BAe to cut 1,350 missile jobs in efficiency drive

British Aerospace's missiles business is cutting up to 1,350 jobs in an efficiency drive, but the company denied it had anything to do with an expected merger with France's Matra.

The jobs will go over the next two years at three sites, bringing the number of redundancies made at the operation to more than 17,000 in the past eight years.

BAe, whose merger with Matra is expected to be announced within weeks, was thought to have agreed to streamline its Dynamics division to meet productivity levels at the French company.

But a spokesman said the redundancies were simply a reflection of the current weak order book at Dynamics. "Nothing has been agreed on Matra. But whatever the outcome, we would have had to make these cuts anyway.''

The job losses, many of which are likely to be compulsory, involve 660 cuts at Stevenage, Herts, leaving 1,690 employees. Another 570 will go at Lostock, Bolton, leaving 370, and 120 will go at Bristol, leaving 420.

Roger Hawksworth, managing director of Dynamics, said: "We regret the need for these actions but they are essential to enable us to be competitive in bidding to fulfil new requirements in the UK and to be able to sell our current product range in export markets."

About half the redundancies will take place this year, with the rest in 1996. However, the timing and total will depend on new orders, and will be reviewed at the end of this year.

BAe, whose chief executive is Dick Evans, said: "We will look for volunteers in order to minimise the need for compulsory redundancies. However, it must be recognised that it is unlikely volunteers alone will achieve the levels of reduction necessary."

A number of big orders are reaching the end of their production cycle, including the Asraam short-range missile. Several new UK and overseas contracts are also expected to be decided or tendered this year, but competition will be fierce.

Less than two months ago the Lostock factory was the setting for the official unveiling of the world's most advanced air defence system, the £1.9bn Rapier 2000, which was the biggest development and production programme of its kind ever undertaken by the Ministry of Defence.

At the time Roger Freeman, the defence procurement minister, said the Government had a role to play in maintaining the research and development capability of the defence industry, but warned that the "peace dividend'' meant painful decisions.

The European defence industry is being forced into mergers and joint ventures as it comes to terms with the decline in military spending. Derek Fatchett, Labour's defence spokesman, said: "This continuing haemorrhage of highly skilled jobs shows the deep structural problems facing the defence industries. The BAe announcement is yet another reason why the Government should abandon its indifference to the problems of this sector.''

BAe has been negotiating a merger of Dynamics with Matra for three years, and a deal is said to be weeks away, rather than months.