Fall-out from terror attacks costs 2,000 jobs

The economic impact of the terrorist attacks on the United States continued to hit British industry with almost 2,000 jobs being cut.

Aerospace giant BAE Systems dealt a huge blow to the aircraft business by unveiling plans to axe 1,700 jobs, while tour operator Airtours said it had cut 1,600 posts, including 200 in this country, in direct response to the September 11 attacks.

BAE Systems said the jobs would go in its regional jets business because of a downturn following the attack on the World Trade Centre.

The cuts, which will hit factories in Manchester, Preston, Bristol and Prestwick in Scotland, were described as "devastating" by union leaders.

BAE Systems chief executive John Weston said the company had completed a detailed assessment of the likely impact on its business of the "severe downturn" in the commercial aerospace market.

"Since September the trading outlook in these markets has changed substantially," he said.

Profit expectations for the Airbus, which BAE helps build, had been reduced significantly next year, and the outlook for regional aircraft had "deteriorated sharply", said Mr Weston.

"Regrettably it has been concluded that our regional jet business is no longer viable in this environment."

BAE said it would continue to build four regional jets already in production but was scrapping a programme to build a successor to the current generation of such aircraft.

The company already had orders for its new RJX regional jets from airlines including British European.

Development work has been continuing and the aircraft was due to come into service next April.

The RJX had new design features, new engines and new avionics, and the closure of the programme will cost BAE £400 million in restructuring, redundancy and other costs.

The RJX was due to replace the RJ, which itself was a successor to the 146, first built in the 1970s.

BAE said a total of 993 jobs would be cut at Woodford, 299 at Chadderton, 219 at Prestwick in Ayrshire, 140 at Samlesbury, near Preston, and 18 at Filton, near Bristol.

Volunteers would be sought, but BAE said it could not rule out compulsory redundancies.

Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said: "This is a devastating blow for the country's aerospace industry. We will be consulting urgently with BAE to see if we can reduce the number of job losses."

Industry minister Brian Wilson said he hoped the eventual number of redundancies could be "significantly reduced" through redeployment within BAE Systems and at other companies.

"We will work closely with the company in order to maximise the alternative opportunities for those employees who are losing their jobs," he said.

Roger Lyons, general secretary of the Manufacturing Science and Finance union, said the announcement, which came just hours before the Chancellor delivers his pre–Budget speech, showed there was a "two tier" economy in the UK.

"There are parts of the economy being supported by the Government and parts that are not. The regional jet programme has been hit hard by September 11 and we are calling on the Government to support this vital manufacturing business to save jobs."

Airtours – which is to rename itself MyTravel – said it had reduced capacity and costs in the wake of the September 11 attacks, and had to make some "difficult decisions regarding redundancies".

It had cut 1,600 jobs – just over 50% of which were in the US, while 200 were in the UK and the rest in Europe – since September 11.

This was in addition to 1,200 staff reductions made last year as a result of efficiency programmes and reorganisations.

Chief executive Tim Byrne said job cutting: "It was absolutely directly to do with September 11. We felt it was a prudent and necessary measure."