BAE may yet get work

Dec 12 2008 by Graeme King, The Journal

A DELAY to a £16bn defence programme to build new military vehicles could turn out to be good news for the BAE Systems factory in Newcastle – though there is said to be a short-term risk of job losses.

Defence Secretary John Hutton said yesterday the FRES (Future Rapid Effects System) programme was to be delayed, potentially by years, after main contractor General Dynamics from the US failed to reach a deal with the Ministry of Defence to produce the first batch of vehicles, and has been dropped by the MoD. BAE Systems, which operates the former Vickers factory on Scotswood Road in Newcastle with around 650 staff, has been competing to win work on the FRES programme and has invested in its facilities to meet the standards expected by the MoD.

Now Mr Hutton has decided to jettison BAE’s big rival General Dynamics from the process, it is possible BAE Systems could yet win work on FRES – but the programme as a whole is set to be substantially delayed while Mr Hutton’s department focuses its attentions on short-term goals of kitting out soldiers in Afghanistan and Iraq.