PPRuNe Forums - View Single Post - MRA4 end of an era & the end of Woodford
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Old 16th Mar 2011, 23:17
  #28 (permalink)  
GrahamO
 
Join Date: Nov 2009
Location: UK
Posts: 382
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@JabbaTG12

Of course, I understand what you're saying (although it seems BAe managed to strong-arm Brown into signing a the Carrier deal that would guarantee keeping Rosyth open and the workforce paid even if the boats were cancelled, so maybe there is a precedent)
The situation with the boats was different. BAE have a contract lasting an additional 15 or so years called TOBA. This guarantees minimum levels of business in the dockyard (not guaranteed to keep both going) which maintains the minimum capability to deliver 'complex' ships I.e. RFA are not covered. In practice, SDSR aside, this would have only been an issue for a couple of years between the drop off of carrier work, and the start of FSC, so signing it was relatively safe.

Along comes SDSR, and changes the rules, but it's far too late. Ship 1 steelwork blocks are practically complete, and virtually all the steel for ship 2 has been delivered, some of the blocks are under construction, and all the long lead time stuff is on order. Putting aside the TOBA minimum levels, cancelling the carriers would mean the MOD would have to pay for the disposal of about 200,000 tons of steel, two thirds of which has already been welded together into hulls. For this reason alone, the decommissioning costs would almost exceed the construction costs thus incurred, plus all the cancellation costs of stuff ordered. It wasn't much due to clever cancellation costs in a clever contract, but more of the practicalities of disposal, of 200,000 tons of steel.

Carving up an MRA4 is easy, a carrier less so.

So why no TOBA for aircraft then? Personal view from me is that aircraft are too complex, too varied and the UK has not really been successful on our own for decades. Pre-SDSR we could not build one on our own, without major problems, and our last two reasonable attempts (Tornado, Typhoon) could not have been done alone without bankrupting the UK. So that, in the round, we have no sovereign manufacturing capabilities to protect whereas in shipbuilding we still do.

It must be bitterly disappointing for all those losing their jobs but the days of maintaining strategic facilities at any cost have gone.

Thought the shipbuilding situation may aid understanding ..... If not offer any succour.
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