Vickers under attack as rivals join forces

Vickers is expected to cut at least 400 jobs and could even close one of its two tank plants in Leeds and Newcastle. The company was due to announce its interim results yesterday. Vickers’ Leeds and Newcastle tank plants each employ just over 600 people and at least 400 jobs are expected to go. A […]

Vickers is expected to cut at least 400 jobs and could even close one of its two tank plants in Leeds and Newcastle. The company was due to announce its interim results yesterday.

Vickers’ Leeds and Newcastle tank plants each employ just over 600 people and at least 400 jobs are expected to go. A Vickers insider admitted this week that there was not enough work for both plants.

Vickers stands to lose the most from the merger of Alvis and GKN’s armoured vehicle division, announced this week.

A bid for Alvis, the larger company of the two, is one option, analysts said this week. A Vickers spokesman said the company had talked to both Alvis and GKN ‘at assistant adviser level. It’s not been with the boards’.

Vickers could also be the subject of a takeover bid itself. US tank builder General Dynamics, which builds the US Army’s Abrams tank, is believed to be interested, according to one British defence consultant.

A combined General Dynamics and Vickers would attack what is still a robust global tank market, despite the end of the Cold War.

In June, analyst Forecast International saw a market for 13,000 new tanks over 10 years, worth $49bn (£30bn).

Vickers’ remaining Ministry of Defence orders for Challenger are dwindling but the company hopes to sell tanks to Greece, which wants 250-500, and South Africa. A UK analyst said both countries would want to build under licence, so the impact on British jobs could be minimal.

Qatar’s order for 40 100 tanks is on hold. Turkey will probably buy either US or German vehicles.