BAE Clyde yards worth £392m to the economy

12 May 2008

by Mark Smith, The Herald

The value of BAE Systems' shipyard business on the River Clyde to the Scottish economy climbed to £392m in 2007, some £139m more than the previous year, according to a report by Strathclyde University's influential Fraser of Allander Institute.

The Scottish economic think-tank's report, which was commissioned by BAE, estimates that the contribution to Scottish gross domestic product - the main measure of the country's economic activity - created by BAE's Govan and Scotstoun operations stands at £107m.

The study also estimates that the £107m worth of GDP supports an additional £58.6m worth of output in other industries in Scotland - bringing the contribution of BAE's Clyde shipyard operations total output to £165.6m across Scotland.

The Fraser of Allander report reveals that the the total number of jobs supported by the Clyde yards to 5364.

The study estimates that the 3194 jobs provided by BAE at Govan and Scotstoun support an additional 2170 jobs in other industries in Scotland.

Broken down, that means for every 100 people employed by BAE on the Clyde, a further 68 jobs are supported in other industries in Scotland.

The Fraser of Allander report also notes that the company supports £132.2m worth of wages across Scotland.

However, concerns have recently been expressed that the jobs total at BAE may be about to tumble.

Govan MSP Nicola Sturgeon earlier this month warned that 400 jobs could be lost between Govan and Scotstoun shipyards by next spring - even if the £65m order for two giant aircraft carriers were signed immediately.

Sturgeon said she had seen BAE projections forecasting bad news for the workforce in a graph which shows the 400 jobs being lost.

In a letter to Defence Secretary Des Browne, Sturgeon previously said the figures reveal that work on the Type 45 destroyers, which have been the yards' lifeline, "will start to tail off by the end of this year and unless the yards are able to start work on new orders in the interim, workforce numbers may have to fall".

At the time, a BAE spokesman said: "We constantly review employment levels within our business and any changes to current workload assumptions would inevitably effect job levels."

Separately, Mike Turner, outgoing chief executive of BAE, is in negotiations to become chairman of Babcock International when its current chairman, Gordon Campbell, stands down next year, according to reports yesterday.

Turner, who has been on the Babcock board in the late 1990s, will initially join as a non-executive director.

Reproduced with the permission of The Herald(Glasgow) © Newsquest (Herald & Times) Ltd.

 

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