Military Air & Information – News Online
Military Air & Information – Notice 08/011 Potential Job Losses
With our workload for the UK Ministry of Defence reducing, partially driven by decisions made in last year’s Strategic Defence & Security Review (SDSR), we are more dependent on international work than ever before. However, in the wake of the worldwide economic downturn, all our customers are facing huge pressures on their budgets and cost has increasingly become a priority. Our businesses need to rise to this challenge to survive.
We need to put MAI into the right shape for the challenges we will face now and in the future. Transforming MAI will not be easy and we will end up with a business that is smaller but it will be profitable and sustainable. With a clear focus on: combat air (F-35, Typhoon and Unmanned Air Systems); and information, training and support services; we will have a business with a sound future.
A changing workload
Some of our major programmes have seen significant changes. On Typhoon, the four partner nations have agreed to slow production to help ease their cost pressures. Whilst this will help stretch our production schedule until we receive anticipated export contracts, it does reduce the workload at a number of our sites.
Pressure on the US Defence budget and top level programme changes mean the increase in F-35 production rates will be slower than originally planned, again impacting on our expected workload.
These programme changes, along with the impact of the SDSR, the completion of UK Hawk AJT production and a reducing workload across a number of Defence Information projects, means that we don’t have enough work to maintain our workforce at today’s level.
Cost Reduction
Over recent years, the Company has invested in programmes and sites to sustain them until we received anticipated orders – this position has now become untenable. Failing to act now will impact on our ability to win new business, so we can’t afford to delay making some tough decisions.
Over the last nine months through our Cost Reduction Programme, we have identified opportunities to save money, particularly in our non-labour budget. This has included working with external suppliers on their costs, working with our colleagues in Head Office on reducing their costs, examining our IT spend, re-evaluating our planned investments and challenging all forms of discretionary spend. Despite this action, our overheads have not reduced in line with our workload. We therefore believe we need to reduce the number of roles that support the business, whether they are linked to the affected programmes or not.
Action is needed
Regrettably, we have today begun consultation regarding 2676 potential job losses across MAI affecting a number of our sites and RAF bases on which we have a presence.
As part of this, we will start consultation on a proposal to end manufacturing at Brough with the aim of consolidating our manufacturing capability on fewer sites.
The potential job losses are as follows:
• 899 at Brough
• 565 at Samlesbury
• 822 at Warton (Including Preston)
• 51 at Christchurch
• 9 at Farnborough
• 19 at Filton
• 81 at Frimley
• 35 at Hillend
• 7 at Malvern
• 19 at New Malden
• 132 at Yeovil
• 33 in other UK locations (Including RAF Bases)
• 4 in overseas locations
We appreciate this is difficult news and we will work closely with employees and their representatives to explore ways of mitigating the potential job losses, a process we have already started.
We will do everything we can to support MAI employees in line with the BAE Systems ‘Protection of jobs and handling rationalisation’ document. The teams leading the consultation have my full support in seeking mitigation opportunities across MAI and other BAE Systems businesses.
At this time, employees are not required to take any specific action. We will continue to keep you informed of progress and of the next steps.
We understand that this announcement creates uncertainty and concern but we believe that by taking actions now we will have a sustainable business going forward.
Chris Boardman
Managing Director, Military Air & Information