BAE Systems axes 3,000 jobs as governments slash spending

27th September 2011, Comments 0 comments

British arms manufacturer BAE Systems axed 3,000 jobs on Tuesday, mainly at its military aircraft division, as reduced spending by governments hits demand for Eurofighter Typhoon and F-35 fighter jets.

"Our customers are facing huge pressures on their defence budgets and affordability has become an increasing priority," BAE Systems chief executive Ian King said in a statement unveiling the "nearly 3,000" job losses.

"Our business needs to rise to this challenge to maintain its competitiveness and ensure its long-term future," King added.

The company has a global workforce of 100,000 people, of which 40,000 are in Britain. It has customers across more than 100 countries and enjoyed annual sales of £22.4 billion ($34.8 billion, 25.7 billion euros) in 2010.

The biggest number of job cuts will be in northern England at facilities in Brough, where 899 positions will be lost, and in Warton and Samlesbury.

There will also be jobs shed at BAE's head office in Farnborough in the south, and at other sites dotted across Britain.

The group has also begun a consultation about ending manufacturing at the Brough plant, which currently employs 1,300 workers.

The news, which sparked outrage from trade unions, followed days of intense media speculation over impending job cuts at Britain's biggest defence company.

BAE Systems said that its military aircraft wing had been hampered by a slowdown in orders for the Eurofighter Typhoon and F-35 jets.

"Some of our major programmes have seen significant changes. The four partner nations in the Typhoon programme have agreed to slow production rates to help ease their budget pressures," King said.

"Whilst this will help extend our production schedule and ensure the production line stays open until we receive anticipated export contracts, it does reduce the workload at a number of our sites."

The Eurofighter is a project involving Britain, Germany, Italy and Spain.

BAE added that it has also been hurt by painful budget cutbacks in the United States.

"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," said King.

"To ensure we remain competitive, both in the UK and internationally, we need to reduce the overall costs of our businesses in line with our reduced workload."

BAE has also been hit by the British government's cuts to public spending, which include a plan to shrink its armed forces and scrap key assets like its flagship aircraft carrier.

Unite, Britain's biggest trade union, described the job losses as a "dark day" for domestic manufacturing.

"After days of speculation and rumours, our worst fears have been confirmed," said Unite official Ian Waddell.

"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 have dealt a hammer blow to the UK defence industry and Unite is determined to fight the cuts."

He added: "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."

© 2011 AFP

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