February 22, 2008 -- In association with RBS THE BAE Systems ammunition factory in Gateshead is to benefit from a £120m investment in the group munitions business. The investment in three UK sites follows a deal struck by BAE with the Ministry of Defence for continued supply of bullets and bombs to soldiers.

Workers at Birtley will increase from the present 325 as BAE switches to new machinery, but will fall later as it relies more on automation, though the group has not said by how many.

Meanwhile at BAE Systems Land Systems tank factory in Scotswood Road, Newcastle, the prospects of the 660 employees ride on the MoD finalising plans for the Fres (Future Rapid Effects System) programme of new military vehicles.

BAE has announced a £20m "transformation" of its land systems business in anticipation of Fres work, but the Government is yet to give a timetable for commissioning vehicles.

Pressure on public finances is said to have led Prime Minister Gordon Brown and Defence Procurement Minister Baroness Taylor to re-examine defence expenditure, but BAE still expects a Fres decision. The group - pursuing the Fres "vehicle integrator" role - is said to favour the French vehicle VBCI, rather than the US Piranha from General Dynamics, for the MoD.

The BAE update yesterday came as the group reported strong financial annual performance, with global sales up 14% to £15.7bn and profits up 22% to £1.47bn. The land systems and armament division, taking in the Birtley and Scotswood Road plants, performed particularly well, with sales up 67% and profits up 86%.

Land Systems is said to have performed exceptionally well in 2007, increasing order intake more than 50%, led by urgent work to protect vehicles in Iraq and Afghanistan, and US demand for mine-protected armoured vehicles. MD of weapons and vehicles Jim Imrie said: "In 2007 we responded to more than 90 UK urgent operational requirements, largely to fit extra armour and other protection systems to UK forces' vehicles in response to new threats.

"In many cases our people worked round the clock so that our troops got the lifesaving protection they needed."

Group faces big rivals

THE senior role in the Fres programme, known as the System of Systems Integrator (Sosi), has already been awarded to a consortium of US company Boeing and the UK arm of France's Thales.

It is the next level down in the programme, the role of vehicle integrator, that BAE is pursuing - where the company is in competition with US groups Lockheed Martin and General Dynamics, among others.

The vehicle integrator would be responsible for taking the armoured vehicle chassis and assembling all the kit on it to produce a finished vehicle. BAE also has ambitions to build the chassis.

Source: The Journal, Newcastle