Lancashire is facing a major blow to its hi-tech skills base after the news that around 1,000 jobs are set to be lost at BAE Systems.
The axe is set to fall mainly on BAE’s Warton and Samlesbury sites in Lancashire, but many business leaders fear that there could be a knock-on effect in supply-chain firms in the region.
An official announcement has yet to be made to the City but the losses are thought to be linked to the ongoing slowdown in the production of the Typhoon and Hawk, with question marks on future orders for the aircraft.
The jobs are also set to be lost from other BAE Systems sites across the country such as at Brough in Humberside where work on the Hawk is carried out, but the bulk of the redundancies are said to be in Lancashire.
A company spokesman said: “BAE Systems continually reviews its operations to make sure we are performing as effectively and efficiently as possible, delivering our commitments to existing customers and ensuring we are best placed to secure future business.
“If and when there are any changes proposed we are committed to communicating with our employees and their representatives first.”
Rumours have been circulating for some months about potential losses and in July the new chief executive Charles Woodburn, who took over from Ian King, hinted in August about cost cutting as part of the ongoing strategy.
He said although they were expecting more orders for the versatile aircraft, the timescales were uncertain and action would have to be taken.
BAE employs 34,600 people in the UK and the Typhoon project alone employs 5,000.
It is vital that the Typhoon production line be slowed down to prevent it from having to stop and be restarted in the future.
Around 300 companies are involved in the supply chain for the aircraft and if the production was severely cut back its effects would be felt across Lancashire from the Fylde coast, through Preston, Chorley and the Ribble Valley into East Lancashire, where there are a number of aircraft parts manufacturing companies.
BAE said in August that for the six months ending June 30, 2017, the company posted sales worth £9.5bn, up from £8.7bn in the same period last year and its earnings rose from £849 the previous year to £945m.
In September, BAE Systems had a promising success with a statement of intent for an order for 24 Typhoon aircraft from Qatar which helped raise hopes on safeguarding jobs.
But with major customer Saudi Arabia still thinking over an order for a further 24 Typhoons following the delivery of the last of its 72 orders in June and stiff competition from the likes of the Rafale and F-35, the lack of certainty over future orders has prompted a close look at production needs.
‘I hope that in reality few people will leave’
Fylde MP Mark Menzies has said it is vital to maintain the Typhoon production line at Warton to help preserve skills and jobs for the future.
He said: “I know this will be a deeply unsettling time for the workers at BAE and I am hoping the company is working to the same model as last time, when hundreds of redundancies were announced and in reality, very few people left the business as they were deployed on other projects.
“They will be looking at what other opportunities there are for these workers, such as on BAE’s nuclear submarine and shipbuilding programmes. We also need to bear in mind that there are potentially lucrative contracts on the way which could help sustain these jobs.
“It is vital that the Typhoon production line be slowed down to prevent it from having to stop and be restarted in the future.”
Fylde councillor and former St Annes town mayor Vince Settle worked at BAE Systems Warton for 43 years until 2011 and has called on the Government to do more to clinch new aircraft deals and keep orders coming.
“It’s a very simple equation – without orders there are no jobs,” he said.
“Warton is now the only BAE Systems design centre in the UK and there are 2,500 highly skilled people there who specialise in design and rely on fresh orders.
“The Government needs to be speeding up deals to bring in those all-important orders.
“Jobs going will have a major effect across the Fylde as the vast majority of the employees live in our area and contribute to the local economy. If the jobs aren’t here, they will go elsewhere to find them.”
Chorley MP Lindsay Hoyle, who has many constituents who work for BAE Systems, said the news was ‘deeply worrying’.
He added: “I have spoken with the company and I fear that scale of the job losses could be very high.
“I’ve immediately contacted Unions, the Ministry of Defence and the Department for Business Energy and Industrial Strategy to facilitate a cross-party task force to avert this disaster.
“We need real leadership from the top – that means BAE Systems chief executive Charles Woodburn and the Prime Minister talking today and taking action.
“Lancashire builds the best fighter jets in the world because we have the best work force in the world and we must to keep these jobs.”
Preston MP Mark Hendrick said: “My initial reaction is one of shock. I would have expected job losses of this magnitude to be transmitted by the company properly to the staff and the local MPs properly rather than it leaking out to the media.
“My concern is for the aircraft workers and their families and the future they face.
“This is a leading hi-tech company employing thousands in highly skilled jobs and we need to find out what the Government is prepared to do to help.
“I shall be writing to Government ministers to see what assistance can be given.”
He said although BAE Systems was a private company, it was of such importance to the country that the Government should give it the support other international defence companies got in their countries.
He said: “France has strongly backed its aerospace companies and even sent out the prime minister to help win their order in India, which we lost out on. Very often we are slow off the mark in this respect.
He added: “BAE Systems has not long opened its fantastic £15.6m training centre at Samlesbury. I am concerned to see the long-term future of our young people secured and the training centre reach its full potential.”
Lancaster and Fleetwood MP Cat Smith said: “This is devastating news for all those who work at Warton, including many constituents and their families. These are highly skilled jobs and the impact of their loss on our local economy will be deeply felt.
“The Government must come forward urgently with a clear plan to secure these jobs at BAE, as well as a proper defence industrial strategy to give the industry the certainty that it needs.”
Richard Halstead, director of member engagement for EEF, the manufacturers’ organisation in the North West called the job losses a ‘significant blow’.
He said: “The aerospace and defence sector is critical to manufacturing not just in the North West but across the UK.”
‘There is a finite life for all products’
UK defence analyst and author Tim Ripley said any product has a finite life span and eventually would be superseded by new models.
He said: “We are at the point where the Typhoon has been in production for many years. The major order from the RAF is coming to a close and BAE Systems now depends on orders from abroad to keep the assembly facilities and the supply chain going.
“So far they have not the volume of work to match those original UK and Saudi orders going beyond the turn of the decade. There are 12 for Oman, 28 for Kuwait and potentially 24 for Qatar but that big order is not there and something has to give.”
He said the company had acted to bring work on the Hawk to Warton from Humberside to help retain skilled workers and Oman and Saudi Arabia had ordered more of those high speed trainers but new orders were needed.
He added: “There are good rival planes out there but not every air force can afford them so there are potential for more orders for Typhoon but it is not looking like the scale of the past.”
He added that the upgrades such as the e-scan radar and new ground attack capability meant that as a versatile aircraft it had improved chances of being chosen in future by countries who could not afford different specialist fighter and bomber aircraft.