Evidence submitted by Thales UK
Introduction
1. Thales is a major
international company, employing 68,000 globally in 50 countries covering
interests in defence, aerospace and security for a wide range of customers
including national governments.
2. Thales employs 9,000
across the UK. Over half of Thales'
business is in defence; in non-defence areas we are in sectors including
tele-communications and there are a number of sites in Scotland servicing these
contracts. Thales is a major supplier
to the MOD. The company is a Prime
Contractor, systems integrator, technology provider and service provider. Our current major programme involvement
includes being a member of the Alliance delivering the Royal Navy's aircraft
carriers, Prime Contractor for the Watchkeeper unmanned aerial vehicle and
consortium partner in the AirTanker air-to-air refuelling programme. Thales is also the Prime Contractor for the
Future Integrated Soldier Technology programme and has recently been selected
as the System of Systems Integrator on the Future Rapid Effects System
requirement. Thales is also supporting
urgent operational requirements for current operations.
3. In Scotland Thales is a
major player in the defence industry and operates at all levels of supply to
the MOD from its range of sites. Thales
welcomes the Committee's inquiry as an opportunity to highlight the significant
contribution defence companies in Scotland make to the supply of the UK MOD,
the benefit exports brings to the economy of Scotland and recognition of the
unique and world-class capabilities of Scotland's defence industry.
Thales in Scotland
4. Thales operates from a number of sites in
Scotland. The Optronics business in
Govan, Glasgow is our principal facility in Scotland employing 500 people across
a range of high-tech skills. This site designs and manufactures
world-leading electro-optic night vision systems and equipment for all three UK
Armed Services. The company, whose
origins date back to 1888, has a unique 90-year heritage of exclusive sole UK
supplier of Periscopes and Optronic Masts for Royal Navy's submarines. This includes periscopes for the current
Trafalgar Class, Optronic Masts for the Royal Navy's newest submarines, the
Astute Class, and Periscopes for the UK's nuclear deterrent/ballistic missile
submarines of the Vanguard Class. The
Glasgow site has also supplied most of the UK's armoured fighting vehicles such
as Challenger 2, Warrior and Scimitar vehicles with night vision equipment such
as the CH2 Sighting System and BGTI (Battle Group Thermal Imaging)
systems. These vehicles are currently
on active service providing our troops with, in many instances, life-saving
protective capabilities. The site also
manufactures reconnaissance pods, Infra-Red Search and Track for the Eurofighter
Typhoon. The site's turnover is 2006
was over £110m and is expected to grow significantly in 2007. Export markets include all the main defence
markets and accounted for 25% of sales in 2007. This is expected to more than double in the next two years. The company invested £24M to build the Govan facility
in 1990-1991 and has continually upgraded it since.
5. Thales operates as a
service provider at a number of MOD sites in Scotland including simulator and
classroom based military training services at RAF Leuchars for the Tornado F3,
at Lossiemouth for the Tornado GR4 and at Kinloss for the Nimrod MR2. Contracted under a PFI arrangement, these
services represent a 30year plus investment in providing military training
services and jobs for the MOD in Scotland by Thales.
Supply chain
6. The company's involvement
in the Scottish supply chain extends beyond its operations in Scotland with
companies from Scotland supplying Thales activities in the UK and beyond. The Glasgow facility makes extensive use of
Scottish suppliers whenever possible with a significant expenditure associated
with the company's supply chain remaining in Scotland. Thales was a founder signatory of the SC21
(21st century supply chain) initiative. In major programme bids Thales has reached out to the Scottish
supply chain through supply chain workshops to ensure maximum potential for
companies to engage in MOD programmes.
For example, the Thales supplier roadshow in Glasgow for the Watchkeeper
requirement attracted interest from 140 companies.
Contribution to the
Scottish economy
7. With currently more than
600 employees in the defence sector in Scotland, Thales has generated more than
£650m in sales between 2000 and the end of 2006. Through direct employment or through partnership supplier
arrangements with local SMEs, Thales has re-invested more than £250m of
business back into the Scottish economy during this period. Thales contribution to the Scottish economy
is projected to rise significantly, in relative terms, to more than £550m over
the next four years alone.
Employment
and skills
8. Thales UK employs 4,000
engineers and technicians, of which some 90% are qualified to degree level of
above. Some 30% of employees at the
Glasgow facility are engineers and scientists.
The Glasgow site has an active apprenticeship programme with disciplines
including electrical and mechanical engineering. Foundation core skills
training for apprentices takes place in conjunction with East Kilbride Group
Training Association. Thales engages
with schools within the Glasgow area to help fulfil its apprenticeship
requirements and extends this to include site visits and student
placements/work experience to help generate interest in engineering as a future
career. We also provide financial support to schools within the immediate area
of the site. Similarly, Scottish Universities are normally our first port of
call for high quality graduates to help satisfy our long-term engineering
requirements. We have an ongoing and developing dialogue with these
Universities to establish potential future partnerships, especially in the
areas of engineering skills for product design and development to support our
high technology business.
9. The trade union
relationships of the Glasgow facility has been the benchmark and template for
Thales UK and was the forerunner to the company's nationwide trade union
partnership agreement signed in 2002.
The company works closely with its trade unions on skills and workplace
training.
Conclusion
10. The Thales operations
in Scotland represent a key element of the global Thales capability. In turn, Thales is a significant player in
Scotland's defence industry, a major contributor to its exports base and a key
user of the Scottish supply chain. The
company is delivering significant MOD capability from Scotland and is proud of
its history of innovation in supplying the Armed Forces. It is proud of its history of investment in
its Scottish facilities and the skill and commitment of its people. We look for continued investment in the
appropriate skills that will allow the company to prosper. We would welcome the opportunity for the
Committee to visit our Govan site and, if with the RAF's agreement, one of our
training facilities at RAF bases.
John Howe CB OBE
Vice Chairman, Thales UK
January 2008
