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BAE Systems sheds jets, jobs
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November 27, 2001: 4:03 a.m. ET
European defence company to end jet production, Airbus delivery target lowered
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LONDON (CNN) - BAE Systems plans to shed hundreds of jobs as it closes its regional jet production after a slump in sales following the September 11 terror attacks.
Europe's biggest defence company, which owns 20 percent of the world's second-largest aircraft maker Airbus Industries, said on Tuesday 1,667 jobs would be lost. The job losses and closure of plants will cost £250 million ($352 million).
BAE, which is a partner in the manufacture of the Eurofighter jet and makes wings for Airbus, also warned commercial airline deliveries would fall to 300 aircraft in 2002 from 320 this year. On Monday, Airbus's bitter U.S. rival Boeing slashed it delivery target to 350-400 aircraft in 2002 from an expected 522 this year.
Boeing has announced plans to cut up to 30,000 jobs in response to the global economic slowdown and the terrorist attacks on the U.S. Boeing Chairman Phil Condit predicted the current travel slump would cost the company about 1,000 jet deliveries over the next several years. Airlines have seen passenger numbers drop by about a third since the attacks.
In January, BAE issued a profits warning and one-off losses on its Nimrod maritime patrol aircraft contract. The company said the implications of September 11 are expected to have a "significant impact" on its civil aviation business and would delay growth that was expected to resume next year with the start of Eurofighter combat jets.
"Since September, the trading outlook in these (commercial aerospace) markets has changed substantially," said chief executive John Weston. "In particular, operating profit expectations for Airbus next year have been reduced significantly and the outlook for regional aircraft has deteriorated sharply."
"Regrettably our regional jet business is no longer viable in this environment," he added.
The regional jet business manufactures about 16 RJ-100 Avro series aircraft, formerly the BAE 146, a year. In 2000, the regional aircraft contributed £10 million to BAE's operating profit, the company said.
The company also said it would restructure its other aerospace activities at a cost of £150 million. Its aerostructures, avionics and North America activities will see their operating results reduced by about £25 million next year.
BAE's stock rose 0.5 percent to 327 pence in early London trading on Tuesday. The company's stock has fallen about 14 percent this year and plunged more than 25 percent t o 275.5 pence after its January profit warning. 
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