BAE Systems defends review of Portsmouth operations

Posted on 18 Jan 2012

BAE Systems has denied it plans to close its site in Portsmouth, saying that it is merely reviewing its operations across the whole country in an effort to become more efficient.

The firm employed management consultancy LEK Consulting to carry out an analytical study of the businesses in Portsmouth and two other sites in Govan and Scotstoun, both near Glasgow, in order to drive down overall costs.

After concern was  voiced by employees at Portsmouth over the future of their jobs, a BAE Systems spokesperson defended the company’s review, commenting that it was a “routine activity,” and part of “normal business planning activity.”

Some of the 7,000 employees at the Portsmouth site said they were worried that redundancies will be made when the work on the new Royal Navy aircraft carriers comes to a close at the end of the decade.

One source pointed out that BAE Systems is designing a new frigate – the Type 26 Global Combat Ship. This will guarantee work for Portsmouth employees up until around 2030.

BAE predicts that one frigate will be built every year from 2020. BAE Systems plans to export the new frigate to nations that are expanding their naval capabilities and there is potential for sales to the Royal Navy.

A source at BAE Systems told The Manufacturer that the Government has been very helpful in supporting the company in its marketing efforts, particularly when trying to sell to emerging economies such as India and Brazil.

As well as the design and production of the new frigates, the firm signed a £133m contract with the Brazilian Navy to build three ocean patrol vessels earlier this month – one of which is to be built in Portsmouth. The other two will be built in Govan and Scotstoun. The contract is estimated to sustain around 100 jobs at the Portsmouth site.

Commercial director of BAE Systems’ maritime business Nigel Stewart said: “[The £133m contract] will support up to 100 jobs at our facility in Portsmouth Naval Base over the next 15 months, as we prepare the ships for Brazil.”

One possible point of contention regarding BAE Systems’ business in the UK is the upcoming Scottish referendum. Commentators have speculated that BAE Systems is likely to build its ships in Portsmouth if Scotland becomes an independent nation.