Scotland's £2,783-a-day ferry fiasco 'fixer' got job after single phone interview

He was brought in after the last civilian Clyde shipyard under tyoon Jim McColl went into administration following a dispute with Caledonian Maritime Assets Ltd - the taxpayer-funded company which buys and leases publicly owned CalMac's ships on behalf of the Scottish government - and as the price of the construction of two lifeline ferries under a £97m fixed price contract more than doubled.

Ferguson Marine's financial collapse in August, 2019 led to a state takeover, while the delivery of two lifeline island ferries MV Glen Sannox and Hull 802 which were due online in the first half of 2018 will be over four years late.

Mr McColl went on to blame repeated design changes by CMAL for the issues in building the vessels for operator CalMac, which is also publicly-owned.

Earlier this year it emerged that Ferguson Marine had racked up £100m of losses in just four months of nationalisation.

And last month there was a warning the ferries could be further delayed as Mr Hair flagged up concerns over data systems used to run the nationalised business.

He also highlighted a potential vulnerability regarding running gear installed on Glen Sannox, which has been sitting idle in the water at the Port Glasgow shipyard for years.

Details of Mr Hair's invoiced fees, including expenses, show that in the nearly two years between August, 2019 and July, 2021 he earned £1,263,564.  It was revealed he receives costs for living in Scotland.

His over £600,000-a-year payments towers over the £160,000-a-year salary of the First Minister.

Just six had been approached for the job, after global consultant group Price Waterhouse Cooper (PwC) advised ministers of suitable people with experience of turnaround in comparable industries.

The Scottish Government in explaining the recruitment process has admitted that after consideration of CVs, senior officials eventually interviewed three people "by phone" and consequently concluded that Tim Hair had the "requisite skills and experience to perform the role".

It has been confirmed that availability of candidates was "important" as some were in existing roles and would not be able to start promptly.

But Highlands and Islands MSP Edward Mountain, the former convenor of the rural economy and connectivity committee which branded the ferry management process a "catastrophic failure" after an inquiry has strongly criticised the recruitment process.

He said: “I find it absolutely bizarre, considering the importance of this job, that the interviews for the shortlisted candidates were not undertaken on a face-to-face basis.

"And it appears that the Scottish Government appointed who was available at the time. Most of the time though, the best turnaround directors are already fully employed.

“I am not convinced that the Scottish Government carried out an adequate interview process or obtained sufficient references in their search for a turnaround director."

The deal to bring in Mr Hair, the former chief of engineering firm Chamberlain, was overseen by a two-man panel - acting director of for economic development Richard Rollison and Transport Scotland chief executive Roy Brannen.

Both had been briefed by independent specialist advisers PwC which had also advised the Scottish Government over options for action over the perilous state of shipbuilders Ferguson Marine before it fell into administration in August, 2019 and was subject of a state takeover.

The appointment was signed off by then finance secretary Derek Mackay.

But ministers have said they were unable to list his previous appointments and his accomplishments since 1995 as the exact details were covered by non-disclosure agreements. They will only say that he "led multiple turnarounds in several industrial sectors".

According to Mr Hair's CV he was interim chief executive of polymer products manufacturers Applied Composites Group for 11 months between October 2017 and August 2018 It went bust ten months later owing £27.4m after he left. Liquidators said there had been no claims made from secured creditors.

In its final set of financial accounts for the year to September, 2017, prepared in June 2018, auditors KPMG raised concerns about the business continuing as a going concern saying "there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least 12 months". It had suffered a £330,000 loss after tax.

During that time, in June, he oversaw a subsidiary Icon Aerospace that manufactures rubber products for the aerospace, defence and industrial sectors and counts the likes of Airbus, Boeing and Rolls-Royce among its clients, to move into a new research and development base in Nottinghamshire. It was expected to secure 300 jobs and create a further 100.

He said at the time: "Icon Aerospace Technology supplies critical parts to the aerospace and defence industry and we look forward to continued growth."

