Select Committee on Trade and Industry Appendices to the Minutes of Evidence


APPENDIX 5

Memorandum submitted by Warton Unit Trade Unions

INTRODUCTION

  This written evidence is submitted on behalf of the workers at BAE SYSTEMS Warton Unit, comprising of Warton and Samlesbury sites, in Lancashire.

  It is compiled by the Manual and Staff Trade Unions at Warton Unit who represent 10,000 employees.

  This unit is involved in the following projects, Typhoon (Eurofighter), Hawk, Harrier, Nimrod and on the civil side, Airbus.

1.  BAE SYSTEMS

  Formed from the merger of British Aerospace and Marconi Electronic Systems making the new Company one of the world's leading systems, defence and aerospace Companies.

  In September 2000 the Company declared record half-year profits, up 48 per cent to £507 million and a strong order book of £37 billion (see appendix 1[1]).

2.  Manufacturing Strategy

  Prior to the merger, Warton Unit was part of Military Aircraft and Aerostructures (MA&A) which comprised the North West sites of Warton, Samlesbury and Chadderton, Brough from the North East, Farnborough and Dunsfold (South) and Preswick (Scotland).

  MA&A manufacturing strategy was to concentrate on high technology work and to withdraw from lower tier manufacturing. All work has been identified from tiers 1 to 5. Tier 1 work is flight line/final assembly with tier 5 being simple detail work. The Company intends to exit tiers 4 & 5 with a lot of this work going abroad.

  Of the 6,500 direct manufacturing jobs across the sites, more than half would be affected with a significant knock on effect on engineering support jobs.

  When the merger happened MA&A was split up, Dunsfold site was closed with the loss of 700 jobs.

  There have been two redundancy programmes in the last two years, which have resulted in:

    —  600 job losses at Chadderton;

    —  1,000 job losses at Brough; and

    —  1,500 job losses at Warton Unit.

  During this time, work has been outsourced to Poland, Romania, Malaysia, China and South Africa from these sites.

  We understand the argument for offset work to win orders but we believe much of the work being outsourced is on a cost basis to low wage economies to the detriment of UK jobs.

  The BAE SYSTEMS Manufacturing Strategy Group is now working on a 10-year plan and we are very concerned we will see the closure of further sites with significant job losses (see appendix 2[2]).

3.  Decline in Work Force Numbers

  At Warton Unit we have had two redundancy programmes within the past two years losing 1,500 people.

  In the manual/clerical areas we had 3,300 workers in 1997. Today this number is less than 2,500—a 25 per cent reduction.

  At one time Warton unit used to recruit 120 apprentices annually. This number has decreased to 60 over recent years and next years intake is 40—a 33 per cent reduction with a minority being craft Apprentices.

4.  Tooling Manufacture

  Large-scale investment has taken place at Samlesbury in the high tech tooling facility.

  Originally only 18 per cent of tooling work was to be done at Samlesbury with 82 per cent to be subcontracted but we believe now our share is more like 10 per cent.

  Some two years ago approximately 50 toolmakers were recruited taking the total tool room number up to about 140.

  During the last two redundancy programmes toolmakers were allowed to take voluntary redundancy and 40 have been transferred onto manufacturing with the number now down to 65 toolmakers.

  This is due to the significant amount of tooling work (mostly Typhoon) being subcontracted abroad to Poland (see appendix 3[3]). This equates to approximately 60 men's work for year 2000.

  We are also very concerned that tooling work is being subcontracted to companies like Hyde tooling (Lancashire) where we believe much of this is being subcontracted to Eastern Europe.

  We are reliably informed that there is no more capacity for tooling work going to Poland and the Company and tooling subcontractors are now sending work into Romania.

  A further concern is the amount of Typhoon tooling work going to Poland where on its return identity of manufacture labels are removed!

5.  Airbus

  Samlesbury has relied heavily on Airbus work, where up to recent times 70 per cent of Samlesbury's work was Airbus.


  The civil work was vital to our sites during the development of the Eurofighter.

  As you are aware substantial Government grant aid of £540 million was given to BAE SYSTEMS towards the development of A3XX (A380).

  BAE SYSTEMS claims 22,000 UK jobs (8,000 in BAE SYSTEMS) will be created, but we believe no A3XX work will go to the BAE SYSTEM sites who already have expertise on Airbus ie Samlesbury, Brough, Prestwick and Chadderton. There are currently 3,000 Airbus jobs on these sites.

  Profit from military Aircraft sites like Samlesbury, Brough and Chadderton kept the civil sites on Broughton (Wales) and Filton (Bristol) viable during their difficult years.

  We believe the priority has to be to protect existing sites and jobs before creating new jobs.

  BAE SYSTEMS must be pressed into influencing decisions at Airbus corporate level to put work into other BAE SYSTEMS sites that desperately need to sustain jobs and skills across the UK.

  Airbus work is being sent to China and Malaysia while we have jobs at risk across BAE SYSTEMS sites (see appendix 4[4]).

6.  A400M

  The Government recently awarded contracts to BAE SYSTEMS for the A400M (Military Transporter).

  Samlesbury and other Military sites were given assurances by the Company, when we were campaigning for the project, that we would share in this work.

  We have concerns that most of this project will go to Airbus and subcontractors and little if any to Military sites.

  The Company needs to be asked at which BAE SYSTEMS sites will the A400M be manufactured.

7.  "Partnerships"

  We are concerned that there is collusion between BAE SYSTEMS and Aerospace contractors to set up companies in Eastern Europe which will destroy our manufacturing capability.

  Managers who were made redundant in the last round, or who volunteered for redundancy have nearly all secured Management positions with local Aerospace subcontractors.

  These people had a lot of commercial knowledge of our sites and it is now being used to undermine jobs in Warton Unit. This has happened with BAE SYSTEMS awareness.

  This kind of ethics would not be allowed in most businesses, only it suits BAE SYSTEMS motives to dismantle its manufacturing and outsource.

7 January 2001




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