Nimrod axe will cause production cuts, says BAE
THE decision to axe the Nimrod spy plane programme is likely to lead to a “near term” reduction in production activity at BAE Systems.
In an interim management update, covering July 1 to October 20, the defence giant delivered a brief outlook on the implications of the Goverment’s defence review.
Unions claim the Government’s decision to end the £3.6bn Nimrod programme will lead to the early closure of BAE’s factory at Woodford near Stockport.
BAE, which announced in September 2009 that the Woodford site would close by 2012, said: “The decision not to take the Nimrod MRA4 aircraft into service may result in some near term reduction of residual production activity on the programme and elimination of longer term support opportunity.
“The group will now work with government to agree commercial terms resulting from changes to the Nimrod programme.”
Originally the Nimrod contract was signed in 1996 for a total of 21 planes. This has since been scaled back to nine. Two of the giant spy planes have been completed, but will now not enter service.
Around 500 BAE staff work at Woodford – which made 7,000 Lancaster Bombers during World War II – while a similar number are working there as contractors. Another 400 people are involved in project management of Nimrod at BAE Systems’ site at Warton in Lancashire.
BAE added that changes from the defence review are expected to result in “some reduction in growth for 2010”. It said the outlook for 2010 remains subject to commercial discussions regarding cancellation of the Trinidad and Tobago offshore patrol vessel programme. It anticipates this could lead to a charge of up to £150m in its 2010 accounts.
