BAE Systems cuts 620 jobs as Newcastle factory shuts

BAE Systems signalled the end of an era yesterday as it called time on the historic Vickers Armstrong factory in Newcastle after 165 years of arms manufacture.

The closure of the Scotswood Road site, which made Chieftain tanks in the Second World War and developed the first "recoil booster" machine-gun, at the end of next year will result in the loss of 330 jobs.

It is part of a broader redundancy programme BAE announced yesterday that will see a total of 620 UK positions shed, with the group's munition's plants in the North-east and South Wales bearing most of the remaining job cuts.

Yesterday's redundancies are, in turn, part of a much wider cost-cutting drive as BAE reels from major military spending cuts in the UK and the US, the ending of the Iraq war and the winding down of the conflict in Afghanistan.

Furthermore, the group is reviewing its shipbuilding operation that is expected to lead to the closure of its Portsmouth dockyard and a further 1,500 job losses.

Yesterday's cuts focus on BAE's land operations and were prompted by rapidly declining demand for the Terrier tank.

Charlie Blakemore, BAE's managing director, said: "We need to adapt to very challenging market conditions and further reduce our overheads to drive better value for our customers and increase our competitiveness in the export market."

The Vickers site, which BAE acquired in 2004, is only a pale imitation of its heyday incarnation last century when it once employed 25,000 working in its armament factories and shipyards.

Nick Forbes, the leader of Newcastle City Council, bemoaned the end of an era, he said: "This is devastating news for the city and the region, and a tragedy for the 330 workers and their families."