With the British economy struggling for growth, defence company BAE Systems has now confirmed 2,942 job losses amongst its UK workforce as a further blow to the unemployment figures. These job losses which are aimed at reducing costs and maintaining the competitiveness of the company in international markets, have been blamed on government cuts, particularly in the budget of the MOD, with examples quoted such as the scrapping of the Nimrod air reconnaissance programme and the accelerated retirement of the Harrier vertical take-off aircraft. However, BAE Systems is also facing up to similar shrinkage of defence budgets in international markets and the cuts will , therefore, mainly affect its military aircraft division as a result of nations involved in the Typhoon fighter programme ? the UK, Germany, Italy and Spain – cutting production rates.
Union officials have of course blamed the government cuts in the defence budget and described the job losses as a hammer blow to manufacturing, whilst the Business Secretary, Vince Cable, and his officials are trying to bring together the company, local authorities and local enterprise partnerships to ensure all possible support for those affected. The Shadow Defence Minister, Jim Murphy, is also demanding a fast response from ministers with a clear plan for action.
Now BAE Systems is a hi-tech manufacturing company in a market segment where the UK holds a significant competitive advantage. The government is also trying to rebalance the economy away from an over-reliance on financial services and towards e.g. manufacturing. In addition, once the highly skilled people in these jobs are let go the UK economy will be losing a precious resource of know-how for the future. Germany is much more protective of its key manufacturing resources and, during the financial downturn, Government, unions and employers came together to preserve jobs and maintain the skills base by short time working with the costs shared between government and employers. The UK should take a lesson from Germany which sets the benchmark for competitive manufacturing of high quality products.