AgustaWestland cuts 1,000 UK jobs as flow of orders slows

Almost 1,000 UK jobs were axed yesterday by AgustaWestland, the helicopter joint venture between GKN and Finmeccanica of Italy, because of a shortage of military orders.

The company announced that 950 jobs – which is almost a fifth of its UK workforce – would go at two sites in the West Country. There will be 600 redundancies at the main helicopter production site in Yeovil and a further 350 at Weston-super-Mare, where a customer support centre is being closed.

A spokesman for GKN warned that there would be a "significant" number of compulsory redundancies and blamed the cutbacks on the completion of two orders for the Ministry of Defence. Even though the company has a forward order book worth £4.5bn, Yeovil will be short of work until export contracts for the EH101 helicopter begin next year.

Yeovil is about to complete an order for 66 EH101s for the Royal Navy and Royal Air Force and a separate contract to build 67 Apache attack helicopters for the British Army. Two export orders worth £450m for about 30 EH101 search and rescue helicopters ordered by Portugal and Denmark will not start until next year.

AgustaWestland is also bidding to supply the MoD with a new battlefield light utility helicopter to replace the existing Lynx and a new EH101 to replace the Navy's Sea King and Puma fleet. Together, the two programmes could involve up to 180 helicopters.

A GKN spokesman denied that UK workers were being forced to bear the brunt of the cutbacks because it was easier and cheaper to lay staff off here than in Italy. "Agusta took a lot of pain before the joint venture was set up while Westland was actually recruiting staff to cope with the EH101 and Apache orders," the spokesman said.

GKN will take a charge of £11m to cover the cost of the redundancies. This represents half the £22m costs being borne by AgustaWestland.