British defense contractor BAE Systems plc is on the brink of cutting 2,280 jobs, a result of reduced defense spending by the UK government.
In order to bridge the gap between current demand and future anticipated export contracts the production rate on the current Typhoon program for the partner nations will be slowed, BAE said late Friday.
BAE Systems recognizes that the long-term future of Typhoon [aircraft] is based on its export potential and therefore we need to ensure we are in the best possible position to secure those opportunities.
BBC reported that three manufacturing facilities will be impacted: Brough in East Yorkshire will lose 900 jobs, Warton in Lancashire will lose 820; and Samlesbury, also in Lancashire, will lose 560 jobs.
Part for the UK military’s Typhoon fighter jets are manufactured at Brough and Samlesbury, while Warton is responsible for final assembly.
The expectation of the impending job cuts come on the heels of reports that BAE’s pre-tax profits for the first half of the year fell by 12 percent from the year-ago period --- with losses to persist.
BBC correspondent Arif Ansari wrote: “Workers may well be shocked, having assumed that the uncertainty of the government's defense review was behind them. But there is a longer-term problem of fewer Typhoons being ordered than expected. BAE is hoping to win new export deals shortly to countries including Malaysia, India, Oman, Saudi Arabia and Japan.”
He added: “That means BAE cannot afford to lose too many skilled staff, and will probably protect its apprenticeship program. But, of course, the workforce will fear the worst until the official announcement is made.”
BAE itself has not officially announced layoffs, only stating on Monday: Whilst there has been a lot of media speculation it has always been our intention to communicate the results of the review to employees as a priority, and this will take place on Tuesday, 27 September.
Meanwhile, Unite, the labor union which represents defense workers, is seeking urgent meeting with BAE officials to avert the layoffs.
These job losses will be a hammer blow to the U.K. defense industry, which is already reeling with the consequences of the government's 'buy off the shelf' policy, said Ian Waddell, Unite's national officer for aerospace. in a statement.
We will be seeking urgent talks with BAE Systems to try and clarify where these jobs are under threat and to work with them to avoid compulsory redundancies wherever possible.
John Cameron, a Unite official at Warton, told media: It would be a massive blow, we're just winding down some previous redundancy consultations.
Mark Menzies, MP for Fylde, warned the job cuts would badly hurt the local economy.
Everyone knows somebody who works at BAE Systems, he told reporters.
It will also have a huge impact on businesses from local hotels to taxis.
Ben Wallace, Conservative MP for Wyre and Preston North, had a more tempered view.
I think what we need to recognize, what it will be about will be trying to keep this place [Warton] going...that we are still manufacturing some of the best aircraft in the world. That means we have to slow production to get to some of the markets that we need to sell them in in the future.
Reportedly, Prime Minister David Cameron is seeking to push for Typhoon contracts in India and Japan.
Jim Murphy, the Labor Party's shadow defense minister, warned: We need a fast response from ministers with a clear plan of action. At a time when it is so hard to find a new job, this is a dreadful moment to lose the one you have. The defense industry is vital to the U.K., supporting both our forces on the frontline and the wider U.K. economy.”
Murphy added: Labour's industrial strategy has been replaced with this [coalition] government's deficit reduction plan and as a result both our industrial base and our equipment program are being hit.
Amidst continued declines in defense spending by both the UK and US, BAE already slashed 15,000 jobs in 2009 and 2010.