Ferguson Marine to cut a quarter of its workforce as orders stall

Its 34 apprentices will not be affected in the short term, while another 10 trainees are preparing to begin college.

The cuts come as work draws to a close on MV Glen Rosa, the second of two heavily delayed CalMac ferries. The vessel is due to be handed over by the end of 2026.

Glen Rosa has been moved downriver to Inchgreen for its final fitting out and commissioning. This has left Ferguson Marine’s main yard without a ship under construction for the first time in 12 years.

The company has also recently completed subcontracting work for BAE Systems on its Type 26 frigates and has no confirmed orders lined up beyond Glen Rosa.

The Scottish Government announced in March, before the Holyrood election, that it planned to award Ferguson Marine contracts for four new vessels directly.

The proposed work includes two smaller CalMac ferries, a fisheries research ship and a marine protection vessel. Ministers described the orders as a “bridge to the future” for the yard.

Kate Forbes, who was Economy Secretary at the time, said much of the early work had already been completed, including securing legal advice on whether the contracts could be awarded directly.

However, she said the Government would also need to engage with the Competition and Markets Authority.

Months later, none of the four contracts has been formally confirmed, with ministers maintaining that “due diligence” is still under way.

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Even if an order were placed immediately, the yard would need to complete at least 12 months of design work before it could begin cutting steel on a new vessel.

Ferguson Marine’s chief executive Graeme Thomson said delivering the Glen Rosa remained the yard’s primary short-term objective.

“However, as the vessel nears completion, we face an inevitable gap in workload while we work with the Scottish government to make the relevant preparations to enable us to proceed with contract negotiations,” he said.

Mr Thomson stressed that shipbuilding depends on continuity of work.

“Taking proactive action now ensures we protect the long-term viability of the yard and remain lean, modern, and ready to cut steel on the new fleet as quickly as possible,” he added.

Economy, Tourism and Transport Secretary Stephen Flynn said the redundancy scheme was part of efforts to modernise the yard and make it more competitive.

He said the reduced workforce would not affect the completion of Glen Rosa.

Mr Flynn added that the Government’s plan to award Ferguson Marine four vessels directly “continues to undergo full due diligence further to next steps which will be announced to parliament in due course.”

The yard was brought into public ownership in 2019 after a lengthy dispute between its former owner and the state-owned ferry agency Caledonian Maritime Assets Ltd over the extra costs of building two dual-fuel CalMac vessels.

The first ship, MV Glen Sannox, was eventually handed over in November 2024.

The pair were the first liquefied natural gas vessels to be built in the UK, but design problems and disagreements over costs left both ships years late and significantly over budget.

Although there is broad consensus that the workforce bore no responsibility for the problems, the saga is widely thought to have deterred prospective customers from commissioning new builds at the yard.

Ferguson Marine, founded by four brothers in 1903, has delivered more than 360 vessels over its history, but now faces structural headwinds common across British shipbuilding.

The Society of Maritime Industries estimates that foreign shipyards typically undercut their UK counterparts by 10 to 20 per cent, benefiting from lower labour costs and more generous state support.

That competitive disadvantage was starkly illustrated two years ago when Ferguson Marine lost out on a contract for seven small CalMac vessels to a Polish yard, despite its bid being praised for quality.

Ferguson Marine has repeatedly called for procurement decisions to consider the wider “social value” of building ships in Scotland, including the jobs and economic benefits created.

However, CMAL says Scotland’s pre-Brexit procurement rules require all bidders to be treated equally, limiting how much weight can be given to domestic benefits.

More recently, Ferguson Marine was unable to bid for the contract to replace MV Lord of the Isles. The yard’s management claimed CMAL’s entry requirements could not be met by any UK commercial shipbuilder.

Despite remaining unconfirmed, the four promised contracts have allowed Ferguson Marine to update its business plan. This could unlock £14.2million in modernisation funding that ministers first announced more than two years ago.