Jobs axe hangs over Clydeside as BAE’s sales and profits struggle

By MARTIN FLANAGAN
Published on Friday 17 February 2012 00:00

A POTENTIAL axe still hangs over one of BAE Systems’ three shipyards on Clydeside and Portsmouth after the defence giant yesterday unveiled a 7 per cent fall in annual profits and warned of flat sales in 2012.

A POTENTIAL axe still hangs over one of BAE Systems’ three shipyards on Clydeside and Portsmouth after the defence giant yesterday unveiled a 7 per cent fall in annual profits and warned of flat sales in 2012.

Ian King, group chief executive, said the review of BAE’s warship capability that involves outside management consultants was continuing and gave no timeframe for a decision.

On how Draconian any restructuring resulting from the review might be, King said: “Nothing is ruled out in any review we do. We review our business all the time.”

He said there had been a “massive bubble of employment” in BAE’s shipyards associated with the carrier programme but given the cutbacks in orders “we have come off that high”.

Some defence analysts have said Portsmouth might be more vulnerable to possible closure because it is smaller than the Scottish operations at Govan and Scotstoun.

But King countered: “It is not just a Portsmouth review. It’s a warship capability review. A decision will be made [on the division’s future] when we and the government are willing to make a decision and it has to be professionally done.”

BAE employs 3,700 in Clydeside and 4,300 in Scotland overall. The group said yesterday that further redundancies could not be ruled out after 3000 were made in the UK last year as its two main markets of the US and UK sharply cut defence orders.

Meanwhile, King said it would be inappropriate for the company to get involved in the debate about its ongoing commitment to its Scottish sites if Scotland voted for independence.

“It’s not for us to determine between Scottish and English governments how they run their procurement facilities. It’s not for us to get in between politicians,” he said.

BAE revealed revenues fell 14 per cent to £19.2 billion in 2011 as the US cut supply orders following its pull-out from Iraq. The group said it expected “little sales growth” in 2012 as President Obama has capped America’s defence budget at last year’s levels for 2012, while the British government wants to cut defence spending by 8 per cent over four years. BAE, which produces F-35 fighter jets and is the biggest supplier of land vehicles to the US army, saw underlying earnings fall to £2.02bn last year from £2.2bn in 2010.

However, the cash-rich contractor hoisted the total dividend 7.4 per cent to 18.8p from 17.5p in the previous 12 months, taking the total handed back to shareholders in the past two years to £2.2bn.

BAE’s shares were one of the main Footsie fallers yesterday, closing down 7.75p at 325.265p

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Aucthtermuchty

Friday, February 17, 2012 at 05:46 PM

once Indepemndence comes , there will be no ned for any Scotsman to work You dont need to waste your life slaving away in the rat race , when you got OIL .

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Bennachie

Friday, February 17, 2012 at 12:12 PM

Once independence comes then Scotland will have to build its own fishery protection vessels, replace its aging ferries and get back into the business of building commercial vessels.

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crecy1346

Friday, February 17, 2012 at 05:20 AM

Once independece comes of course there will be no naval ships manufactured in Scotland.Not for the Uk navy anyway!!

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