BAE Cuts Australian Jobs After Losing Out on Naval RevampBenjamin Katz
BAE Systems Plc said it will eliminate 125 more jobs at its Melbourne-based warships business, taking total job losses to 600, a week after the Australian government said it would focus naval production on a rival yard.
The posts in the suburb of Williamstown will be eliminated in September and October as a result of a “continuing decline in work as existing projects near completion,” London-based BAE said in a statement Wednesday.
Europe’s biggest defense company said it will engage with the Australian government to better understand the implications of the decision to focus a $A40 billion ($29 billion) fleet renewal program on state-owned ASC Corp.’s Adelaide facility. The plan offers no guarantee of work for Williamstown, where construction of two helicopter carriers is all but complete.
BAE’s statement made no mention of implications for the full-year financial outlook, which the company said on July 30 was partly dependent on the Melbourne facility, as well as Eurofighter warplane orders and exchange-rate changes.
“Our employee numbers must match the needs and status of our ongoing and upcoming projects,” a BAE spokeswoman said. “It does not change what we said about guidance, which relates to a review of options for our Melbourne shipyard facility. This review is still under way.”
Shares of BAE fell as much as 2.1 percent, the most in six weeks, and traded 1.8 percent lower at 458.90 pence as of 9:09 a.m. in London. They’ve declined 2.8 percent this year.
The U.K. company had been negotiating for months in a bid to bring more work to Williamstown, where the latest cuts could take the workforce to below 500 people, after the completion of the helicopter carriers. The site is continuing construction of ship blocks for destroyers to be assembled by ASC.
All told, Australia is seeking to buy 40 ships and submarines at a cost of almost A$89 billion over two decades.
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