Smiths Group says defence cuts will hit its jobs too

Government austerity measures around the world continued to take their toll on Britain's manufacturing sector yesterday as Smiths Group said its key medical, weapons detection and military communications divisions were all being squeezed by spending cuts.

A day after BAE, the aerospace and defence group, confirmed it would axe 3,000 positions in the UK, Smiths said it would cut jobs and close plants in its so-called detection unit as it seeks to cut £40m from its annual costs by 2014.

The detection unit, which makes a range of equipment from x-ray scanners at airports to biological weapon and drug detection devices, employs 2,500 people globally, with about 200 people in the UK at its plant in Watford. The company would not give further details about where the job cuts and site closures would occur.

Philip Bowman, chief executive, outlined the planned cost savings as the group announced a 12 per cent rise in pre-tax profit to £486m.