Ship repair company A&P Falmouth has started a 30-day consultation with staff and unions about a proposed restructure which could result in the loss of up to 78 positions at the yard.
A&P managing director Peter Child said the repair cycle of the yard’s Ministry of Defence (MoD) contracts combined with a depressed commercial shipping market and continued delays to the dredging of Falmouth Harbour to allow access by bigger vessels meant a temporary reduction in workforce was unavoidable.
Child said MoD work accounted for over 50% of the yard’s business but having recently completed a multi-million pound refit of Royal Fleet Auxiliary Argus which had employed 200 staff for six months, the next major refit was not scheduled until April 2015. The sale of RFA Largs Bay to Australia in 2011 also means there are only four ships in a five year cycle.
A&P had hoped to win a major contract to refit ocean survey vessel HMS Scott for September this year, but it was awarded to Babcock despite a very competitive bid.
Child said the commercial shipping market was still in deep recession. And A&P’s ability to access one of the few growth markets, namely repairs of bigger ships berthed alongside rather than in dry dock, was severely hampered by the lack of significant progress on the Falmouth Harbour dredging project, which meant the yard has had to turn work away.
He said: “MOD work is over 50% of our business and although we have a MOD contract for the long term maintenance of RFA ships until 2018, the repair cycle means we are facing a big gap before the next refit, and the commercial market is still hand-to-mouth.
“We have been doing everything in our power to bridge that gap and we put in a very competitive bid for HMS Scott, so were disappointed not to win it.
“But what is more frustrating is the continued delay to the Falmouth Harbour dredging project. Ships are getting larger and larger which is creating a growing market for alongside repairs that do not require dry docking. We are ideally placed to do that work except for the fact that we can’t get the ships in because we need a deeper channel. Only last week a large LNG vessel in the bay that required major repair work had to be turned away because she was too deep for Falmouth.”
He added: “It’s never an easy decision to reduce our workforce and we will work with our staff to provide what support we can to those affected. We also see this as a temporary situation because we have two major RFA refits scheduled for 2015 and that will mean having to take more people on when those contracts start. We are also committed to investing in our future needs and still intend to take on five new apprentices this year.”
A&P Falmouth employs a workforce of 305 plus around 80 casual staff.