THE conflict in Afghanistan and continuing troubles in the Middle East have seen ammunition production at BAE Systems factories in the North East more than double in the last few years.
The company says it is pushing out increased volumes of artillery, mortar and tank ammunition casings from its sites in the region despite it missing out on a £1bn contract to make British Army Fres Scout vehicles.
Workers in the region have faced upheaval, with job losses and news of a factory move to contend with in recent months. In March last year, it said it was cutting 217 of the 650 jobs in Newcastle, and it added another 100 would be cut once it moves work from Tyneside to Telford in Shropshire.
Operations in Birtley will also be shifted early next year to a new site in Washington. It is also in the early stages of manufacturing the Terrier combat vehicle.
While the company is still pressing ahead with job cuts at a gradual rate, as contracts finish and the £75m Washington move progresses, munitions managing director Charlie Blakemore said moves such as the 2008 MASS deal with the Ministry of Defence were helping the company develop a more efficient relationship with a major supplier.
Blakemore said: “Thanks to the long-term partnering arrangement we have with the MoD, now approaching its third anniversary, we are able to work together with them and our supply base, so that we can jointly plan ahead, make efficiencies and give our troops the best possible service. The transformation programme will improve product quality, responsiveness and employee safety further.”
BAE announced yesterday that its revenues for the six months to June 30 fell 13% from £10.5bn to £9.2bn, while operating profit was down £849m to £757m, and the order book fell from £43.4bn to £36.9bn.
Profits in the land and armaments division fell by nearly half, from £316m to £180m, while areas such as air, intelligence and maritime operations fell from £316m to £285m.
BAE has cut more than 15,000 jobs in the last couple of years, but indicated it was positive it could succeed despite the cuts and uncertainty in the sector, partly aided by a £206m, five-year programme to upgrade some sites into state-of-the-art facilities.
BAE said the performance in the recent period was related to the lull created by the Government’s strategic defence review, and increased costs in the completion of the Omani Offshore Patrol Vessel programme.
It declared a 7.1% increase in the dividend to 7.5p, and announced it was continuing to buy-back its shares with a new programme worth up to £500m.
