Another UK Yard to bite the dust

[Tomvart]

Ferguson's Clyde shipyard is apparently set to go into administration according to the BBC a few minutes ago, despite earlier reports of Nationalisation by the Scottish Govt.
How many more?
Article here for those wishing to be depressed.

[BobClay]

The small local shipyard at Appledore closed here a few months ago as well.

[Tomvart]

Fergusons Shipyard is apparently now set for Nationalisation by the SNP, according to the BBC article "The GMB union said nationalisation would secure the immediate future of the yard".

The Scottish Govt will now operate the yard under a management agreement with the administrators, meaning the Scottish government own the yard if no private buyer is found within four weeks.

A sensible lifeline to deliver the ferries in my opinion, I wonder at what cost though, particularly if no work can be found after they have delivered the troubled CALMAC ferries?

[Dartskipper]

You have outlined the problem with any business or manufacturer, Tom. If your product isn't in demand, or competitive in price or quality, no amount of State Aid will make customers buy it.

[Tomvart]

Good point Roy, supply and demand, to be honest, it sounds like Ferguson Marine are stuck between a rock and a hard place under the current contract for the ferries and are reporting that they stand to lose £39M on the build alone, mainly due to slippages cause by the Government / CALMAC fiddling with the design and requirements during the ships construction, sounds all too familiar to me, this was partly the reason that Nimrod MRA4 was scrapped, it doesn't sound to me like they have a rosy future!

[Dartskipper]

A sorry tale, but all too familiar as you say, Tom. Too many cooks making a Horlicks of a recipe that was originally acceptable it seems.

[Varley]

I would be surprised if blood was not extracted by the yard for every change demanded by the 'owner'. Both in monetary terms and in terms of deadlines. If the 'owner' contracts to a sloppy spec. it is not usual for the yard to suffer. If a detail is important to the owner then it should be at the outline stage when the contract is still out for bidding.

[Tomvart]

My thoughts exactly David, no changes should be implemented after passing CDR / Design Freeze.......unless there are additional funding/resources agreed. I think one of the issues here is that CALMAC is owned by the Scottish Government - who also provided huge bridging loans to Fergusons to stop them going bust, gives the supplier something of a weak hand when negotiating and was likely pressured into design changes.

[Engine Serang]

Shaft the taxpayer.

Would Stena or P&O Ferries get into such a pickle? I rather think not.

[Engine Serang]

Many, many years ago I attended a course in RINA, "Contract Management for Ship Construction, Repair and Design", by Ken Fisher. This course guided my actions and decisions and over the years saved my employers much money, lots of money, buckets of money and saved me many sleepless nights.
As a ship manager I would not let any of my superintendents near a contract unless he attended this course and was fully aware of all the risks associated with the building and repair of ships.

[Varley]

The above bodes ill for the recent nationalisation of the IoM steam packet. One of the loud noises that those in the industry made was that should this happen the management would remain independent (not necessarily without re-tendering). The government gave that assurance but I wonder how easy they will find it to keep to it.

Even in successful managements I would follow E-S - certainly targeting the team leaders as well as the troops. On successive new builds any attempt I made to included detail at the outline stage was removed by my manager - 'Only comment in outline to an outline spec.'. When it came to the contract spec., of course, nothing could be detailed differently from the yard without an extra being demanded (I did manage to get the domestic voltage of two bulk carriers increased to 220 from 115 at zero difference, must have saved the yard enough in copper and protection for them to forgive it).

Some of that is a management Vs owning organisation feature. All the review will be, at best, discounted. For a new client as we would be looking to attract the owner as an ongoing management client, to an existing client we would be doing our best to cement the relationship.

Detailed commentary increases the costs to managers while reaping reward only to the owner and any extras subsequently incurred were the owner's alone.

