BAE to shed nearly 600 jobs in wake of failed bid for jet contract

BAE Systems will lay off 584 workers in the UK after the defence giant lost a contract to supply training jets to the United Arab Emirates.

Most of the redundancies – 450 – will affect its Brough site near Hull, where the Hawk aircraft, the jet used by the Royal Air Force's Red Arrows, is built. The remaining 134 will come at Woodford, near Manchester. The unions reacted with surprise to the cuts. Keith Hazlewood, the GMB union's national secretary, said: "This announcement is a devastating blow for the company, the community of an east Yorkshire village and a further blow to UK manufacturing."

A BAE spokesman said the company was in talks with unions about programmes to retrain displaced workers and find new positions in different departments or cities where the company operates.

The majority of the cuts are the result of events six months ago, when BAE was eliminated from the bidding for a contract to supply 35 Hawk jets to the UAE. The company is in the midst of building 66 aircraft for the Indian air force and 28 for the RAF.

The UAE contract would have secured the jobs at Brough. BAE is one of the largest employers in the area. The job losses are equal to about 1 per cent of the firm's UK workforce.

Bernie Hamilton, of the union Unite, said: "Sadly, the future for the skilled workers that built these state-of-the-art jets is now uncertain. Unite will resist any compulsory redundancies and will be working with management at both sites to find alternatives, including re-skilling, transfers to other operations and work packages from other projects."

The reductions at Woodford, which total nearly a fifth of the site's workforce, are related to the end of the work cycle, where BAE's regional aircraft are built. The move came as the result of a review into the engineering capabilities within the Military Air Solutions unit. The company said: "As a result, it was announced in August 2007 that a managed run-down of engineering posts at Woodford would take place between 2008 and 2010. Unfortunately, we see no opportunity for a significant transfer of engineering work packages to the Woodford site."

Other project work, such as on the Nimrod patrol aircraft, will be unaffected by the cuts. The company's Military Air Solutions unit includes several key projects, including the Typhoon and Joint Strike Fighter jet programmes, as well as Nimrod.

For the first time last year, more than half of BAE's turnover was derived from business in America. The company spokesman denied that the reductions were part of an effort to move more production out of the relatively high-cost UK to cheaper, or dollar-denominated, jurisdictions.

BAE hopes that expected auctions for training jets in Singapore and Greece will mean more work for those on the Hawk programme.