Wednesday, October 12, 2016

Why Britain - and BAE Systems - Must Make A Success  Of The £41bn Successor Submarines 

Alan Tovey, The Telegraph
8 October 2016

Longer than three Olympic swimming pools, weighing in at 17,200 tonnes and menacingly quiet – the Royal Navy’s new Successor submarines will be massive.
Their job is to lurk under the ocean, providing Britain’s Trident missile nuclear deterrent, a terrible insurance policy no one wants to use but in a world growing more unstable, one that looks increasingly necessary.
The programme to build these leviathans is even larger than they are. Last week, Defence Secretary Michael Fallon was at BAE Systems’ Barrow-in-Furness shipyard in Cumbria to press the button that started the cutting of the very first steel plate for this £41bn project, which includes a £10bn contingency fund. He called it Britain’s “biggest military project since the Second World War”. 
A total of just four of submarines will be built. The first us expected to be completed in the late 2020s and going into service a few years later, beginning an expected 30-year life.
Already the project is gearing up: 2,600 people are employed on it across the UK, rising to 7,000 when it hits full swing in the 2020s. Once they are in service, the Government says maintaining and sustaining Britain’s nuclear deterrent will support 30,000 jobs.
There is no doubt that Successor is big – both in the physical size of the vessels and the financial numbers attached to them – but the impact of the programme is also being felt on a much smaller, personal scale.
Standing in the shipyard’s metal shop as Fallon's ceremonial start unfolded, BAE staff considered what it meant.
It’s emotional, it’s the start of something big that means thousands of jobs for decades. My kids could be working on this
“It’s emotional, it’s the start of something big that means thousands of jobs for decades,” said one hard hat-wearing employee who cannot be named because of the secrecy surrounding the project . “My kids could be working on this.” 
Another was less excited – even though Mr Fallon’s visit meant an hours-long break for staff as work was halted for the minister’s arrival.
“You just take it on the chin,” said the BAE veteran, who has been building subs at the site since the 1970s. “Sure, it’s an important moment but I’ve worked on so many of them over the years. I’ve stood on submarines as they’ve slid into the water.”
The importance of submarines to the history of Barrow is borne out by looking back at the 70,000-population town’s history. All but three of the Navy’s nuclear submarines have been built there and the Barrow has produced underwater vessels since the 1880s. Its geographical location as far from the threat of Luftwaffe bombers as possible during the Second World War meant it was focus of submarine construction.
Today the shipyard, including contractors, employs about 8,000 people. The bulk of them currently work on boats four and five – HMS Audacious and HMS Anson – of the seven-vessel Astute class of attack submarines. These are the “hunter-killer” vessels, the Navy’s “glamour” submarines” seeking out and destroying ships and other submarines, inserting special forces and gathering information, whereas Successor is a missile submarine, slinking along at a few knots, quietly easing away from potential confrontations and protecting its deadly payload. 
BAE is Barrow’s biggest business, dominating its economy, just as the 750ft-long, 150ft-high Devonshire Dock Hall where submarines are built dominates the skyline.
However, the workforce was once bigger. Barrow also built surface ships and until the late 1990s almost 15,000 people worked there. This figure plunged with the completion of the Vanguard nuclear submarines, which the Successors will replace.
“You should have seen the queue to get out of the gates,” said the BAE veteran, joking that it took hours to get home as the well-paid workforce plotted their way through the town’s pubs.
A break in Britain’s submarine construction before the Astute programme got into gear almost a decade ago meant the workforce dropped to less than 3,000.
This break in continuous production of such complex vessels also meant vital skills were lost, not just to the town but Britain’s industrial base.
“Australia was building submarines at the time and skilled people were choosing a life Down Under over life on the dole in Barrow,” says local MP John Woodcock, adding that the town suffered in the wake of the wind down.
That gap also brought problems for BAE Systems, which acquired the Barrow shipyard when it was created
through the 1999 merger of British Aerospace and GEC Marconi – and also the government.
A lack of continuity and loss of skills contributed to numerous problems with the Astutes, with the first to be built four years late and £2bn over budget. Troubles included problems with the nuclear reactor provided by Rolls-Royce – which has supplied the power plants for all Britain’s atomic submarines and will do so for Successor - and issues with  the quality of work and equipment overseen by BAE.
BAE and the government are determined this cannot happen again.
Mr Fallon warned that BAE would “suffer” if costs soared. But it's not only the financial costs that are too high. The Successor submarines will take over as the centrepiece of Britain’s security as their Vanguard-class predecessors retire.
“They cannot be late,” the defence secretary said. “BAE understands that… It matters for the world. With the US and France, they provide the nuclear umbrella for Nato.”
Speaking in the giant Devonshire Dock Hall, with HMS Audacious and HMS Anson behind him, Tony Johns, managing director of BAE’s submarines business, acknowledged the company had learnt an “awful lot of lessons” from the Astute submarines.
