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BAE Systems Closes Three Production Sites in the U.K.

BAE is closing three manufacturing sites in the U.K, as part of its on-going transformation program in the UK land sector. Although the MoD is buying armored vehicles in significant volumes under Urgent Operational Requirements (UOR), BAE's share of these contracts was minimal. Most recently the company lost an opportunity to Singapore Technology, delivering the Bronco 'Warthog' over BAE's enhanced Viking. The company was hopeful of winning a contract with General Dynamics UK (GDUK), to assemble the Piranha V vehicles originally selected for the FRES-Utility Vehicle program. However, this opportunity was lost after the MOD insisted the UK will gain ownership of the design, which GDUK could not accept. In an effort to streamline its land systems business after this loss, BAE Systems decided to close three sites and cut jobs at another three, with the loss of some 500 jobs in the land sector in the UK. These cuts follow 200 job losses announced in the same business in November 2008.

All the sites being eliminated are operating within the company's Global Combat Systems (GCS) Vehicles and Weapons businesses, which currently employ 1,820 people in the UK. Most of the job losses are at Guildford, Leeds, Telford and Barrow area. The later is trimming down production of the M777 guns to meet lower export deliveries to the U.S. and Canada. The company anticipates the current orders for 737 guns will sustain production at least until 2011.

Global Combat Systems Managing Director David Allott said that through these measures BAE is streamlining its fragmented site infrastructure, to reduce cost, and optimizing the skills and capabilities toward future export oriented business.
The announcement follows the UK decision to shelve the FRES - Future Rapid Effects System - Utility Vehicle acquisition. BAE Systems is still eyeing the FRES Scout program. The company is also hoping to win the planned Warrior Upgrade program - both vehicles will use the new canon the company is developing with the French company Nexter.