Fears grow of shift of BAe arm to US: 1,300 jobs at risk at Chester and Hatfield if corporate jet business is relocated

FEARS ARE growing that British Aerospace is to run down its corporate jet business in the UK and transfer it to the US, starting with up to 300 job losses and the closure of production facilities next week at Chester, North Wales.

A total of 1,300 jobs would be at risk at Chester and Hatfield, Hertfordshire, if BAe relocated the entire division, which makes the BAe 125 range of corporate jets.

BAe is expected to announce next week that it is cutting the workforce at Chester employed on corporate jet production from 900 people to 600,

by closing down the completion line and transferring it to Little Rock,

Arkansas, President Clinton's former powerbase.

But there is concern over the long-term future of the 600 workers involved in manufacturing at Chester and the 400-strong design and marketing team based at Hatfield.

Last year BAe attempted unsuccessfully to sell the profitable corporate jet business, valued at about pounds 300m, to the US corporation Raytheon, which makes Beech corporate aircraft, but was unable to agree terms.

In recent days there have been reports, however, that Raytheon has renewed its interest and that Beech would like to add to its range, which currently consists of the Beech 400 business jet and a variety of turboprop aircraft.

BAe recently announced management changes in its corporate jets division that resulted in the posts of chairman and chief executive going to two Americans - Robert Kirk and Bill Boisture.

In addition it has gradually been closing down its US head office in Washington and transferring personnel to Little Rock. The Arkansas facility already has a completion line specialising in painting and fitting out the interior of the basic 125 jet.

Transferring production to the US would cut out BAe's exposure to currency risks since its manufacturing costs would be in the currency in which all civil aircraft are sold, the dollar.

BAe has sold more than 800 business jets in the past 30 years. The two current versions are the 125-800, a six- to ten-seater introduced in 1985 and the eight-seat BAe 1000, which has a range of 3,635 miles and has been in service for two years.

Traditionally, its strongest markets have been the US but of the 30 or so business jets sold last year only three were bought by North American customers.

No one was available for comment last night at BAe's corporate jet headquarters in Hatfield and a BAe spokeswoman for the Chester site, which also manufactures Airbus wings, said she could not comment.