LONDON — BAE Systems is to shed nearly 2,000 jobs across several of it’s U.K. operations, with the brunt of the cuts coming at Warton where the company makes and assembles Typhoon fighters and Hawk jet trainers.
Europe’s top defense company announced Oct. 10 that some 750 workers will be made redundant at Warton, northwest England, as its adjusts capacity to build fighters and trainers to match its order book.
BAE plans to produce 20 Typhoons this year, and that figure is expected to nearly halve to 11 in 2018.
The company confirmed it would be slowing final assembly rates but declined to detail how 2019 output might look. Financial analysts in the U.K. say as few as five jets could come off the Warton assembly line during that year.
The company is facing a dearth of orders for the moment, causing the proposed slowdown in what is one of its flagship programs.
BAE previously slowed production in 2015 to enable Warton assembly lines to be stretched ahead of expected export orders materializing.
A 72-aircraft order for Saudi Arabia has recently been completed, and BAE has jets for the British Royal Air Force and the Royal Air Force of Oman yet to be delivered.
The Typhoon program, however, received a massive and potentially crucial boost in late September when the Qatari and British governments announced they had signed a letter of intent for a deal to supply 24 Typhoons. The timing for the completion of any deal remains unclear for the moment.
BAE said Qatar was also in line to order six Hawk trainers as part of the possible Typhoon deal.
A deal with Qatar could be a short-term lifeline for the Hawk. Fulfilling the current Hawk order book for delivery of jets to Saudi Arabia and Oman will keep the jet trainer line alive into 2019, and a Qatar deal, depending on the timing, could take production into approximately 2021, according to a BAE spokeswomen.
Qatar is in the throes of a massive increase in air power capabilities, with Dassault Rafale and Boeing F-15 combat jets already due to join a force that currently has only six aging Alpha Jet trainers and a squadron’s worth of Mirage 2000 strike jets.
BAE is now conducting negotiations with Qatar over firming up the letter of intent; but unless the deal can be concluded quickly, it’s possible a gap may develop between the last of the current orders and the assembly of Qatar jets at Warton.
The BAE decision to reduce the workforce appears to confirm that a long awaited top-up order for 48 aircraft from the Royal Saudi Air Force is not expected in the immediate future.
“The timing of future orders is always uncertain, and to ensure production continuity and competitive costs between the completion of current contracts and anticipated new orders, we now plan to reduce Typhoon final assembly and Hawk production rates,” the company said.
Aside from assembly work, BAE will also deliver structures to Leonardo, the company’s Italian partner in the Eurofighter Typhoon joint venture, to fulfill an order from Kuwait for 28 jets secured by Italy. That work is expected to run until 2022.
Airbus is the other industrial partner in the program. All the companies have their own Typhoon assembly lines.
In total, nearly 1,400 people are expected to see their jobs axed across the military air business, with the Brough aerospace engineering site and Tornado strike jet support activities at the British Royal Air Force bases at Marham and Leeming also taking big hits.
Other cuts will see 340 jobs go in the maritime services sector, which is primarily responsible for running the Royal Navy base at Portsmouth, southern England, and maintaining Type 23 and Type 45 warships as well as 150 redundancies at the Applied Intelligence cybersecurity business.
“We are announcing actions at some of our UK sites to align our workforce capacity more closely with near-term demand and enhance our competitive position to secure new business,” the new CEO of BAE Systems, Charles Woodburn, said in a statement Tuesday.
The company employs 34,600 people in the U.K., of which nearly a third work at Warton and the nearby Samlesbury plant, which is largely geared toward producing structures for Lockheed Martin’s F-35 fighter.
Typhoon production, support and upgrade accounts for about 4,000 jobs at BAE.
It’s not all bad news in the air sector for BAE. F-35 work is on the rise, the company signed a deal with Turkey earlier in the year to help develop a future fighter for the government in Ankara. And the preliminary design and development phase of a future unmanned combat air system being pursued in a joint program with France could soon get the go-ahead.
In a separate move, Woodburn also announced a restructuring of the company’s U.K. businesses.
“The organisational changes we are announcing today accelerate our evolution to a more streamlined, de-layered organisation, with a sharper competitive edge and a renewed focus on technology. These actions will further strengthen our company as we deliver our strategy in a changing environment,” said Woodburn, who replaced Ian King as CEO on July 1.
Both the Platforms & Services UK and the P&S International management structures will dissolved to make way for stronger and more streamlined air and maritime businesses.
The principle change will be in the air sector where BAE is combining its Military Air & Information operations of Saudi Arabia, Australia and Oman, as well as BAE Systems’ interest in the MBDA missile joint venture with Airbus and Leonardo.
The company said in a statement that the revamped air sector will bring together international capabilities and expertise to more effectively compete for international export and collaboration opportunities.
BAE’s operations in the U.S. are not impacted by the restructuring or the job losses, said a company spokesman.
The restructuring has also seen a shuffle of some personnel at the top of the company. Nigel Whitehead takes up the new role of chief technology officer, having previously headed up the company’s programs and support business in the U.K. Chris Boardman, currently the managing director of the Military Air & Information business, will be appointed as group managing director for air and joins the company’s executive committee.