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BAE Systems to close three UK sites as land sector transformation continues

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BAE Systems
: 02 May, 2009  (Company News)
As part of its on-going transformation programme in the UK land sector, BAE Systems is to close three sites and cut jobs at another three, with the loss of some 500 jobs in the land sector in the UK.
All the sites are in the company's Global Combat Systems (GCS) Vehicles and Weapons businesses, which currently employ 1820 people in the UK. The losses are subject to consultation with trade unions and employee representatives.

Guildford, Leeds and Telford will close with the loss of some 330 jobs
50 jobs will be lost at Newcastle
7 jobs will be lost at Leicester
Approximately 90 jobs will be lost in the Weapons business at Barrow as production for the U.S. of its M777 lightweight towed howitzer is slowed
An additional 30 jobs losses will be achieved through efficiency measures
As part of the transformation programme, around 100 roles from the sites which are closing will be transferred to Leicester and Newcastle. The company will take other measures to mitigate the impact on employees, including providing re-training and support in finding new roles inside or outside the company.

'We must consolidate a fragmented site infrastructure to reduce fixed overheads, whilst at the same time transforming our skills mix to increase our UK focus on systems integration and win orders internationally,' said Global Combat Systems Managing Director David Allott. 'While we clearly regret having to take this step, our forecast UK order intake has reduced and we have to match the size of our business appropriately to the projected nature and volume of workload.'

The announcement follows the UK decision to postpone the FRES - Future Rapid Effects System - Utility Vehicle acquisition and a downturn in work supporting British Army operations in Iraq and Afghanistan. The cuts follow 200 job losses announced in the same business in November 2008.

Going forward, Newcastle will continue vehicle engineering and assembly, integration and testing in the UK, while Leicester will grow its systems engineering and systems integration expertise. Since securing the 15-year MASS - Munitions Acquisition: the Supply Solution - partnering agreement for the UK MoD in 2008, the Munitions business remains unaffected by this announcement.

In the UK, BAE Systems is working to win the FRES Scout programme and to carry out a comprehensive upgrade to the British Army's Warrior. Both vehicles will use a revolutionary new cannon system developed through BAE Systems' joint venture with Nexter. The Company is also working with the UK MoD to provide a more streamlined, cost-effective support service for its armoured vehicles in service with the British Army under the Armoured Vehicle Support Transformation programme.

'We are continuing to make substantial investment in products, technology and skills to best position ourselves to win these programmes. They are crucial to the future of our vehicles business in the UK and to maintaining the skills and capability in the UK to support the urgent requirements of the UK Armed Forces on operations,' David Allott commented.

The M777 produced at Barrow and purchased by the US and Canada will see a slow down in production rates from 14 to 10 guns a month. The business anticipates orders for some 150 guns during 2009 to add to a total order book currently standing at 737. These developments will allow BAE Systems to extend production at the site until at least the end of 2011, giving a longer window to pursue further orders while production continues.

David Allott commented: 'We will seek to minimise the impact of these changes on employees affected by this announcement through a range of measures, including transfer to other parts of the business and retraining where possible. We will be offering all affected employees the opportunity of an out-placement service to help them find alternative employment.'

Global Combat Systems consists of the former UK Land Systems business and the former Swedish Hägglunds and Bofors operations. The business provides an array of cutting-edge products and technologies in production and development in the UK and Sweden, including the M777 and Archer howitzers, conventional and smart munitions, including the Excalibur and Bonus guided artillery projectiles, the CV90, BvS10 (Viking), Terrier and Panther armoured vehicles, the Lemur weapon system, a revolutionary new 40mm medium-calibre weapon system and associated turret technology, plus a range of simulation and training systems.
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