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21 Jan 03. The dogfight between BAE SYSTEMS and the MoD continued this week with BAE retaliating following reports that Geoff Hoon apparently favoured the Thales bid by referring to BAE as no longer a UK company. Certainly there are little signs of a rapprochement between the two organisations with BAE using the job card at this time. However to link these losses as political is viewed in some quarters as overkill, they would have occurred in any event due to contract delays and final deliveries.

Certainly this announcement has brought the unions and particularly Jack Dromey behind BAE and highlights a genuine concern within the unions about UK Industrial policy as we highlighted last week.

With the Type 45 contract going to Scotstoun in Glasgow and the Astute contract being rumoured as stalled pending design changes there are few job opportunities in the Barrow area with Oxley and Glaxo being two other large employers in the area. The other alternatives are the dole, call centres or fast food, a damning indictment to a workforce steeped in technical excellence going back to the 19th Century.

The details of the job losses are 700 job losses in Barrow-in-Furness, 265 in its shipyards on the Clyde, and 50 from its Underwater Systems operation at Waterlooville, Hampshire. Additionally, the company announces the loss of up to 30 posts at Farnborough, Hampshire, arising from a review of the Astute management organisation. All of these will be taking effect progressively over the next several months. In accordance with normal company practice, BAE SYSTEMS will be entering into consultations with employees and Trade Union representatives.

Additionally, BAE SYSTEMS announces that it intends for Barrow, supported by Farnborough, to continue to develop as a world class Submarine Centre of Excellence within the company, for current new and future submarine programmes. As well, the company now plans to consolidate its work on the Type 45 Destroyer build programme into the BAE SYSTEMS shipyards on the Clyde. This proposal is currently under consideration by the UK MoD.

The principal reason for the shipbuilding job losses is the very significant drop in workload the shipyards are experiencing, with no prospect of an increase on a scale large enough to compensate within at least the next four years, despite the considerable efforts of the company to find fill-in work. A similar, but less severe, situation exists in BAE SYSTEMS Underwater Systems following delays in award of various contracts.

In 2002, BAE SYSTEMS undertook a series of actions, in consultation with the UK Ministry of Defence, to address the fundamental issues facing its Sea Sector business.

Since this process began there have been some notable positive results:
Two Auxiliary Oiler vessels delivered to the UK Royal Fleet Auxiliary. Both ships are performing well.
A programme established with the UK MoD to ensure the entry into service of the Landing Platform Dock ships Albion and Bulwark, progressing well, with the first of class now successfully through its initial Sea Trials.
Six Landing Craft Utility vessels delivered – currently undergoing trials with the Royal Marines and the remainder very close to completion.
With Swan Hunter, construction of the Landing Ship Dock Auxiliary (Bay Class) vessels has commenced
A highly successful build programme of Offshore Patrol Vessels for an export customer is nearing completion.
The 200th Spearfish torpedo has been delivered to the Royal Navy.

In order to continue to succeed, BAE SYSTEMS Sea Systems must resolve two entirely separate areas that require continuing attention: the Astute and Type 45 Programmes and the issue of workforce size caused by unacceptably lengthy gaps in workload.

For the avoidance of doubt, today’s announcement has no connection with the company’s ongoing discussions with the Ministry of Defence

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