article: They show that in 1987, faced by mounting losses and missed deadlines, the Secretary of State, Tom King, recommended the closure of the shipyard. At the same time, however, a confidential memo from the NIO warned of the possibility of serious political unrest in the Protestant community if the 3,000-strong workforce was paid off. The problems at the yard surfaced in a memo from D J Watkins of the NIO to David Fell of the Stormont Department of Economic Development (DED) on 24 June, 1987. The official reported that the Secretary of State "was deeply disturbed to hear your report of increased cash difficulties [at] Harland and Wolff." Mr King understood that the company was in need of an immediate injection of Â£10m and wanted to know why the need for additional cash had not been identified earlier. In a confidential memo on 30 June, 1987, Peter Viggers, the Stormont Industry Minister ascribed the difficulties at the firm to its failure to complete a stage in the construction of a Swops oil tanker (designed to draw oil from submerged sea wells). More serious, in Mr Viggers' view, was the breach by the company of its annual budget. He added: "I believe we have now reached crisis point in our dealings with Harland and Wolff." It was essential that the government acted decisively as cash flow problems at the firm had become "a recurring problem". This suggested "a reversal of our current hands-off approach of leaving management to manage and of market forces to determine the size of the yard". One option was to place the company in receivership, he wrote. At a follow-up meeting between the minister and John Parker, the Harland and Wolff managing director, on 2 July, 1987, Mr Parker was "shaken" by the minister's determination to send in a firm of accountants "to let the government know the true position". On 4 September, 1987 Mr Viggers received the report from Deloitte, Haskins and Sells on the financial problems of the yard. It warned the DED that it could no longer accept the "over-optimistic assumptions" of management. It was Deloitte's understanding that another major vessel, the AOR was also behind schedule. In their view, Harland and Wolff had adopted unusual commercial practices: for example, earlier that year, a director, close to retirement, had been made technically redundant, enabling him to receive a redundancy payment of Â£40,000. In November 1987, the Northern Ireland Secretary noted the lack of "acceptable orders" for Harland and Wolff and the danger of the firm accepting a "potentially catastrophic" order for a holiday liner. While acknowledging that the closure of the yard would have "a profound impact on morale in Northern Ireland" he nonetheless felt that "the yard should be closed after the AOR tanker was completed". Moves to shut down the Belfast shipyard elicited a plaintive memo from F G McConnell of the NIO to Secretary of State Tom King on 9 September, 1987. This warned of the political and security implications of any phased-down closure of Harland and Wolff in view of its symbolic
summary: The government recommended the closure of the former shipbuilding giant, Harland and Wolff, in 1987, according to newly declassified files.