BAE factory on banks of Tyne to close after 165 years of weapons manufacture

The Vickers site once employed 25,000 and stretched along three miles of waterfront

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. In September, BAE announced 3,000 UK job losses in its "air" business, although it has since said it has been able to reduce that number – but not by how much.

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. At its peak in the 1950s, the Vickers plants – and the industry that grew up around it – was so vast that it stretched along three miles of the river Tyne, once boasting 44 pubs to quench the thirst of their armies of employees. Many of the pubs – such as The Hydraulic Crane and the Forge Hammer Inn – were named after whichever part of the Vickers factory they were opposite.

Although Scotswood Road has been in decline for decades, the closure of the remaining business represents a huge blow for the area and a further example of Britain's long-term industrial decline.

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

In a rare example of good job news at BAE, the group has been able to save 218 jobs at its Brough plant in East Yorkshire after recently signing a deal to supply Saudi Arabia with 22 Hawk training jets.

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