[Tomvart]

Here was me thinking that 'design creep' was a MOD affliction! It seems from comments here that it's quite common across the marine engineering spectrum!
In my time at BAE systems (aero) I witnessed many examples of the MOD requirements managers tinkering with the system requirements and the 'Spec' post CDR, despite dire warnings from the engineering teams, these seemingly small changes only served to destabablise a system design that had sometimes taken years to design, agree and fund. Much of the issue being that complex designs of a 'system of systems' have so many interdependencies upon each other, that even small tweaks here and there have the potential to undermine other systems functionality.

It needs a strong will and fine negotions skills for the supplier to manage this, sadly it looks like Fergusons were dealt a dud hand and were forced into late design changes against both thier advice and will.

I recall a major design change on Nimrod which essentially undermined the whole aircraft design, it occurred after the design freeze just after the critical design review and involved the MOD specifying new engines, to give more thrust, better fuel efficiency and quieter operation. All for the right reasons but sadly implemented at the wrong time, which proved disasterous for the aerodynamic performance of the airframe.
The problem being in Nimrod was the that engines were located in the wing nacelles at the wing root (perfect for a MPA) and as these new BR710 engines were much longer than the originals, the wing area needed to be increased, which had the impact of radically altering the aerodynamic performance of the aircraft when in level flight, BAE's engineering solution to fix this was either break the fuselage aft of the wing and lengthen the distance between the wing and tail, or increase the size of the tail area, the latter solution would require significant aft fuselage strengthening, understandably - both suggested solutions involved unfunded expense and would be time consuming - coming so late in the engineering life cycle. More importantly, they were both unfunded in the contract price, so despite dire warnings from BAE and DERA aerodynamicist at both Farnborough and Warton, MOD went ahead with the engine change without the recommended attending fuselage/tail changes, the resultant aircraft performance in level flight during the flight testing stage was 'as expected' and the MOD subsequently stated that the Aerodynamic performance of the aircraft would be unacceptable in operational use (despite BAE designing a software solution called SAS/SID (stability augmentation system/stall identification device), this was essentially a software programme sat in between the stick and the control surfaces, to smooth level flight and help warn the pilot of an impending stall.
This condition was one of the main reasons stated by HMG of why the platform was cancelled in the notorious SDSR of 2010, the blame, as ever was put on BAE and all remaining MRA4 airframes were childishly destroyed on the apron of the factory where they were built, and the manufacturer was then paid to keep quiet - very simlar to the TSR debacle, which was a far more famous casualty of major design creep.
The cancellation of both programmes were a collosal waste of taxpayers money, because despite the spiralling costs - both aircraft would have delivered huge capability in defence to the UK. The solution to the government created capabilities gap was a trans Atlantic shopping spree to buy far inferior aircraft from the US. Criminal!

[Dartskipper]

Although TSR2 was the classic debacle of government agencies interfering with the development and design of an aircraft intended for a multi role service, all wasn't lost at its cancellation as a lot of the radar technology invented for it was eventually replicated in the Tornado, which fulfilled most of what TSR2 could have delivered, i.e. low level supersonic reconnaissance and weapon delivery.

[Tomvart]

Indeed Roy, much of TSR 2 developed wing technology also appeared in Typhoon.

[Varley]

Typical Grey Funnel to have thought you invented the problem, Tom!

I did mean to include above that I thought there would be value in developing a simple list of the detail to politely add to the outline at the point the managers building team get hold of it (which would probably be after the brokers had sounded out the market with an outline, outline).

A job done once. The boss, the late great T D underwood, claimed the only thing he would sack for was 're-work' the poison of commerce. I am not sure he ever did but that initial stage of specification review was very much an offender.

Sadly this has little to do with providing GB yards with a market merely outlines how the industry might improve its servicing of it if it had one. Although most of the things on my recommendations list would result in less ship rather than more (not necessarily so for those of the Steel man or engineers) were they to get their just credit I am sure it would not bring the product price much close to the Far East's.

[Tomvart]

David, please let me apologise - as I didn't intend my comment reference design creep as derogatory to our MN counterparts, simply that I assumed that commercial building would suffer much less from the constant meddling from the multiple government agencies involved in military procurement projects, many of which are time served experts in providing the integrator with 1000's of conflicting 'Shall' requirements.

