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Monday, February 22, 1999 Published at 11:59 GMT

Business: The Company File

Royal Ordnance closure 'wrong decision'

Royal Ordnance has armed the British forces for centuries

Trade union leaders are stepping up their campaign to prevent the loss of thousands of jobs at Royal Ordnance, the crisis-hit British arms maker.

Union officials are putting increasing pressure on British Aerospace, which owns the Royal Ordnance, to overturn the planned closure of its Bishopton factory in Glasgow which employs 300 people.

British Aerospace (BAe) has blamed falling orders and intense competition from overseas rivals for its decision to close the factory at the end of 2001.

The Transport and General Workers' Union says a document leaked by a senior civil servant showed that in 1997 the government was advised by a top level committee to keep the plant open.

National Secretary of the TGWU Jack Dromey said the document from the Defence Scientific Advisory Committee proved that the government's decision was wrong and called for a U-turn.

He said the leak proved that civil servants and the Army were worried about the closure. British Aerospace has blamed the award of a vital Ministry of Defence contract for missile propellants to a South African firm for the closure decision.

Mr Dromey said the government had failed to cost alternative providers of propellant. "Senior civil servants have told us that alternatives have not been costed and that companies making propellant have not been spoken to.

"Apparently the government intends to hold a competition to find an alternative supplier, which is the Yellow Pages approach to defence procurement.

The plant, which is due to close by the year 2001, is the only British firm which makes propellants for defence products. The union calls comes just two days before an inquiry by the Defence Select Committee into the closure.

Under threat

Royal Ordnance's other British plants are also under threat as the loss-making group faces the worst crisis in its 440 year history.

Unions have called on BAe to back its loss-making subsidiary, and on the government to intervene.

BAe has been discussing the possibility of merging the group with German firm Rheinmetal, but nothing has been agreed despite several months of talks.

Overall the group employs about 4,000 people. Staff have already learned that their pay will be frozen while Royal Ordnance's current problems persist.

Since it was founded in 1560, Royal Ordnance has provided Britain with weapons for most of its major battles, including both World War I and II and the Battle of Waterloo.

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