Examination of Witnesses (Questions 380-399)
MR VIC EMERY AND MR IAN MCMAHON
1 APRIL 2008
Q380 Mr Davidson: If it has been discussed over many years, people we spoke to are clearly under a misapprehension then.
Mr McMahon: I think so.
Q381 Mr Davidson: It always makes me a bit anxious when people like yourself tell me this is the position but other people out there do not seem to have grasped that. There is obviously a problem with communication. Either you are not explaining it properly or they are not hearing it properly because that was the view they expressed to us, which is why we are picking it up with yourselves.
Mr Emery: I think you asked that question of my training manager yesterday, a guy called Jim McHarg and I think he gave you the answer that the way in which the funding is done is different but it is about averaging the same in England and Scotland.
Q382 Mr Davidson: We got a different response from somebody else.
Mr Emery: I am commenting on the comment you got from my guy when I was in the room.
Mr McMahon: I think you are probably getting the view that Vic's staff are fairly switched on to this because they operate in both areas.
Q383 Chairman: Everybody we spoke to, and particularly the representatives from the trade unions, wants more resources, more money for training, for skills and apprenticeships and they told us they are going to lobby the First Minister for more money. Do you agree with the concerns that the Scottish Executive should make more money available for the apprenticeships, for training and so on?
Mr McMahon: On the basis of yesterday's announcement, I think there is more money being made available for apprenticeships but, of course, it is up to companies if they want to lobby for even more. We are straying into the area now which will be the responsibility of Skills Development Scotland, so I am reluctant to comment on their future policies.
Q384 Mr Devine: If we had spoken to you yesterday what would you have said?
Mr McMahon: I would have said it would be a matter for the future Skills Development Scotland!
Q385 Chairman: Everybody is becoming more like politicians than the politicians themselves!
Mr McMahon: You are always going to find a situation where companies would like more training support and I think what you are always trying to do, and you are aware of this as well as I am, is balance the use of the public purse effectively.
Q386 Chairman: Is there a shortage of skilled workers for the naval and defence electronic industries?
Mr McMahon: I think so, yes, and that is why we are going out to try and find recruits for that industry to make sure it is advertised as a job opportunity for the future.
Q387 Mr Devine: Are these people there?
Mr McMahon: I think so, yes, and basically what we have got to do is raise the attractiveness of the engineering sector as a job choice against other sectors. I admit freely we will be competing with other sectors but in terms of the value-added we can bring to the economy, I sincerely believe we can do substantially more by getting people into the engineering industry.
Q388 Chairman: When we were discussing the issue of apprenticeships with Thales yesterday they told us they had only three apprenticeships because the company is very busy and they do not have the necessary time it takes to train these apprenticeships. Obviously if this is a problem, how can we address this problem when, in my view, if the company has more employees, if they are busier, there are more jobs and they are under an obligation to have more apprenticeships?
Mr McMahon: I am going purely on the basis of discussions I have had with some of the big players, the Tier 1 suppliers like BAE Systems Surface Fleet Solutions and Babcock Marine. It has been identified that you reach a point where there is saturation in your workforce for training additional people because you are trying to work on live ships. Some of the things we have talked about are putting in training facilities, training rigs where people will be taught to train without doing it live on a Type 45. I know some of the colleges have been investing in this type of stuff. You do the pipework installation in the college rather than live on a ship. There is an issue around assessors where we have got to find adequate support for the assessors who are coming in and that is something which needs to be looked at as well. That is a discussion we have been having within the marine technology training group. It is not limited to the Tier 1 suppliers, we have also recognised that not all of the jobs are in two companies, the jobs go out into the wider supply chain. We have got to find a way of supporting the companies, in fact at their insistence that we get into their supply chain to figure out what their skills and training needs are, to find further training places but also to create additional apprentices for the industry.
Q389 Chairman: Vic, I want to ask you this question. I am trying to keep politics away from this and I always try my best as the Chair to do that. One thing I think we and the people in Scotland are entitled to know, and that is what I was told in 1999 by BAE Systems and by the shop stewards in Govan and Scotstoun shipyards, that if they did not get the order for roll-on, roll-off ferries the yard would be shut and then we were told that if the Type 45 destroyer order is not there the yard will be shut, do you see it differently?
Mr Emery: No, I think that is absolutely correct. The time you are talking about in 1999 or soon after, the Govan shipyard particularly was running out of work and it was not in BAE Systems' ownership at the time. I think they did lose the competition for the ro-ro ships and they were facing the imminent demise of the company. What the MoD did was to order two additional LSD (A) ships because in the original requirement there were only two ships required by the MoD and they were, again, in competition won by Swan Hunter down in Newcastle upon Tyne. In order to keep the Govan shipyard going, the Government ordered two additional LSD (A)s. Although I am not party to the exact commercial arrangements or the political arrangements, that then triggered a change in ownership of the Govan shipyard and it became part of BAE Systems. That equally is true of the Type 45 contract for BAE Systems here on the Clyde. Until I came here, before I took over my present role, all of the Type 45 destroyers were to be built in Barrow-in-Furness.
