Ferguson Marine will modernise its processes as part of a fresh bid to secure work that will guarantee its long term future, its chief executive said today.
Graeme Thomson told a committee of MPs in the House of Commons that the yard would struggle to win new contracts on price alone, but would focus on proving its capability for delivering quality vessels on time.
He said the state-owned company will be bidding to replace the ageing MV Lord of the Isles ferry which serves the Western Isles.
Douglas McAllister, a member of the Scottish Affairs Committee, asked: “If you do not get the Lord of the Isles work what are the implications for the future of the yard?”
Mr Thomson, who in March was appointed the yard’s CEO, replied: “It would be very difficult for us. It would be very challenging.”
He said his focus was to look at a broader spectrum of potential vessels, including tugs and harbour boats as well as defence-related work, such as the recently-awarded BAE systems contract to work on the Type 26 Frigates. He said there was a pipeline of 150 non-naval vessels over 30 years.
“We cannot be narrowly focused as that would curtail what we can do,” he told the committee. “We want to be able to demonstrate that we can deliver on time and quality. Going forward we need to establish a portfolio of work – small and large vessels and a balanced workload.”
On bidding for contracts and turning around the yard’s fortunes, he added: “I feel confident. The market is out there.
“There are opportunities, with the caveat that we pitch on a level playing field.”
He said modernising to improve productivity was a key part of the strategy. “We have not been sufficiently invested in technology, I would perceive, for about 20 years,” he said.
Investment “would help demonstrate we have a modern yard and gives confidence that we are performing at the standard customers expect.
“If it is solely cost competitive we will struggle. We will not do a race to the bottom to get work that we cannot achieve.”
He told the committee that the yard has 290 core staff and 67 agency and contract workers. There was no “skills gap”, but some agency workers had left and retaining skills depended on picking up new orders.
He confirmed his promise in May that the overdue and over-budget Glen Rosa would be completed in the second quarter (April-June) of next year. He expects to refine the delivery date later this year.
He also confirmed that the vessel will cost £172.5 million and its sister ferry the Glen Sannox £152m, a total of £324.5m, against an original budget of £97m.
He said the delays were partly a result of the ferries being prototype dual-fuel vessels which had presented a number of challenges.
Asked by Lillian Jones if the problems over the ferries had impacted on the yard’s ability to secure new work, he said it was seen as a “bespoke set of circumstances”.
He added: “The capability of the workforce is great. The skills are still there and potential customers see that.”
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