 'aggressive' bid for ferries against 'unfair' foreign competition
The boss of Ferguson Marine has vowed to bid “aggressively” for CalMac’s next ferries contract, but complained the yard would be up against “unfair competition” from foreign rivals backed by their governments.
The claim from interim chief executive John Petticrew came despite Deputy First Minister Kate Forbes justifying £14.2 million of new funding for the Scottish Government-owned yard during a visit on Thursday to help it win such contests.
Mr Petticrew said of the seven small CalMac electric ferries: “We will aggressively bid for them and hopefully win in the ball park - 100 per cent we have the experience.”
He said he accepted ministers’ decision not to directly award the order to the yard, for which the GMB union had campaigned. Ms Forbes said it would have risked legal wrangles delaying the ferries’ construction.
Mr Petticrew said: “We are not asking to be given it now. We have to bid against unfair competition - because the countries we’re bidding against, we all know that their governments are putting money into those shipyards.”
Industry sources have told The Scotsman the yard is not expected to win the contest, which is part of a £175m programme for routes such as to Gigha and Iona.
However, it is seen as much more likely to be in the running for a further three larger electric ferries for routes such as Mallaig to Armadale in Skye.
Mr Petticrew had been scheduled to join Ms Forbes to answer questions from the media after her visit, but did not appear until it was asked why he was not there.
He said the yard was also seeking other work and that it must diversify further from building ferries.
Mr Petticrew said: “We are looking at our overall business plan if we weren’t to get this contract. There is other work out there.
“We need to stop focusing on ferries. There are patrol ships out there, SOVs [service operation vessels for offshore wind farms] out there, there are oil companies who are willing to come here at a premium to bridge the gap between us and foreign competition.”
Ms Forbes said the yard was also optimistic of winning a deal with BAE Systems to provide the equivalent of “half a ship” for the type 26 frigate programme for the Royal Navy, having already completed small-scale steelwork orders for the warships.
She said other organisations needed new boats built, such as replacements for Highland Council’s ageing vessels operating the Corran ferry, south of Fort William.
The boss of Ferguson Marine has vowed to bid “aggressively” for CalMac’s next ferries contract, but complained the yard would be up against “unfair competition” from foreign rivals backed by their governments.
The claim from interim chief executive John Petticrew came despite Deputy First Minister Kate Forbes justifying £14.2 million of new funding for the Scottish Government-owned yard during a visit on Thursday to help it win such contests.
Mr Petticrew said of the seven small CalMac electric ferries: “We will aggressively bid for them and hopefully win in the ball park - 100 per cent we have the experience.”
He said he accepted ministers’ decision not to directly award the order to the yard, for which the GMB union had campaigned. Ms Forbes said it would have risked legal wrangles delaying the ferries’ construction.
Mr Petticrew said: “We are not asking to be given it now. We have to bid against unfair competition - because the countries we’re bidding against, we all know that their governments are putting money into those shipyards.”
Industry sources have told The Scotsman the yard is not expected to win the contest, which is part of a £175m programme for routes such as to Gigha and Iona.
However, it is seen as much more likely to be in the running for a further three larger electric ferries for routes such as Mallaig to Armadale in Skye.
Mr Petticrew had been scheduled to join Ms Forbes to answer questions from the media after her visit, but did not appear until it was asked why he was not there.
He said the yard was also seeking other work and that it must diversify further from building ferries.
Mr Petticrew said: “We are looking at our overall business plan if we weren’t to get this contract. There is other work out there.
“We need to stop focusing on ferries. There are patrol ships out there, SOVs [service operation vessels for offshore wind farms] out there, there are oil companies who are willing to come here at a premium to bridge the gap between us and foreign competition.”
Ms Forbes said the yard was also optimistic of winning a deal with BAE Systems to provide the equivalent of “half a ship” for the type 26 frigate programme for the Royal Navy, having already completed small-scale steelwork orders for the warships.
She said other organisations needed new boats built, such as replacements for Highland Council’s ageing vessels operating the Corran ferry, south of Fort William.
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NewsTranscript
00:00I'm Alistair Dalton, the Scotsman's Transport Correspondent at the Ferguson Marine shipyard
00:18at Port Glasgow, where the Deputy First Minister, Kate Forbes, was visiting today a couple of
00:25days after announcing a £14 million government investment to make the shipyard more competitive
00:32and be able to win orders on the open market.
00:36Deputy First Minister, realistically the yard is not going to be able to win these first
00:42seven electric ferries on the open market. Isn't it much more realistic that they all
00:47have a good chance of winning the second chance of three further ferries?
00:52You raise a very interesting point about the work that is right for Ferguson's and at the
00:57right time. My ambition for Ferguson's is to secure this investment, to modernise the
01:04yard over the next year and a bit, and in that time be also seeking to bid for more
01:11work.
01:12Now it will be for them to decide whether or not they put a bid in for this initial
01:17contract. That's up to them. If they do, they will need to think creatively and how
01:23they ensure that they are competitive. But there is an opportunity with the second small
01:27vessel replacement programme for them to consider a bid. I should also say though that there
01:33are other contracts and other options that they are considering in the meantime.
01:37Now I'm not going to break the commercial confidentiality of the choices that they make,
01:43but anyone will know that there are other areas and authorities that are also looking
01:48for boats to be built.
01:50You've been assured by Ferguson Marine Management today that Glen Sannox will be completed by
01:56its latest date of mid-August. Were you also given assurances about Glen Rosa being finished
02:03in September next year?
