At the start of every shift at the once world-renowned Harland & Wolff shipyard in Belfast where the Titanic was built, a horn that could be heard across the city used to ring out. It sounded again last month — this time to mark a new beginning.
Three years ago, as boss of London-based energy firm InfraStrata, John Wood bought the company out of receivership for £6 million (€6.8 million). The chief executive found eight foot-high weeds in the yard and recalls the incredulity of colleagues that Harland & Wolff, founded in 1861, could be brought back from the dead.
But Wood believes a £1.6 billion contract to build three support ships for the Royal Navy in partnership with Spain’s state-owned Navantia — whose signing was marked by the sounding of the historic horn — will breathe new life into the yard and, with it, a region that ranks as the most unproductive, and one of the most impoverished, in the UK.
“We’ve been given an opportunity here...This relationship is not just for one programme, this relationship is for the future.” Wood said from an office with a view of the huge yellow cranes, dubbed Samson and Goliath, that have dominated the Belfast skyline for half a century.
The gantries are a permanent reminder of the former standing of a yard that built more than 1,600 vessels before its demise as it lost out to cheaper rivals in the rest of Europe and Asia. It has not built a ship since 2003.
Wood is sanguine about the junior role the Aim-listed company, which ditched the InfraStrata name in 2021 and now trades as Harland & Wolff, will play alongside its larger Spanish partner in the Team Resolute consortium.
Navantia will be “supervising and holding our hand and making sure we’re doing things right”, he said. With rising construction and energy costs having the company alongside “really de-risks the programme totally for us”, he added.
The contract is a key part of what Wood called a “major transformation” of the company in December when it disappointed investors by halving its 2022 revenues target to between £65 million and £75 million, blaming supply chain constraints and inflationary pressures. He insisted Harland & Wolff was on track to meet its financial targets despite the warning.
For Ben Wallace, UK defence minister, the contract is a leg-up for a national industry that lost orders in recent decades because it failed to modernise. “It’s a bit like...Nissan and Honda coming to the UK and revolutionising British car making — we need some of that,” Wallace, the UK’s “shipbuilding tsar” said on a visit to the Belfast shipyard.
The navy contract, which Wood said would have 60 per cent UK content, is expected to lead to a fivefold expansion of its 210-strong workforce with the creation of 900 jobs.
Team Resolute will invest £77 million to upgrade Harland & Wolff’s four sites, with the majority spent on modernising the shipyard in Belfast. Since buying the Northern Ireland business in 2019, it has added two yards in Scotland and one in Devon.
Construction of the navy support vessels is due to start in 2025 with all three completed by 2032. By then, Wallace expects a major £4 billion government programme, designed to revitalise the UK shipbuilding industry and construct 150 ships in the next three decades, to bring more work to Belfast.
“You can see a future now,” said Jeff Scott, a 60-year-old welder who has just rejoined Harland & Wolff after hearing the company was hiring back experienced staff — fondly nicknamed “greybeards” — before their skills are lost forever.
Scott worked at the shipyard for 23 years but left 22 years ago. “I hope people will want to get their hands dirty again,” he said.
“From where we were, what’s important is that the company is starting to go in the right direction again,” said Robert Childs, an electrical engineer who has been at Harland & Wolff for 40 years and whose great-grandfather sailed the Titanic to Southampton to deliver it for the launch of its doomed 1912 voyage.
Critics fear Harland & Wolff will struggle to meet deadlines. “We’re not naive, there’s a process of growth to go,” acknowledged Wood. “We need to actually build the credibility of UK shipbuilding back up again.”
But Tom McCluskie, a longtime former employee, company archivist and author of The Rise and Fall of Harland and Wolff, was scathing about the Team Resolute contract.
He said the yard, which has two of the largest dry docks in Europe, would simply be assembling “kit ships...like giant Lego” from sections built in Spain. He is worried younger employees would not learn the core shipbuilding skills unless future work could be guaranteed.
Peter Renton, an analyst at London-based Cenkos, Harland & Wolff’s broker, said the contract would help position it for future opportunities, such as offshore wind projects. “I think they have the capacity to do it...it’s regenerating these shipyards and putting them in a better place.”
Despite the collapse of shipbuilding and other traditional manufacturing, Northern Ireland has attracted high tech investment and creative industries have flourished — indeed, a studio where Game of Thrones was filmed stands on the site of Harland & Wolff’s old paint hall.
But the region has the UK’s highest rate of so-called “economic inactivity”, affecting more than a quarter of the workforce, while household disposable income is by far the lowest in the UK.
Only about 11 per cent of people in Northern Ireland get further non-university qualifications or training like apprenticeships, said Anne Devlin at the Economic and Social Research Institute think-tank. “There is a significant wage premium for these qualifications in Northern Ireland. That suggests there’s a demand...that isn’t being filled,” she said.
Wood has sought to future-proof the firm by diversifying into five markets: defence; oil and gas; renewable energy; commercial ships; and cruise liners and ferries, which should ensure continuity of work and avoid the problem that has plagued the industry of having to lay off staff when a contract ends. “The reason shipyards die is...because they’re generally only in one market.” - Copyright The Financial Times Limited 2023
