BAE to close three sites and cut 500 jobs in vehicles units

BAE Systems is closing three UK sites and cutting 500 jobs following the postponement of the Government's armoured vehicle programme and the reduction of British involvement in Iraq and Afghanistan.

In an accident of timing, the defence contractor announced the plans yesterday just as the last UK troops were formally withdrawn from Iraq.

The cuts, including highly skilled engineering jobs, are all in BAE's Global Combat Systems (GCS) division, which employs more than 1,800 people in its vehicles and weapons unit. The business has already lost 200 jobs after the Government's December decision to defer its Future Rapid Effects System utility vehicles programme, in which the company had a major role.

BAE is closing sites in Guildford, Leeds and Telford, with the loss of 330 staff. Another 90 will go in Barrow, 50 in Newcastle and seven in Leicester. A further 30 posts will be phased out through efficiency measures put in place over the next 18 months.

David Allott, the managing director of the GCS division, said: "While we clearly regret having to take this step, our forecast UK order intake has reduced and we have to match the size of our business appropriately to the projected nature and volume of workload."

The trade union Unite raised concerns as to the UK's continuing industrial capacity. Bernie Hamilton, from Unite, said: "The Government must now make the right and speedy decision on the new Scout Vehicles, which must be designed, built and maintained in the UK by UK workers, to help underpin what remains of the UK capability and business."