Ferguson Marine: Union calls for halt to denationalisation

In a letter to the minister, the union said Ferguson's could be the "jewel in the crown of Scottish shipbuilding" given the chance but under public ownership.

Mr Gray confirmed to MSPs that there is an intention for taxpayer-supported Ferguson Marine to be placed back into private ownership.

Ferguson Marine was taken over by the Scottish Government four years ago after its financial collapse under the control of tycoon businessman Jim McColl as a row erupted over long delays and mounting costs over the delivery of two lifeline ferries.

Glen Sannox and Hull 802 were due online in the first half of 2018 when Ferguson Marine was under the control of Mr McColl, with one initially to serve Arran and the other to serve the Skye triangle routes to North Uist and Harris, but they are at least five years late. The last estimates suggested the costs of delivery could more than quadrupled from the original £97m cost.

But GMB Scotland senior organiser Gary Cook has written to the Mr Gray saying the skilled and committed workforce at Ferguson's shared the determination to complete the ferries as quickly as possible after previous management failures delayed the work.

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He said ministers should learn from past mistakes, referencing the renewables manufacturing yard in Methil – formerly owned by Burntisland Fabrication (BiFab) and now Harland and Wolff – where the government intervened to prevent the closure but ended up being kept in private hands.

What was seen as a key part of the future of Scotland’s wind farm revolution fell into administration in December, 2020.

It meant that ministers stood to lose the vast majority of the £52.4m it pumped into the part state-owned BiFab as its take became worthless in an insolvency.

BiFab's insolvency came after ministers signed off on what was a secret £30m guarantee to support Bifab in 2019 before doing a U-turn after the failure of an important contract.

GMB Scotland's senior organiser has written to Mr Gray saying that denationalising the yard now would only be a "distraction and lead to a period of instability and uncertainty". Mr Cook pointed to recent work won by the yard and said, with ministers’ support, it could have a bright future after being saved by the Scottish Government.

“Allowing it to return to private hands now would mean the Scottish Government rightly intervened when the yard was at its lowest only for it now to pass on a profitable yard to the private sector.”

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He added: “What Methil symbolises is a dearth of political leadership and a lack of industrial strategy for an industry in which Scotland should thrive: renewables.

“As an island nation, Scotland can and must thrive in shipbuilding. That requires the political leadership to chart a future for Ferguson’s, our members and the wider community."

Mr Gray confirmed the Scottish Government's intentions when asked what he thought the future holds for the yard.

When asked by shadow transport minister Graham Simpson at the Scottish Parliament's economy and fair work committee, if it was the intention to return Ferguson Marine to the private sector.

Mr Gray responded: "Yes."

"Obviously, the better Ferguson's is performing, the more likely it is that it's going to return to private ownership.

"If there are interested parties who come forward [who will] talk to government or our agencies, then clearly we will take that interest seriously and do what we can to ensure that the yard is returned as a commercial going concern into private ownership as quickly as possible."

It comes after Scotland's public spending auditors have said there remains doubts over the long-term future of the shipyard firm because of a lack of a business plan.

Audit Scotland has said questions remain despite attempts by new management to map out a long-term future, beyond the delivery of the two ferries.

Nationalised Ferguson Marine has previously responded to concerns over its status as a going concern by insisting there is a strong future for the business, despite its last annual financial review for 2021/22 admitting there was "significant doubt" over its ability to continue as a going concern over questions over future funding.

The board of directors went on to say that they are working with the Scottish Government to "continue to develop our strategy and processes to deliver a sustainable business model which will secure the long-term position of the company".

The Scottish Government in response to concerns said its priorities were to complete the ferries and secure the yard's future, while the deputy first minister said that ministers remained "committed to do all that we can" to help achieve a prosperous future for the yard.

But Auditor General Stephen Boyle has said it is premature to say that the beleaguered shipyard has a future and is safe.

Mr Cook told Mr Gray: "Ferguson’s can be the jewel in the crown of Scottish shipbuilding if given the chance. There is no greater testament to the ability of the workforce than the recent award of a BAE Systems contract.

“This is work that must be carried out to a high standard with experienced hands. If BAE has confidence in the workforce, then so too should the Scottish Government.

“Our members have had their reputations dragged through the mud in recent years as politicians used them as a political football.

“Rather than undermine our members’ work and skills, we have challenged all parties to outline a future for the yard.

“Any plan must include a direct award for the small ferry replacement programme and commit to ensuring the continued public ownership of the yard.”