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Last Updated: Thursday, 27 January, 2005, 19:04 GMT
Defence firm cutting 1,400 jobs
Tornado jet
BAE said that cuts to defence budgets have squeezed its earnings
UK defence firm BAE Systems plans to cut 1,396 jobs at 13 sites across the UK, a spokeswoman has said.

The company, which makes commercial and military equipment, said there were not enough orders to sustain the positions.

Three of BAE's five main businesses - aircraft electronics, defence repairs and defence electronics - will be hit by job cuts over the next few months.

Sites to be hit include Chadderton near Manchester, Edinburgh, Rochester in Kent, Luton, Southampton and Basildon.

Countrywide cuts

BAE employs 40,000 people at 70 sites across the UK, almost half of its 90,000 staff worldwide.

The days when there were three different types of strategic bomber in production have gone
Richard Caltart, BAE spokesman

It plans to cut 431 jobs in its avionics business - which makes parts for commercial and military aircraft - at plants in Basildon, Luton, Edinburgh Crewe Toll, and Southampton.

BAE's radar business AMS will lose 340 jobs. The division is a joint venture with an Italian partner, and has operations at Christchurch, Chelmsford, Cowes, Frimley, Broad Oak and Dorchester.

About 230 jobs are in danger in Rochester, with 60 on the block in Edinburgh Lochside.

The defence repairs unit at Chadderton will lose 335 positions.

Past glories

"It's to do with workload; it's as simple as that," BAE spokesman Richard Caltart told BBC News. "The days when there were three different types of strategic bomber in production have gone."

"BAE, in common with all companies in its field, is subject to competitive pressures. There just aren't enough projects."

Mr Caltart said that cuts to UK and European defence budgets have impacted on BAE's business in the region, limiting the number of contracts on offer and increasing competition.

BAE has put in a better performance in the US, where defence spending is rising and the firm has 26,000 employees.

Union consultation

The decision on job cuts was made after BAE's annual assessment of predicted workloads and in close consultation with unions, Mr Caltart said.

These are highly skilled jobs, and when the jobs have gone, the skills will have gone with them

Trade union Amicus said that it was concerned about the future of the UK defence industry, saying that if it continues to shrink it may become too small to win large contracts.

"The UK is the second most successful aerospace country in the world behind the United States," said Amicus national officer John Wall.

"What is crucially important is to remain so and to retain a critical mass and technological capability to be able to compete globally, " he continued.

Amicus warned that "these are highly skilled jobs, and when the jobs have gone, the skills will have gone with them".

BAE's Caltart declined to comment on the company's economic performance, saying only that the firm had made "steady progress".

It has annual sales of about 12bn ($23bn) and clients in 130 countries.

The company has been fighting to win contracts, and there was speculation last year that the firm would be broken up and a number of its divisions sold off to firms such as EADS.

Shares in BAE dropped 1.5p, or 0.6%, to 243p in London.

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