LONDON - BAE Systems has cut further jobs in its U.K. armored vehicles business just days before it is due to submit a bid to supply the British Army with a new scout vehicle.
Total job losses amount to about 90 workers. The announcement includes adjustments to a restructuring plan outlined in April that involved 500 redundancies and the closure of several sites.
The company said in a statement the latest job losses are aimed at reducing its cost base to compete for the specialist vehicle element of the Future Rapid Effects System (FRES) program, and an update of the Army's Warrior infantry fighting vehicle.
The FRES and Warrior programs are of strategic importance to BAE's Global Combat Systems-Vehicles manufacturing capability here.
The bid for the first phase of the FRES specialist vehicle requirement is scheduled to be submitted Nov. 5, followed later in the month by proposals for the Warrior sustainment program.
The sites at Guilford, Leeds and Telford originally earmarked for closure will still be shut down next year. However, BAE said that rather than move jobs from the Telford plant to its main Newcastle production center as originally planned, it now intends to open a vehicle support center close to the state-owned Defence Support Group (DSG) factory in Donnington.
Nearly 150 jobs will be transferred from Telford to the new center. BAE has close ties with DSG on the support of the British military's armored vehicle fleets.
With DSG now at the center of a new Ministry of Defence armored fighting vehicle acquisition and support strategy, the two companies are likely to cooperate closely if BAE wins the Warrior update.
The immediate effect of BAE opening the Donnington center is that the Newcastle site will lose 217 jobs rather than the 50 announced in April.
To complete the picture, the company's Leicester systems integration center is to see job losses beyond the seven announced in April. BAE says that number will rise to 65.
It attributed the job cut to a run-down of work on the Army's Terrier engineering combat vehicle, as the focus transfers from development to production. Sixty Terriers are due to be built at the company's Newcastle plant starting early next year.
Terrier production is the only remaining sizable chunk of production work at the northern England site.
The company announced its first tranche of job cuts in the sector last November. In little more than 12 months, BAE has now rolled out around 900 job cuts in its U.K. land systems business. Most of those have come in the vehicles sector, although the M777 howitzer plant at Barrow in northern England also has suffered worker reductions.
The government plans to announce the winner of the FRES deal early next year. General Dynamics, a U.S. company, is the rival bidder for the FRES requirement, with its ASCOD vehicle going up against BAE's CV90.
The winner will become the supplier of a common vehicle to cover a variety of specialist roles, starting with several hundred scout vehicles.
In the Warrior upgrade competition, which primarily involves fitting a new turret and 40mm cannon on the tracked infantry fighting vehicle, the British company is pitted against Lockheed Martin, the U.S. defense giant.
General Dynamics and Lockheed Martin are expected to announce a tie-up on FRES soon after the bid submission date. The deal could bring together the ASCOD chassis with a Lockheed-designed turret.
The turrets for both vehicle types will be similar, with the British government mandating that the FRES scout vehicle and the updated Warrior will be armed with CTA International's new 40mm cannon.
The Army's Future Combat Systems (FCS) program is ready to test a few components that soldiers may have in their hands by 2010.
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