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BAE to cut 1,000 jobs
LONDON, England -- BAE Systems, Europe's biggest defence contractor, said on Tuesday it would cut more than 1,000 jobs in the UK in an attempt to stem huge cost overruns. BAE, which is in the midst of a heated bidding battle for several multi-billion-dollar UK Ministry of Defence contracts, said the job losses would come at its Sea Systems submarines and ship-building division. "The... actions reflect the need to continue to maximise efficiency whilst retaining the full capability to deliver Sea Systems products into the UK and export markets,'' BAE said in statement. BAE said 700 positions will be lost at Barrow-in-Furness, in the north of England. Another 265 jobs will be cut at its shipyards on the Clyde river in Scotland, as well as 50 at its Waterlooville operations in southern England and about 30 at Farnborough, Hampshire. The group said it would continue to develop its centre for submarine programmes at Barrow-in-Furness and consolidate its Type 45 Destroyer operations at the Clyde shipyards. The plans must still be reviewed by the Ministry of Defence. BAE (BA) shares were down 1.7 percent to 115.50 pence in early London trading on Tuesday. The group's financial health has been hurt by cost overruns of nearly £1 billion ($1.61 billion) on ministry contracts to build Nimrod maritime patrol aircraft and Astute submarines. At the same time, it is facing stiff competition for new ministry contracts. There is growing speculation that BAE will lose a £3 billion ($4.8 billion) aircraft carrier contract to the French group Thales. The ministry is expected to decided on the contract by the end of January. Defence Secretary Geoff Hoon stirred debate over the contract last week after he was reported as saying BAE was no longer British because the majority of its shares were now in the hands of investors from outside the UK. Those comments were seen as hurting BAE's chances of winning several UK defence contracts. But a ministry spokesman said no decision have yet been made on the contracts. "It is important that we get the best solution for the UK, taking economic benefits into account," the spokesman told Reuters.
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