[Tmac1720]

There have been some spectacular "cock ups" in the merchant sector. We (H&W) had a cost overrun of almost £200 million !!!! on the Global marine contract. It ended as most of our latter contracts did in a court action over who agreed what, when and with who but of course the paperwork was sadly absent. After much finger pointing as to who allowed the overspend to reach such a level both sides agreed it was a complete bollocks of how to oversee and complete a contract and agreed a draw with each side licking its wounds and vowing never again, but of course we did on the next contract.

[Tomvart]

Wow! That's not exactly a small amount!!
Can I be cheeky and ask your opinion on why it happened e.g. was it design creep or mismanagement of the project (customer or supplier?), or perhaps both?

[Varley]

Originally Posted by Tomvart

David, please let me apologise - as I didn't intend my comment reference design creep as derogatory to our MN counterparts, simply that I assumed that commercial building would suffer much less from the constant meddling from the multiple government agencies involved in military procurement projects, many of which are time served experts in providing the integrator with 1000's of conflicting 'Shall' requirements.

Tom! I was only teasing (and, no, I will not apologise for joking about Wednesday departures!). Tmac's report is rather eyewatering I agree but I guess 'high tech' was involved. A splendid way to increase costs or end up with something no one wants is to have a third party, time charterer, diving company etc. with their fingers contracted to the pie. For such, an 'integrator' sounds like rather a necessity. We were contracted marine consultants (already managers) or a well known diving outfit. They had signed up to a long term charter of a smallish ROV Support vessel building in Rinkoping. The owner, something of a character, had been quite willing to accept any planned modifications to facilitate the charterers needs and wants. These they announced a month or so before sea trials and were not minor. Needless to say there was a conflict and I found myself clearly on the wrong moral bank.

(Ringkoping it was usual to depart for trials aided by the town's fishing fleet as tugs aided by the fire brigade hauling from the opposite side of the dock - outfitting alongside having added the weight to put the new build on the mud).

[Tmac1720]

Originally Posted by Tomvart

Wow! That's not exactly a small amount!!
Can I be cheeky and ask your opinion on why it happened e.g. was it design creep or mismanagement of the project (customer or supplier?), or perhaps both?

You are never cheeky Tom, pain in the ars* but NEVER cheeky Only kidding my friend

Most of the overspend was down to simple bad management in costing and approving changes to the specification during the build phase. Our finance department took their eye off the ball as regards obtaining contract variation cost approval and put simplistically didn't monitor the costs piling up against the contract. As for the shipyard side it could be put down to acquessing with requests for changes or additional work without first obtaining approval from the owner in accepting the cost implications and additional time required. The situation rapidly deteriorated into one where the contract simply ran out of control and it was only when the final reckoning was established was the full horror revealed. Obviously the first reaction of the ship owner was to denly any and all liability for the situation and simply demand proof of agreement to the contract changes which were not available because they were never documented to any official extent. All in all an object lesson in how NOT to manage a contract

[Engine Serang]

Glomar C R Luigs and Glomar Jack Ryan were Yard No's 1739 and 1740. If you couldn't get your sums right on the previous 1738 contracts the Accounts Department must have been full of 11+ failures.
Was enough attention given to the decimal point?
As one wag said, if they had as many Fuller Slide Rules in the Accounts as they had in Design they wouldn't be in a mess now.

[Tomvart]

Originally Posted by Varley

Tom! I was only teasing (and, no, I will not apologise for joking about Wednesday departures!). Tmac's report is rather eyewatering I agree but I guess 'high tech' was involved. A splendid way to increase costs or end up with something no one wants is to have a third party, time charterer, diving company etc. with their fingers contracted to the pie. For such, an 'integrator' sounds like rather a necessity. We were contracted marine consultants (already managers) or a well known diving outfit. They had signed up to a long term charter of a smallish ROV Support vessel building in Rinkoping. The owner, something of a character, had been quite willing to accept any planned modifications to facilitate the charterers needs and wants. These they announced a month or so before sea trials and were not minor. Needless to say there was a conflict and I found myself clearly on the wrong moral bank.