“We’ve learnt from ourselves, from others, such as the US, and from major infrastructure programmes,” said the former submariner who joined BAE after 27 years in the Navy. The fact the first steel for Successor was cut on the date first planned five years ago showed BAE “has got it right”, he added.
The Successor submarines will be built alongside the Astute class attack submarines currently under construction 
There is no gap between programmes this time. The Successor vessels will be built alongside the last of the Astutes in the shipyard.
“The concurrency has helped massively,” Mr Johns said. “The big issue of Vanguard going into Astute was we didn’t build any nuclear submarines for 10 years and we had to rebuild those skills. We’ve got people working on Successor today who a few weeks ago were on Astute. Their skills are absolutely current and that will ripple throughout the yard.”
It’s not just physical engineering lessons that have been learnt. The design of Successor is much more “mature”, meaning experience gained on the earlier programme results in fewer problems surfacing later, which are costly and complex to fix.
“Design maturity means we can look at things and say ‘that’s done, we know we won’t change’. That was a big lesson from Astute,” the BAE boss added.
Despite the pressure on the business from the Government, Mr Johns conceded that BAE has the potential to lose out if the company fails to hit cost targets and deadlines.
“There will be an impact on BAE’s reputation and it’s always possible you can lose money but this contract lasts 20 years” he said. “We’re confident that what we are producing will go up against the best in the world.”
Rear Admiral Mike Wareham, director of submarine acquisition at Defence Equipment & Support, the government body in charge of procuring military kit, is equally positive. “We’ve learnt from the Americans, who build a lot more submarines than we do,” he says, adding that Britain has applied US best practice where appropriate and modified the rest.
“We don’t have a great recent history of building these large scale projects but have a much better understanding of exactly what is involved now,” he said. “It’s going to cost £31bn and we hope we don’t have to use the contingency, but this is a project that we have to do right.”
BAE is the prime contractor on the project, but Rolls-Royce is also taking a major role. Perhaps surprisingly, given that it is best known for its jet engines, the PWR3 reactor Rolls is creating for Successor is the second largest of all the company’s current projects. At the moment 600 of the 3,000 staff in Rolls’s nuclear business are working on it, a number only set to grow.
Rolls will provide a “cradle to the grave” service for the nuclear reactors, which is expected to be worth billions to the company across the Successor submarines’ 30-year lifetimes.
Joining Rolls will be upwards of 350 contractors, with the project spending between £8bn and £9bn in the supply chain, with 85pc of the work going to UK companies, according to BAE.
Stuart Klosinski, project manager of Furness’s development forum, puts a much higher figure on the value of the work to the region. His organisation reckons nearer to 1,000 businesses will benefit across the UK.
“To give you some idea of the impact of Successor between now and 2050, the programme will generate 10pc of the gross added value of the whole of the Northern Powerhouse,” he said. “That’s a huge amount, about £4.2bn in Barrow alone.”
Submarine construction dominates Barrow's economy - as well as the town's skyline  
Local MP Mr Woodcock agrees government is taking a more long-time view on the impact of Successor than with previous programmes.
“Successor not going ahead would have meant the implosion of Barrow,” he says. “But they are already talking about what comes next to maintain those skills.”
Currently called Maritime Underwater Future Capability - MUFC for short, much to the dismay of Barrow FC supporters - this could involve the submarines with the capability of operating unmanned underwater vehicles.
Much was made of the fact the steel Mr Fallon cut last week for Successor’s hulls was supplied by French business Industeel. Both the defence secretary and BAE were keen to play down the fact, pointing out that this represented less than 0.5pc of the project’s value.
Britain’s steel industry may be in crisis, they said, but the work was contracted before this was apparent and, in any the event, both said no UK companies had the ability to supply the specification they needed.
Local MP John Woodcock has been resolute in his support for the Successor programme 
Mr Woodcock takes a more rounded view. “As I understand it, 40pc of the steel has yet to be contracted so there’s plenty of opportunities for British companies,” the MP
said. “The debate over where the steel came from just clouds the issue.
“We can’t forget that with Successor we are retaining an ability to make a highly advanced, highly classified part of Britain’s defence in this country. It’s so secret that most of it can only be be built by British nationals. It’s something to be proud of.”  
People on Barrow’s streets certainly have a sense of pride about the start of Successor.  
“It’s a big boost, there’s more people coming into our town and it’s a help for all the business” said Jace Healey, 22, who works in the Furness Railway pub.
His thoughts were echoed by Paula Harris, 31. “It means a lot to the town,” she said. “We’re proud to know it’s happening here, there’s pride in Barrow building Britain’s submarines.”
The mum to three-year old Jake was unsure what it would mean in the long-term for her son, though.
“Jake knows what the submarines are, we’ve been on them on open days and seen them in the dock,” she said.
Only time will tell if the prosperity Successor is bringing to the town will continue long into Jake’s future.

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