(NSI News Source Info) May 1, 2009: BAE Systems is to close three armored vehicle sites in the U.K. and cut up to 500 jobs as the company downsizes elements of its Global Combat System business in the wake of diminishing order levels here. 
BAE Systems, which makes the Panther command and liasion vehicles shown here, announced large-scale job cuts and three U.K. plant closures April 30. (BAE SYSTEMS)
The company announced April 30 that its support and technology facilities at Telford, Leeds and Guildford are set to close, with the loss of 330 jobs. Smaller manpower cuts will come at the vehicle systems engineering facility in Leicester, the production site at Newcastle and the Barrow weapons business, which produces the M777 towed howitzer for the U.S. military.
The announcement is the second downsizing of BAE's land systems business in the U.K. in six months. In November, the company made 200 people redundant across five sites.
BAE said December's decision by the Ministry of Defence to abandon the utility vehicle element of the Future Rapid Effects System and a downturn in urgent operational equipment updates for British forces deployed in Afghanistan and Iraq is responsible for the cutbacks.
The 90 jobs going at Barrow, though, have been caused by a recent decision to slow down production of M777 lightweight towed howitzers from 14 guns per month to 10 guns.
Canadian and U.S. armed forces already use the weapon, and Australia is expected to become a customer later this year.
Along with an anticipated order for 150 guns this year, the slow down will allow BAE to extend production at the site until at least the end of 2011 to enable it to pursue further export work.
Global Combat Systems managing director David Allott said the site rationalization and associated job losses were prompted by falling workloads.
"Our forecast U.K. order intake has reduced, and we have to match the size of our business appropriately to the projected nature and volume of workload," he said in a statement released April 30.
Allott said the site rationalization would consolidate a fragmented infrastructure, enabling the company reduce fixed overheads.
BAE said it was targeting the British Army's FRES Scout program, a major upgrade of the Warrior infantry fighting vehicle to provide work for the Newcastle and Leicester facilities, and a support initiative known as the Armoured Vehicle Support Transformation program to provide future work.
Expressions of interest from industry on providing a vehicle for the FRES Scout program were due in to the Ministry of Defence on April 30.
A company spokesman said BAE had responded, offering its CV-90 vehicle designed by BAE Hagglunds in Sweden. Invitations to tender for the Warrior program are due out soon.
Failure to win at least one of the three contracts could lead to further downsizing, a spokesman said.
The work is needed to keep the huge armored vehicle production center at Newcastle sufficiently utilized in the medium to longer term.
The factory is currently working primarily on the Panther command and liaison vehicles, Terrier support vehicles for the Royal Engineers, and Tactica security vehicles for Saudi Arabia and others.
Panther fitting out and upgrade for Afghanistan is coming to an end. The vehicle is expected to be announced as operational in Afghanistan in the next few days.
The spokesman also said the cuts were not related to a recent restructuring of its worldwide land systems and armaments business, which saw British and Swedish operations in the sector consolidated into a unit known as Global Combat Systems.
The unit also includes the Swedish-based armored vehicle and ordnance businesses at Hagglunds and Bofors alongside the British vehicle, weapons and munitions operations.
The company's U.K. Global Combat Systems Vehicles and Weapons business currently employs 1,820 people. Together with the munitions activities, the British land systems businesses generate about 850 million pounds in revenue and employ about 3,500 people.
The closure program will reduce BAE's land system operations in the U.K. to major armor vehicle sites at Newcastle and Leicester, a bridge building business at Wolverhampton, the Barrow weapons plant and a munitions operation.
BAE is hoping that redundancy numbers can be cut by transferring up to 100 jobs from the sites that are closing to Newcastle and Leicester, enabling the company to retain specialist skills.
BAE Systems, which makes the Panther command and liasion vehicles shown here, announced large-scale job cuts and three U.K. plant closures April 30. (BAE SYSTEMS)
The company announced April 30 that its support and technology facilities at Telford, Leeds and Guildford are set to close, with the loss of 330 jobs. Smaller manpower cuts will come at the vehicle systems engineering facility in Leicester, the production site at Newcastle and the Barrow weapons business, which produces the M777 towed howitzer for the U.S. military.
The announcement is the second downsizing of BAE's land systems business in the U.K. in six months. In November, the company made 200 people redundant across five sites.
BAE said December's decision by the Ministry of Defence to abandon the utility vehicle element of the Future Rapid Effects System and a downturn in urgent operational equipment updates for British forces deployed in Afghanistan and Iraq is responsible for the cutbacks.
The 90 jobs going at Barrow, though, have been caused by a recent decision to slow down production of M777 lightweight towed howitzers from 14 guns per month to 10 guns.
Canadian and U.S. armed forces already use the weapon, and Australia is expected to become a customer later this year.
Along with an anticipated order for 150 guns this year, the slow down will allow BAE to extend production at the site until at least the end of 2011 to enable it to pursue further export work.
Global Combat Systems managing director David Allott said the site rationalization and associated job losses were prompted by falling workloads.
"Our forecast U.K. order intake has reduced, and we have to match the size of our business appropriately to the projected nature and volume of workload," he said in a statement released April 30.
Allott said the site rationalization would consolidate a fragmented infrastructure, enabling the company reduce fixed overheads.
BAE said it was targeting the British Army's FRES Scout program, a major upgrade of the Warrior infantry fighting vehicle to provide work for the Newcastle and Leicester facilities, and a support initiative known as the Armoured Vehicle Support Transformation program to provide future work.
Expressions of interest from industry on providing a vehicle for the FRES Scout program were due in to the Ministry of Defence on April 30.
A company spokesman said BAE had responded, offering its CV-90 vehicle designed by BAE Hagglunds in Sweden. Invitations to tender for the Warrior program are due out soon.
Failure to win at least one of the three contracts could lead to further downsizing, a spokesman said.
The work is needed to keep the huge armored vehicle production center at Newcastle sufficiently utilized in the medium to longer term.
The factory is currently working primarily on the Panther command and liaison vehicles, Terrier support vehicles for the Royal Engineers, and Tactica security vehicles for Saudi Arabia and others.
Panther fitting out and upgrade for Afghanistan is coming to an end. The vehicle is expected to be announced as operational in Afghanistan in the next few days.
The spokesman also said the cuts were not related to a recent restructuring of its worldwide land systems and armaments business, which saw British and Swedish operations in the sector consolidated into a unit known as Global Combat Systems.
The unit also includes the Swedish-based armored vehicle and ordnance businesses at Hagglunds and Bofors alongside the British vehicle, weapons and munitions operations.
The company's U.K. Global Combat Systems Vehicles and Weapons business currently employs 1,820 people. Together with the munitions activities, the British land systems businesses generate about 850 million pounds in revenue and employ about 3,500 people.
The closure program will reduce BAE's land system operations in the U.K. to major armor vehicle sites at Newcastle and Leicester, a bridge building business at Wolverhampton, the Barrow weapons plant and a munitions operation.
BAE is hoping that redundancy numbers can be cut by transferring up to 100 jobs from the sites that are closing to Newcastle and Leicester, enabling the company to retain specialist skills.
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