(Ringkoping it was usual to depart for trials aided by the town's fishing fleet as tugs aided by the fire brigade hauling from the opposite side of the dock - outfitting alongside having added the weight to put the new build on the mud).

David, Ringkoping sounds like it was an expensive Scandinavian job, I did some work with Saabs yard (Kockums) in Carlskrona on the Visby and Gavle class ships a few years back, I recall that the costs involved were eye watering! Health and safety costs alone seemed stupendous as most Scandinavians take it very seriously.

That's certainly a novel method of bringing a ship out of the basin too, using the Fishing fleet for towing - pricey?

[Tomvart]

Originally Posted by Tmac1720

You are never cheeky Tom, pain in the ars* but NEVER cheeky Only kidding my friend

Most of the overspend was down to simple bad management in costing and approving changes to the specification during the build phase. Our finance department took their eye off the ball as regards obtaining contract variation cost approval and put simplistically didn't monitor the costs piling up against the contract. As for the shipyard side it could be put down to acquessing with requests for changes or additional work without first obtaining approval from the owner in accepting the cost implications and additional time required. The situation rapidly deteriorated into one where the contract simply ran out of control and it was only when the final reckoning was established was the full horror revealed. Obviously the first reaction of the ship owner was to denly any and all liability for the situation and simply demand proof of agreement to the contract changes which were not available because they were never documented to any official extent. All in all an object lesson in how NOT to manage a contract

Tmac, thanks for the reply mate, what a dreadful state of affairs, sounds like H&W were in turmoil - do you think the causes were due to inexperience by the finance and design teams, or just ineptitude by those in control?

A similar situation happened at Swan Hunters after they were bought out by the late Jap Kroese, they had won 'lead ship' building contract of 2 bay class ASLS ships for the RFA, the contract competition was won while Swans still had a fully manned yard with significant warship building experience and an award winning in house design team, however when the yard was bought, most of that experience voted with thier feet and moved over to Barrow, leaving Swans full of inexperienced contractors, who then made a total hash of the build, eventually - millions over budget and months late, the ship was ignominiously towed away incomplete as I recall, and the yard never recovered, with its once fine reputation shot to sh1t, it was the last shipbuilder on the Tyne and is now an offshore technology park. My grandfather and old man (both engineers in the yard) would be turning in thier graves!

[Varley]

Tom,

For us (not a million miles different from our involvement in Longbow - although considerably faster!) and our client, not specially over the top. The ship was a bit strange but not wildly sophisticated (diesel electric with synchronous motors, pony motor starts not electronic) and variable pitch. Kongsberg simplex DP marked the high point of her basic sophistication. The clever stuff was mobilised by the charterer. It was the considerable list of little things that mounted up against the owner. She was nothing like the displacement or more genuine sophistication of the Seaspread class Multirole Support vessels which would be more the idea of high grade Scandinavian technology.

The shipyards seemed to be a mixture of a family and communal village concern so the use of its fleet and the fire brigade I suspect was not on the balance sheet (the water between the town Hvide Sande could be raised as a last resort but she spent most of the first night out of the yards aground which distorted the main prop blades as well was discovering underpowering problems in the pony motor outfit).

How much of this could have been forestalled by the yard (the basic design had some considerable flaws, too). The Vikings have their problems too. Nordsovaerflet closed in 97.

[Tmac1720]

Tom, put simply the remaining workforce in Harland and Wolff were so demoralised by the influx of foreign management (read fuc*wits) who didn't know the first idea about shipbuilding, they just didn't give a sh1t anymore. Most just wanted to get their day in and if the opportunity arose to get the hell out of there with a full saddlebag of redundancy money. After an average of 25 years service they were not going to throw that away and resign even if there were other jobs to go to, which there weren't.

For example we had a new head of the HVAC department appointed who admitted he had no marine experience, had never worked offshore or on a ship of any kind and came from an ice cream company. We "oul hands" gave up in despair at what was happening but given the state of H&W today perhaps the "plan" has worked out perfectly.