APPENDIX 16
Memorandum from the Transport and General
Workers Union concerning the future of Royal Ordnance Bishopton
(14 June 2000)
I am writing to you on behalf of the Royal Ordnance
Trade Unions of the future of Royal Ordnance Bishopton.
First, I would like to place on record our deep
appreciation of the Inquiry conducted last year by the Defence
Committee, an Inquiry conducted with the traditional thoroughness
and forensic skills that have characterised the work of the Committee.
The response to your call for a new and sensible long-term relationship
between the Ministry of Defence and BAE Systems was a positive
one, leading, as you will know, to the conclusion in December
of a partnering agreement that will without doubt, be in the best
strategic interests of Britain and our Armed Forces. We have no
doubt but that, had it not been for the excellent work of the
Defence Committee, then such progress would not have been made.
Second, however, I regret to inform you that
it remains the case that the wish of the Defence Committee that
Bishopton might be reprieved has yet to be fulfilled. The planning
assumption of the company remains that it will cease the manufacturing
of propellant at Bishopton by the end of next year. It is becoming
increasingly clear, however, that the company is facing mounting
difficulties in finding safe, secure and cost-effective alternative
sources of supply to replicate the range of propellants currently
produced at Bishopton, vital to the effectiveness of our Armed
Forces. It is for that reason, therefore, that the Royal Ordnance
Trade Unions have prepared a further Memorandum to the Defence
Committee. Please find enclosed a copy of that Memorandum.[5]
Third, you will know that assurances were given
to the Defence Committee by both the Ministry of Defence and Royal
Ordnance. Given the disturbing evidence relating to the situation
as it currently stands, we very much hope that the Committee will
call to account both the MoD and the company. We believe that
it is right that there should be Parliamentary scrutiny of whether
or not the assurances that have been given can with confidence
be met.
Finally, we stand ready to co-operate with the
Committee in whatever way you consider appropriate.
INTRODUCTION
It is now nearly 18 months since the Royal Ordnance
Trade Unions first approached the House of Commons Select Committee
on Defence, following the announcement of the proposed closure
of the Bishopton factory in Scotland, the remaining manufacturer
of propellants in the United Kingdom. The Defence Committee then
conducted an outstanding inquiry, as a consequence of which the
Ministry of Defence acted upon the unanimous recommendations of
the Select Committee, concluding in December 1999 a new and welcome
Partnering Agreement with British Aerospace, covering the Royal
Ordnance factories. The strong wish of the Defence Committee that
the Bishopton factory might be reprieved from closure has yet,
however, to be met.
The purpose of our second approach to the Defence
Committee is because subsequent developments have demonstrated
that the justification for closure is now suspect in the extreme.
Indeed, it is now clear beyond any doubt that the proposed closure
is neither in the public interest nor makes any commercial sense.
The time has come for there to be once again effective Parliamentary
scrutiny, not least because we hope that your intervention will
lead to Ministers and Managers seeing sense.
The Defence Committee will be surprised to hear
that it is still the case that suitable alternative sources of
supply, able to replicate the vital defence products manufactured
at Bishopton, have yet finally to be identified and agreed. Further,
in the process of trying to identify suitable alternative sources
of supply, the hopes that there might be cost savings have evaporated.
Indeed, it is increasingly clear that there will be significant
increases in cost associated with sourcing propellants from overseas.
And, to add insult to injury for the Bishopton workforce, taxpayers'
money will have to be spent on first the closure of Bishopton,
and then the development of alternative sources of supply in competitor
companies and countries.
Perhaps of most concern to the Defence Committee
is the fact that there are serious question marks over the safety
and stability of some of the proposed alternative propellants.
It would now appear from the initial trial quantities of propellant
procured that some of the products in question are showing classic
indications that, in service, in particular, in low temperature
conditions, they could lead to the lives of the crews of vehicles
being placed at unacceptable risk.
PROPELLANT SOURCES
Propellant natures divide into three broad categories:
— Gun Propellants—those used
in large calibre guns, that is artillery pieces and tanks.
— Rocket Propellants—those used
in missile systems and ejection seats for aircraft.
— Single Base Propellants—those
used in small arms and medium calibre ammunitions.
Royal Ordnance Bishopton is either directly
or indirectly responsible for all the natures that are presently
in service with all of the UK Armed Forces. BAE Systems has now
embarked on three different strategies for the future supply of
the various UK propellant requirements. If Bishopton closes, a
common indigenous supplier of propellants will no longer be available
to the UK Armed Forces. In discussions with the company, BAE Systems
has now confirmed that the following preferred options are the
ones which are at present being considered:
Gun Propellants
From the original "world market" options
claimed to be available, the only supplier which is actively currently
being considered is the German/Swiss Government controlled company,
Nitrochemie. The South African Government controlled company,
Sonchem remains an option but one that would only become viable
if there was no risk that potential political instability might
put at risk that option.