Q390 Chairman: I am well aware that first there were two roll-on, roll-off ferries which you lost in competition and the Government made available the finances for two additional. This was because of the commitment by the British Government that the Govan shipyard is still there.
Mr Emery: Absolutely.
Q391 Chairman: If you do not get the orders for aircraft carriers, what is the future of Govan shipyard?
Mr Emery: Every company can only survive if the marketplace is buoyant enough to allow them to sell their capabilities into the marketplace. If the aircraft carrier does not come along, that will leave a large void in our workload, which will need to be addressed in some way or other or we will need to contract the workforce in order to maintain the business that we do have.
Q392 Chairman: How many employees do you have in Scotstoun and Govan?
Mr Emery: We do not count them yard by yard but overall we have about 4,000 people we employ and we have about 1,000 sub-contractors, so the number of bodies who rely on us at the moment is about 5,000 people.
Q393 Chairman: That would go down the supply chain and sub-contractors also.
Mr Emery: Then there is the supply chain on top of it that rely on it as well.
Q394 Chairman: The future of the shipbuilding industry on the Clyde in dependent on MoD orders?
Mr Emery: Yes, it is.
Q395 Mr Davidson: I think it is very helpful that you just reminded us that originally the plan had been for the Type 45s to be built in Barrow and it was then a Government decision to move part of the Type 45 work up to the Clyde which then kept the Clyde yards open.
Mr Emery: Can I correct that, it was not a Government decision. The company decided to do that and we had to seek permission from the Government to allow that to happen, but we said that should happen.
Q396 Mr Davidson: Because otherwise the yards here would have gone and you would not have been able to bid for the future work of the carrier. Can I come to the question of the defence industrial strategy and the question of the Scottish yards. As I understand it, the yards which are available in England would be capable, after carrier, of doing all or most of the building which is necessary under the 5000 tonne ship every year, is that correct?
Mr Emery: In one form or another, that is correct.
Q397 Mr Davidson: It would be possible for the Ministry of Defence and the Royal Navy to get all of their ships in the foreseeable future after carrier from English yards if that was the home market and Scotland was a foreign country?
Mr Emery: It is certainly the case that the future workload provided by the MoD to the industry at large will be much smaller than it currently is and, therefore, across the United Kingdom there is an over capacity of shipbuilding capability, therefore some rationalisation will need to be taking place.
Q398 Mr Davidson: One of the things which pleasantly surprised us yesterday was the enthusiasm of the unions for the trade union learning system. Has that involvement of the unions been able to make training more accessible and popular amongst the workforce than the standard fair? That was the impression we got yesterday. Will you confirm that because it may be that we will want to say something about that?
Mr Emery: Since we have been running the company, the team we have brought in, we have tried to change the culture of the company. People used to come to work and just do what they had to do and then go home again and we wanted a sense of belonging, I think the modern word is empowerment, we wanted to empower people to want to work with us. We committed to give them retraining and provide them with a better skill set. We currently spend between £4.5 and £5 million a year on training, retraining, adult training, supervisory training, as well as apprenticeship training. The unions have bought into that and like that concept. One of the previous complaints against management was that we were not doing enough to train the people. Now, I would not say the unions are content because they would always want more, as we would, but they are much happier than they used to be with the training facilities we provide to them.
Q399 Mr Davidson: Ian, what is your view on the trade union learning structure?
Mr McMahon: Excellent. As I mentioned earlier, I sit on the sector skills group for SEMTA, the sector skills council that looks after this sector, and the unions are actively involved in that. I have heard in open meetings, in fact it has been minuted, that the unions are prepared to consider multi-skilling and they are prepared to consider a new way of working, recognising fully that they can contribute to the long-term sustainability of the industry. They recognise outdated work practices and industrial action is not the way of the future but adaptability is. Clearly the unions are also looking for a fair salary as a result of that and that is the ground on which the companies of the unions now operate. Through the trade working groups which exist—and I know this because of the work we are doing on the HNC in shipbuilding and there is a similar group at Babcock- the unions work directly with the colleges to help improve the training. They are working directly with the college lecturers to point out how training could be improved and that has been a valuable asset to the colleges. A lot of lecturers are not trained in modern techniques like sub arc welding and they do not have the equipment to access it which the yards do. Therefore, getting access to the workers who use it on a day in, day out basis to improve their skills helps them train the apprentices of the future. It is a very good working relationship.
| 
