Defence chief warns British contractors

Robertson urges companies to rationalise – or be defeated

Defence secretary George Robertson wants the British defence industry to cut jobs to meet tougher competition from the US.

‘Europe’s defence industry must rationalise or die,’ Robertson said this week. He wants ‘urgent proposals from industry’ on how a ‘thriving competitive private sector industry’ can be created.

He said that this can only be done by industry, ‘not Government fiat’.

The ‘urgent proposals’ refer to cuts in capacity, an MoD source said.

Robertson, speaking at a seminar of industrialists organised by the Defence Industries Council, said the Government had a role to play, though he did not promise cash. Government could facilitate ‘international agreements which allow mergers or joint ventures to succeed,’ he said.

It could also help by setting ‘a clear policy framework which allows industry to make sensible decisions on how to rationalise’.

Companies had to take the lead in rationalisation, Robertson said.

An MoD source said: ‘What we’re looking at is a cost effective and efficient industry which can compete across the world, and by definition the capacity will have to meet the demand.

‘There are not sufficient contracts provided by the MoD to support the industry at its current size. Clearly the European industry will need to consolidate itself to compete effectively with the US giants.’

Robertson will stress the urgency of rationalising in talks with European counterparts in the coming months.