Rocket Propellants
Two companies are being considered as possible
suppliers for propellant for missile systems, principally for
the Sea Wolf missile. The companies in question are Celerg from
France and Bayern Chemie from Germany. No clear alternative source
of supply has been identified for the propellants used in aircraft
ejection seats and for cartridge ejector release units, which
allow the safe firing of missiles from aircraft.
Small Arms Propellants
At present, Bishopton supplies nitrocelluloses
used to manufacture the various small arms and medium calibre
ammunititions in service with the Armed Forces. The company is
now contemplating in future procuring all its small arms nitrocelluloses
from the Czech Republic.
The Committee will note from the above that
the closure of Bishopton will lead to a bewildering range of alternative
sources of supply, with in future the UK Armed Forces no longer
being confident of all its requirements being met, in particular,
at a time of crisis.
SAFETY, PERFORMANCE
AND RELIABILITY
The Defence Committee will remember that one
of the major concerns expressed by our members was the doubts
that they had from their own experience over the capacity of alternative
foreign suppliers being able to provide the natures of propellant
which are presently in service with our Armed Forces and new variations
which are in the final phases of development, all to the necessary
same standard as those manufactured at Bishopton. You will understand
the dismay being expressed, therefore, by those that we represent
over results from trials being carried out at the Royal Ordnance
Ridsdale Test Range on test quantities of propellants from the
preferred German supplier, trials that are indicating that serious
difficulties have been experienced with the safety and performance
of the alternative propellants. In service, such suspect propellants
would without doubt present an unacceptable hazard to service
personnel. We believe that such information should be made available
to both the Ordnance Board and to the Defence Committee.
SUPPLIER AVAILABILITY
AND STRATEGIC
ASSESSMENT
The suggestion was made in evidence to the Defence
Committee from both Ministers and Managers that a number, possibly
five, different suppliers had been identified, each capable of
supplying the complete range of Bishopton products The bewildering
array of alternative suppliers being canvassed is proof positive
that that is clearly not now the case. After an initial fact-finding
study, all except one have been discounted on technical grounds.
A second company is to be considered as a possible future supplier
on the grounds that, at a later date, it may be able to supply
because it might offer lower costs. The supplier in question does
not presently have any experience, however, of manufacturing the
full range of the natures of propellant currently required by
the MoD.
It has become evident that the only source of
propellant being considered as the possible sole alternative to
Bishopton is the German company, Nitrochemie. However, as outlined
above, there are significant safety and reliability concerns associated
with this source. We have to say that, as the Trade Unions always
predicted, there are no proven, competent suppliers for the full
range of Bishopton products.
COSTS
The Defence Committee will remember that BAE
Systems had wanted to retain Bishopton but had reluctantly concluded
that, on cost grounds, it could no longer keep the factory open.
The suggestion was then that closure would lead to substantial
savings, with the Ministry of Defence benefiting as a consequence.
It is now apparent that the proposed savings have evaporated.
Indeed, the prices being quoted by Nitrochemie exceed those of
Bishopton.
Turning then to the manufacture of the second
set of products currently produced at Bishopton, propellants for
rocket motors, it would appear that an increase in price of some
12.5% has been agreed between the company and the MoD to offset
the requalification costs associated with the Blackcap and Redstart
motor propellants for the Sea Wolf and Sea Skua missile systems.
We should add that, even now, no alternative propellant suppliers
for these systems have been identified although the MoD has indirectly
agreed to offset the requalification costs through the increases
in contractual costs that have been agreed.
The latest bizarre turn of events is that it
would appear that the MoD is effectively prepared to invest £7.9
million in either France or Germany to ensure that the contract
for Sea Wolf can be fulfilled. We believe that both Ministers
and Managers should be called to account for whether or not this
is in the best interests of both our Armed Forces and the tax
payer.
SUMMARY
In summary, we would make the following points:
— no competent alternative source of
supply for the full range of Bishopton products has yet been confirmed;
— the predicted cost savings arising
out of using alternative propellants have simply evaporated;
— no alternative supplier has been
identified for the propellants used in the Martin Baker ejector
aircraft seat;
— no alternative propellant has yet
been identified for use in missile ejector cartridges;
— nitrocelluloses for small arms ammunition
may now be sourced from the Czech Republic, with the requalification
costs borne by the MoD;
— no alternative supplier of rocket
propellant for the Sea Wolf missile system has been agreed. The
MoD has, nevertheless, agreed to artificial rises in missile costs
to cover propellant requalification costs;
— the MoD is preparing to invest nearly
£8 million in equipment, which already exists at Bishopton,
to ensure a single overseas source of propellant for Sea Wolf;
and
— requalification costs continue to
rise as the latest systems come into service use containing Bishopton
propellant.
This is a dangerous and costly nonsense. The
time has come for Ministers and Managers to assume a joint responsibility
for finding a sensible solution, reprieving Bishopton from closure.
Ministers have a clear obligation to defend the national interest
and not to put at risk our Armed Forces. BAE Systems Managers
now have the advantage of the Partnering Agreement. There is a
new and changed situation which demands that both Ministers and
Managers rise to the challenge of the Defence Committee, securing
the future of the remaining producer of propellant in the UK.
5 p 9. Back
| 
