Workers hit by falling weapon market

Missiles are getting more sophisticated but there are fewer aeroplanes to carry them, writes Christopher Bellamy, Defence Correspondent.

That, a general shortage of cash in the defence field, and the current shortage of production work are behind the reduction in jobs in the dynamics division of British Aerospace Defence, which builds guided missiles.

Defence spending in the West has fallen dramatically over the past five years but is levelling out, with the emphasis on more sophisticated weapons.

As far as jobs are concerned, quality does not compensate for reductions in quantity as export markets for the more expensive weapons shrink.

Of the 1,350 job reductions scheduled over the next two years, Lostock, the manufacturing centre, will be hardest hit, with the workforce cut by 570 people to 370.

British Aerospace expects to be involved in a number of future missile programmes. They are worth a lot of money - £500m for the conventionally armed stand-off missile (CASOM), a fast air-launched cruise missile to attack ground targets for the RAF, and another £500m for the air-launched anti-armour weapon. But they are small compared with a £1.9bn project like the Rapier 2000, due to enter service later this year, which employed several hundred engineers.

Research and development are expensive but employ fewer people.

In November last year BAe received the contract for an 18-month study into the feasibility of an anti-ballistic missile system - a mini-Star Wars - to shield the UK against a small -scale attack with missiles.

If such a system were ordered it could mean lucrative work for British and European industry, on radars, satellites, and missiles launched from land, sea and air.

But this is all far in the future. The study itself, due to report in the middle of next year, is only worth a few million pounds and involves British, French and US scientists.

Another possible project for BAe is the long-range Trigat - the missile system for the Tiger attack helicopter, one of the candidates vying to meet the British Army's requirement for 91 "flying tanks". However, the army might go for the US Apache helicopter with hellfire missiles instead.

Looking ahead, BAe could also find itself producing the active Skyflash "fire and forget" air-to-air missile, the anti-aircraft missile system for the new multinational frigate, and, in time, the future medium-range air-to-air missile. But none of these is likely to be in production much before 2000.