02:04Well I sought assurances on the timetable of the Glen Sannox and the Glen Rosa. I go
02:11on the basis of those assurances, based on evidence of the progress that they are making.
02:16And whilst they were open about the challenges that they've had, the complexities of both
02:22boats, they were very optimistic about the Glen Rosa because they were able to come at
02:28a much earlier stage in the boat, learn all the lessons from Glen Sannox and ensure they
02:34weren't repeated.
02:35And with these contracts coming to an end and fewer workers involved with them, will
02:39the yard have enough work to continue with its full workforce?
02:44Well this is precisely why I am really encouraged by the advanced conversations that they are
02:53having with BAE Systems. Because one worker talked about these complex units as being
02:58essentially half a ship. So those units will employ some tradesmen more than others. So
03:07with particular work, for example, for welders, that will be a lot of work there. But having
03:14just met with some of the apprentices, we do need to make sure that there's alternative
03:18work, for example, for painters and pipefitters who are more employed in constructing ships
03:25than in constructing the BAE units.
03:28That BAE work sounds significantly larger than the steel work that Focus on Marine has
03:34done for them so far. How soon would you expect that work to start?
03:38Well they've obviously been engaged in a pilot. They are discussing this with BAE Systems.
03:45But my understanding is that BAE Systems have a workbook that is decades long. And that
03:55means that there is significant and substantial work that they need to be able to secure now
04:01and as quickly as possible in order to meet the work that is coming.
04:06And finally, Focus on Marine have been engaged in building some of CalMac's biggest ferries.
04:13The work it's likely to move on to is on a much smaller scale. Doesn't that mean there
04:18will be redundancies which are an unbelievable part of their business plan?
04:21Well, two points if I may. The first is that bear in mind that Focus on Marine have a track
04:27record with building these smaller ships. It's often lost that actually in the last
04:32few years they have delivered, I think if memory serves, three of these small vessels.
04:38So they're able to do it. They're good at it. And that's why I think that they should
04:42carefully consider where and how they bid.
04:45But the second thing is in terms of right sizing or ensuring that the workforce is the
04:51right shape and with the right trades in it, that will be an important decision for Ferguson
04:58management. There's obviously been a lot of agency staff, particularly when a boat
05:03nears completion and they're trying to ensure that it meets the target date. But that will
05:08be a decision ultimately for them. And the unions are heavily involved with those conversations
05:13and I've had conversations with the unions directly about ensuring that the workforce
05:19is the right shape with the right components.
05:23There was a somewhat unexpected twist to her visit. She should have been accompanied by
05:28the Yard's interim chief executive, John Pettigrew, in answering questions from the media.
05:34He was nowhere to be seen and then was brought out in front of the cameras.
05:40He confirmed that the Yard would be putting in a bid for seven new small electric ferries
05:48for CalMac, but he said that he may be competing against foreign Yards which he said would
05:57have unfair advantage by being supported by their governments.
06:02No, frustration's not the word. You listen to the Minister there. I think we need to
06:08invest in this company for the future. I think we need to concentrate on finishing these
06:13ferries right now. Concentrate on getting the workforce to the standard we need to get
06:17for future work. I think we've got to look long term rather than short term. We will
06:22bid for them, we will aggressively bid for them and hopefully we're in the ballpark.
06:26Do you think you've got the experience for it?
06:28100%. 100% we have the experience.
06:30Why should you get this contract though, given the problems that have been building Glen
06:35Sanics and Glen Rosa?
06:37I can't speak to the past. I've been here just over two and a half months. We've made
06:42improvements. We made mistakes in the past. We're lessons learned. You're going to see
06:47those lessons learned going on to Glen Rosa. We're not asking to be given it now. It's
06:52gone. It's not going to be a direct award. We have to bid against, in my opinion, unfair
06:58competition.
06:59Why is it unfair?
07:01Because the countries we're bidding against, we all know that their government is putting
07:08money into those shipyards.
07:10Earlier this week I spoke to a man who used to work here. He only retired a couple of
07:14years ago and he feels that there's a big skill shortage because there are lots of new
07:18apprentices and lots of people at the end of their careers retiring and there's not
07:22that kind of middle ground. Would you agree with that?
07:24I would and we've got to address that. But I would say that's the same in every shipyard
07:30in Britain because there is a huge pool of awards going across the world just of recent.
07:39There's a new frigate program going to start in Saudi Arabia. So they're going to be able
07:43to throw money at people to get them to go there. So it's a problem we all have. We share
07:49conversations with Babcock, we share conversations with BEE on how we're going to bring that
07:54pool together because we're all in the same business. We're the commercial ones, they're
07:59the great ship ones. So we're not in competition with them. So what we've got to do is offer
08:04the young people a sustainable future and that's what this 14.2 is going to give us.
08:08What does the future of this yard look like if you do not win this contract?
08:13We're looking at the overall business plan if we weren't to get this contract. There
08:19is other work out there. Guys, we need to stop focusing on ferries. There are other
08:24ships out there, there's patrol ships out there, there's SOVs out there, there are oil
08:29companies who are willing to come here at a premium, not a huge premium, but they're
08:34willing to bridge the gap between us and the foreign competition.
08:37Just finally, Mr Pettigrew, you mentioned unfair competition or what could be regarded
08:41as unfair competition from some foreign yards. If they were to win the work on these new
08:46ferries instead of this yard, just how would you feel then?
08:50I'd be disappointed.