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BAE Cuts 600 Jobs As It Shuts Down Factory

(c) Sky News 2012

Defence company BAE Systems (LSE: BA.L - news) is to axe over 600 jobs and close a historic factory which made tanks for the First World War.

BAE Systems said the proposals, which are currently under consultation, followed major efficiency improvements and reductions in the amount of ammunitions required by the Ministry of Defence.

This means that 330 jobs will go when it closes the site at Newcastle (Frankfurt: 725198 - news) -upon-Tyne, which is currently making Terrier vehicles for the Army.

The Newcastle factory has been a defence manufacturing site since 1847, building a number of ships and employing tens of thousands of workers in its heyday.

A further 280 jobs will be lost at BAE sites in Radway Green near Crewe, Washington in the North East and Glascoed in South Wales.

Ten jobs could also be cuts at the firm's head office in Farnborough, Hampshire.

The firm's managing director, Charlie Blakemore, said: "I know that this is difficult news for employees and we will do all we can to help them through this difficult period and mitigate the proposed job losses wherever possible."

BAE said the proposal to close the Newcastle site at the end of 2013 followed a business review which concluded that there was no prospect of new UK armoured vehicle manufacturing work once production of the Terrier ends next year.

Shadow defence secretary Jim Murphy called on the coalition Government to do more to protect the defence sector.

He said: "The country is seeing defence industrial decline on this Government's watch.

"Ministers must do more to demonstrate they have a long-term plan to stimulate and support the UK-based defence industry."

Unions reacted angrily to the annoucement.

Kevin Rowan, regional secretary of the Northern TUC, called it "a hammer blow to North East manufacturing".

"Losing so many highly skilled and well paid jobs is devastating for all individuals concerned as well as to our local economy.

"We are now witnessing the Government's savage cuts to defence taking its toll across our manufacturing and defence industries," he said.

Earlier this month, BAE Systems confirmed it had won a £1.6bn deal to provide military trainer jets to Saudi Arabia.