The former boss of struggling shipbuilder Harland & Wolff is refusing to take any blame for his role in the firm’s recent troubles. His failure to acknowledge the part he played in the crisis engulfing one of Britain’s most iconic companies is shameful, Guy Taylor writes
The real point is that Wood is shirking responsibility for his own role in bringing one of the most iconic industrial businesses in the UK so close to the edge.
You would think being forced out during a brush with bankruptcy would have taught the chief executive of Harland & Wolff, John Wood, some humility.
Apparently though, the Captain of the Titanic thinks leading the famous shipbuilder as close to collapse as is humanly possible was not his fault.
It was, he claims in a Linkedin post “changing leaders across different parties” that meant Harland & Wolff did not get the cash it needed.
If he means the new government’s refusal to risk hundreds of millions of taxpayer money to prop up a business that was demonstrably financially unsustainable, some fresh thought might be in order.
Yes, Harland and Wolff’s battle to stave off collapse began when Labour said it wouldn’t guarantee a £200m loan seen as critical to its survival, but leaving it to the market has not yet proved disastrous.
The government has played a close role in talks with the firm’s US lender, Riverstone Credit Management, which resulted in around £20m in emergency funding that saved Harland and its employees in the short term.
Even leaving that aside, Wood’s view conveniently fails to mention accusations of financial mismanagement and the fact the previous Conservative leadership were also split on the decision to risk taxpayers money in guaranteeing the loan.
In his departing note, the executive pointed to “significant” contract wins as evidence of the leadership’s success.
That’s all well and good but it doesn’t matter that much if the firm is incapable of following through in the long term. Take a £120m deal with the Falkland Islands to re-develop a port, or its Scilly Ferries venture; both gone in the last couple of weeks due to the financial difficulties.
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The real point is that Wood is shirking responsibility for his own role in bringing one of the most iconic industrial businesses in the UK so close to the edge.
Perhaps the most obvious sign of his controversiality is that the all-important agreement with Riverstone was reportedly contingent on his exit. In a weird way, this means Wood can actually take credit for saving the Titanic builder from its metaphorical iceberg – yet he’ll also have to explain such a clear lack of faith from those involved in the rescue.
But lets look back over the last few years, as shareholders have been utterly infuriated by a series of strategically baffling decisions.
Chief among them is Wood and the leadership of the shipyard’s obsession with operating its first-ever ferry service in the Scilly Isles. Harland & Wolff was spurned for a contract to replace the Isles’ ageing service by the Isles of Scilly Steamship Group (ISSG), in a dispute that roped in the then-defence secretary Grant Shapps.
French shipbuilder Piriou won the tender instead but its Belfast rival just couldn’t let the rejection go. Harland then launched a failed attempt to takeover the ISSG in its entirety and, when this was rejected, decided to begin its own rival ferry service.
Local islanders were confused at the time, considering Harland and Wolff had absolutely no ferry-operating experience. Fast forward to the last few months’ fiasco and critics will feel vindicated, as it was announced in early August that Harland’s Scilly Ferries would be wound down to cut costs.
Why Harland & Wolff was so focused on the business is still a mystery, not to mention why the board of directors played ball.
The company, which only bought the iconic shipyard out of adminsitration in 2019, has not made a profit since its focus pivoted away from the development of a gas storage project to its maritime ventures. Some shareholders, who bought into the business prior to this shift, believe this was also an ill-thought out decision.
Between 2021 and 2022, Harland and Wolff lost £100m. In its most recent unaudited annual report, it posted around £43m in operating losses.
The AIM-listed firm’s financial results are still unavailable to the public. Failure to publish its fully audited results in July led to shares being suspended. It confirmed today the suspension would be indefinite as it focuses on working with newly appointed financial adviser Rothschild to secure its financial future.
Who knows what is really going on behind the scenes. Harland & Wolff refused to answer any questions regarding the Scilly Isles ferry venture, company finances and the circumstances surrounding Wood’s departure when contacted. When asked for comment on his record at the firm, Wood replied: “Think you are barking up a few wrong trees.”
A shareholder collective, which owns around 30 per cent of shares in Harland, recently voiced fears of a pre-pack administration, which would keep the business in operation but see their investments wiped out.
That outcome should not save all parties from harsh criticism and would still place some of the nearly 1,500 jobs at the company’s facilities across the UK at risk.
What could make the situation even worse would be the failure of a £1.6bn contract from the Ministry of Defence to build three military vessels. It would mean, for the first time in history, Royal Navy warships would be built overseas, by the Spanish shipyard Navantia.
Britain’s industrial credibility is at stake, and Wood needs to acknowledge his role in the firm’s decline.