BAE Systems will close three sites in the UK and cut jobs at three others to reduce its workforce by 500 employees.
All the sites are in the company’s Global Combat Systems (GCS) Vehicles and Weapons businesses, which currently employ 1,820 people in the UK. The losses are still subject to consultation with trade unions and employee representatives.
Guildford, Leeds and Telford will close with the loss of 330 jobs. The Newcastle site will shed 50 workers and seven will loose their jobs at the Leicester facility. Approximately 90 jobs will be cut in the weapons business at Barrow owing to the slowdown in the production of the US M777 lightweight towed howitzer.
BAE Systems also announced that another 30 jobs will be lost in an attempt to achieve better efficiency.
Some employees will be moving locations as part of the company’s ‘transformation programme’. Around 100 roles from the sites planned for closure will be transferred to Leicester and Newcastle.
BAE Systems stated it will ‘take other measures to mitigate the impact on employees, including providing retraining and support in finding new roles inside or outside the company’.
‘We must consolidate a fragmented site infrastructure to reduce fixed overheads, while, at the same time, transforming our skills mix to increase our UK focus on systems integration and win orders internationally,’ said David Allott, GCS managing director. ‘While we clearly regret having to take this step, our forecast UK order intake has reduced and we have to match the size of our business appropriately to the projected nature and volume of workload.’
The announcement follows the UK decision to postpone the Future Rapid Effects System (FRES) utility-vehicle acquisition and a downturn in work supporting British Army operations in Iraq and Afghanistan. The cuts follow 200 job losses announced in the same business in November 2008.
BAE Systems said that, going forward, Newcastle will continue vehicle engineering and assembly, integration and testing in the UK, while Leicester will develop systems engineering and systems integration expertise. Since securing the 15-year Munitions Acquisition: the Supply Solution (MASS) partnering agreement for the UK Ministry of Defence (MoD) in 2008, BAE Systems claims that its munitions business will remain unaffected by this announcement.
Even with UK combat operations ending in Iraq, the global defence contractor still believes that there are major investments to make in the field. BAE Systems is working to redesign the FRES Scout and the British Army’s Warrior tracked armoured vehicle. Both vehicles will use a cannon system developed through BAE Systems’s joint venture with French weapons manufacturer Nexter. The company is also working with the UK Ministry of Defence (MoD) to provide what the company hopes will be more streamlined, cost-effective support service for British Army armoured vehicles through the Armoured Vehicle Support Transformation programme.
‘We are continuing to make substantial investment in products, technology and skills to best position ourselves to win these programmes,’ said Allott. ‘They are crucial to the future of our vehicles business in the UK and to maintaining the skills and capability in the UK to support the urgent requirements of the UK armed forces on operations.’
The M777 produced at Barrow and purchased by the US and Canada will see a slowdown in production rates from 14 to 10 guns a month. The business anticipates orders for some 150 guns during 2009 to add to a total order book currently standing at 737. BAE Systems said that these developments will allow the company to extend production at its site until at least the end of 2011, giving a longer window to pursue further orders while production continues.