Harland & Wolff, the historic Belfast shipyard best known for building the Titanic, is on the verge of bankruptcy, putting a £1.6bn contract to build three Royal Navy warships at risk.
The troubled shipbuilder, which is expected to file for administration as early as Monday, faces a cash shortfall by the end of this month, raising concerns that the fleet solid support ships (FSS) could end up being built overseas – the first time warships have been built for the Royal Navy.
A management crisis threatens to jeopardise Harland & Wolff’s shipbuilding contract, which is crucial to supporting Britain’s aircraft carriers on global deployments. Although company bosses claim that putting Harland & Wolff Holdings into administration will not affect the operation of its yards, there are concerns that the contract could have to be put out to tender again.
Industry experts warn that this could force the MoD to rely on Navantia, the Madrid-based prime contractor that has partnered with Harland & Wolff, to complete the work in Spain. This would represent a major departure from the UK’s tradition of building its warships domestically.
Harland & Wolff had planned to share hull manufacturing with Navantia, with final assembly in Belfast. However, insiders say the administration could see Navantia take over Harland & Wolff’s Belfast shipyard, potentially cutting its other sites at Appledore in Devon and Arnish and Methyl in Scotland – a move that unions fear could lead to significant job losses.
The GMB union has urged the government not to allow potential buyers to pick up the Harland & Wolff assets, arguing that the four sites play vital roles in the UK’s defence and renewable energy sectors. Matt Roberts, GMB national officer, warned that losing the contract would represent “one of the greatest betrayals in the history of Northern Ireland’s industry”.
Russell Downes, a restructuring expert who was recently appointed chief executive of Harland & Wolff, insists the four sites are still viable and the company can still meet its share of the naval contract. However, the uncertainty has prompted calls for alternative arrangements, such as a deal involving UK shipyard operators such as BAE Systems and Babcock, who were previously in the running for the contract.
Francis Tusa, an independent defence consultant, criticised the MoD’s decision to award the contract to Harland & Wolff and Navantia in 2022, noting that Harland & Wolff had not built a full-size ship in nearly 20 years. He expressed doubts about the shipyard’s ability to handle such a significant project, describing the decision as overly optimistic.
Labour’s Lord Beamish has urged ministers to put in place a rescue plan for the Naval Support Ship programme, stressing the importance of sticking to the National Shipbuilding Strategy and ensuring UK-based shipbuilding is built to support the regeneration of domestic shipbuilding. He highlighted the crucial role that support ships play for the Royal Navy, describing them as “vital”.
Harland & Wolff’s financial problems have been exacerbated after Business Secretary Jonathan Reynolds refused to back a £200m refinancing request in July, citing the high risk of losing taxpayers’ money. Compounding the problem, the company recently revealed it was investigating the possible “misuse” of £25m of company funds under previous management. Former chief executive John Wood, who was ousted in July, has dismissed the allegation as “absurd”.
The government said it was working closely with all parties to find a solution that would preserve the UK shipbuilding industry and protect jobs. However, it stressed that the market was best placed to resolve the crisis and that public funding would pose a significant risk of financial loss. A government spokesman encouraged all parties to engage with trade unions before making further decisions, acknowledging workers’ concerns amid the ongoing uncertainty.
With the future of Harland & Wolff at stake, the potential consequences extend beyond job losses, with significant implications for the UK’s defence capabilities and industrial strategy. The crisis underscores the challenges of sustaining domestic shipbuilding in a competitive global market, and the need for a coordinated response to protect the industry’s legacy and future.
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