Defence spending cuts in Britain and the US blamed for this; industry & unions call for govt help.
Europe’s largest defence manufacturer, UK-based BAE Systems, on Tuesday announced it would axe nearly 3,000 jobs across 13 locations in Britain.
The cutbacks in defence spending in both the domestic market and prominent ones abroad like the US has forced the world’s second largest defence manufacturer to cut jobs. The most significant cuts will happen in three locations in the UK — 899 at Brough, East Riding, Yorkshire; 843 at Warton and Preston, Lancashire and 565 at Samlesbury, also in Lancashire.
Ian King, chief executive, said, “Our customers are facing huge pressures on their defence budgets and affordability has become an increasing priority. Our business needs to rise to this challenge to maintain its competitiveness and ensure its long-term future. Pressure on the US defence budget and top-level programme changes mean the anticipated increase in F-35 production rates will be slower than originally planned, again impacting on our expected workload.”
BAE, which has a 33 per cent stake in the Eurofighter joint venture company, alongside EADS and Finmeccanica, is continuing to pursue Typhoon sales in India, Japan, Oman and Malaysia and has said exporting the fighter aircraft remains a priority. While the Indian government is yet to announce awarding of the $12-billion contract for fighter jets, this is expected to have no impact on BAE’s cost cuts. The commercial bids for this contract are expected to be opened by the end of October, followed by evaluation and negotiations. The manufacturing and supply of this contract that would take place in India is not expected before 2015.
Ahead of BAE’s announcement about job cuts, Ian Godden, chairman of the British defence industry body, ADS, said on Monday: “There is real concern in the industry that recent news of potential job losses are only the tip of the iceberg. Defence spending 20 years ago was around 10 per cent of government spending and 4.5 per cent of gross domestic product, while on Tuesday it is five per cent of Government spending and around 2.3 per cent of GDP. With defence currently supporting over 300,000 jobs, the 10 per cent cut in government spending is estimated to lead to the loss of between 20,000 and 30,000 highly-skilled jobs in the UK.”
Neil Bentley, deputy director-general of the Confederation of British Industry, said,“Job losses on this scale would clearly be a blow to UK manufacturing. With tighter government defence budgets both at home and abroad, the competitive pressure on companies is fierce.”
Unite (union) national officer Ian Waddell said: “It’s a dark day for thousands of skilled men and women across the country and it is a dark day for British manufacturing. BAE Systems has dealt a hammer blow to the UK defence industry and Unite is determined to fight the cuts. Unite is meeting with BAE Systems on Tuesday and we will be doing everything we can to mitigate the impact of these cuts. The government cannot sit on its hands and allow these highly skilled jobs to disappear. We expect the ministry of defence to intervene urgently to protect these jobs; otherwise, the UK’s defence industry risks losing the critical mass it needs to maintain its reputation as a world leader in defence manufacturing.”
