Thursday, 13 July 2017

Steely Stuff - the saga of Type 26 production

There has been coverage in the last few days of the UK governments confirmation that only 35% of the new Type 26 frigates steel would be sourced from UK suppliers, with the remainder coming from overseas. Is this necessarily a bad thing?

The problem with the modern defence industry these days is twofold -firstly it is hard to keep everything required for a ship or kit ‘in country’ and that you have to go overseas for parts of the supply chain. Secondly, its hard for any government to keep giving out orders that continue to sustain a credible industry without either very heavy subsidies, or making the ship far more expensive.

In the case of the Type 26, the clear problem was that despite MOD aggressively trying to persuade industry to bid and provide UK solutions, no UK steel manufacturer was able to meet the specifications and provide all the steel. Its hard for Government to support industry when industry itself is unable to meet the needs of the requirement.

Much like the RFA Tide class tankers had to be built overseas because no UK shipbuilder proposed an in country build (primarily due to capacity issues), the reality is that the requirement for certain types of steel is quite limited now. Industry has to make a strategic decision based on whether it is worth retaining a capability to make this type of specific steel or not, and balance up the costs and benefits of doing so. Clearly UK industry has chosen not to keep up the investment required and as such was unable to bid.

From a Government perspective, its difficult to see what could have been done differently. The requirement for high end specific steel was always going to be limited after the Type 45 finished construction. At best a small number of ships over a roughly 20 year period would need them (even on the original 13 hull Type 26 plan, it still only envisaged one ship every 18 months - two years). 

The numbers are small, and the need for extra steel limited. So we find ourselves in a position where parts of the hull are being outsourced and built overseas – because there is no industrial capacity to do so here, nor was there likely to have been. Does this really matter?

Humphrey would argue that no, it does not really matter except to political mischief makers. The harsh reality is that every Western military (and frankly most other countries too) rely on foreign components in their warships and other vessels. Some nations may have ships built from locally produced steel – but those same ships may have a combat system from one nation, a SAM from another and a gun from a third party country. In other words it’s a fusion of kit from across the globe coming together in one platform.

If you’re going to rely on foreign derived kit in your ships, then the sensible thing to do is work out what really really matters to your operational effectiveness and sovereignty. Arguably this will be the command and control systems, communications, the crypto and all the other complex electronic bits. Then it’s the weapon systems, aviation assets and other parts that help the ship ‘fight’.  It doesn’t really matter where the steel comes from – in many ways this is the least relevant bit when it comes to national sovereignty.

What matters is that in a crisis, your ability to design, build operate, support, repair and use the ships systems as intended is what counts, not where some of the steel in the hull comes from. All navies face a similar challenge – what matters is determining the level of sovereignty that you are willing to trade off for capability. If you really want a home derived warship, then you’ll end up with something out of the North Korean navy – which will be simple, unsophisticated and unable to do much except look good in photoshopped pictures.

We live in an interconnected world with complex supply chains that stretch a long way. If we were to do an analysis on the many parts of any ship, we’d find it derived from across the globe. We have to accept that the days of a nation building purely ‘in house’ are gone forever. This means every nation has to decide where the balance of investment lies, does it subsidise, or does it outsource as required to get the result when it needs to?

This argument feels more about bolstering opposition MPs who represent steelmaking constituencies than it does about actual effectiveness. In truth many of those MPs condemning the Government today, were themselves in Government when decisions were taken many years ago to slip, delay and defer or cancel Type 45 hulls 7&8 and further delay the ordering of Type 26. What we are seeing now is chickens coming home to roost from many years ago, which in turn forced industry to choose where to invest.

Sadly, its likely that no matter how this ends, much as HMS QUEEN ELIZABETH is constantly being mocked as a carrier with no planes, the Type 26 will continue to be mocked as a Swedish steel ship, allowing the Twitterati to continue to feel bad about themselves and indulge in their favourite habit of running down the RN, not focusing on the fact that every navy faces similar choices and would doubtless make the same decision if needed.

1 comment:

  1. Indeed. Mischief-making in the extreme. Aside from the minor fact that the total steel content in an 8 ship T26 programme would be around 30000 te set against UK steel capacity of 12M te/pa (~0.25% of UK output). That would also be spread over ten to twelve years, so in fact would be more like 0.025% of annual output.

    But you won't find Kinnochio junior saying that....