A year later, Applied Composites Group appointed a voluntary liquidator. Mr Hair's company Melville Management Limited was one of those which was owed money to the tune of £80,214.13.

Unsecured creditor claims totalled £374,088 - but all failed to receive any reimbursement, according to liquidators EY, as "no funds have been realised".

In January, 2020, Icon, which featured on Michael Portillo's Great British Railway Journeys, was bought by Integrated Polymer Solutions (IPS), a business based in Long Island, California and is still operating.

Mr Mountain, a Scottish Conservative MSP, businessman and former soldier added: “I also question whether the Scottish Government prioritised shipbuilding expertise as part of the role. Tim Hair’s professional experience working as a marine engineer on a cruise ship some thirty years ago is significantly different from constructing modern passenger ferries. “It is also clear that the financial package offered to Tim Hair by the Scottish Government saw him receive significantly more than if he had been appointed by a recruitment firm, who would have carried out more due diligence.

“Having been in business for forty years, I know that in the first six months of a turnaround director’s appointment they are tackling the problem. After that period, they can become part of that problem.

“Overall, I have little confidence that these ferries will be delivered on time and within the latest cost estimates.”

Ministers have said: "Tim has significant experience in the engineering and automotive sectors, has led a number of business turnarounds and transformations and is a member of the Institute of Marine Engineering Science & Technology and the Institute of Turnaround.

"The primary requirement when recruiting the Turnaround Director was experience of turning around engineering businesses with an emphasis on a collaborative approach to re-set the relationship with customers and Tim Hair was selected on this basis. Additionally, Tim Hair had shipping experience in his early career.

Agreement was reached to pay Mr Hair, who began work on August 14, 2019, £2850 a day plus "reasonable expenses" and the costs of living in Scotland from Monday to Friday contracted to be available for at least 4 days each week and to work a minimum of eight hours per day.

His contract was for an initial period of two to three months with an option to roll forward on a monthly basis but with a four week notice period.

His pay rate was cut by 10% in February 2020 and is now as £2565.

In a question-and-answer briefing for Mr Mountain, ministers were asked what Mr Hair's marine engineering experience was and why it was specifically relevant to shipbuilding and Ferguson Marine.

The Scottish Government stated that he had been a marine engineer between 1978 and 1988 for P&O Princess Cruises and that he was a member of the Institute of Marine Engineering Science & Technology.

"Tim has significant experience in the engineering and automotive sectors, has led a number of business turnarounds and transformations and is a member of the Institute of Turnaround. The primary requirement when recruiting the Turnaround Director was experience of turning around engineering businesses with an emphasis on a collaborative approach to re-set the relationship with customers and Tim Hair was selected on this basis," it said.

Ministers were also asked in endorsing Mr Hair's appointment, whether PwC confirmed they had direct experience of working with Mr Hair. The Scottish Government responded: "PwC completed a background check on Tim Hair which raised no concerns and he has been known to PwC Partners in England for over 10 years." PwC were not approached for a reference. Instead references were obtained from non-executive directors covering Mr Hair's career since 2007.

A Ferguson Marine spokesman said: "The recruitment was a Scottish Government exercise and the shipyard can’t comment."

A Scottish Government spokesman said: “The Scottish Government appointed the Turnaround Director in August 2019 following a competitive and robust recruitment exercise as part of the process to take the Ferguson Marine shipyard into public control.

“Tim Hair has a track record of stabilising companies in difficult situations. He has a wealth of experience across a range of sectors including oil and gas, manufacturing, aerospace and the automotive sector.

“A benchmarking exercise was conducted as part of the recruitment process to identify market rates. The Turnaround Director’s agreed fee was well within the benchmark and consistent with market rates which reflect the highly specialised nature of a role that requires senior level experience and solid track record of transforming struggling businesses.

“Since Mr Hair’s appointment clear business improvements have been made at the yard, despite the pandemic, and more than 100 jobs have been created since February 2020. The Scottish Government stands firm on its commitment to the ferries, the workforce and the yard.”