BAE may close major shipyard - paper

LONDON Sun Nov 25, 2012 2:41pm GMT

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LONDON (Reuters) - Defence contractor BAE Systems may close one of its major shipyards in Britain as it looks to balance capacity with future workloads, a top executive has told a newspaper in an interview published on Sunday.

Nigel Whitehead, who is group managing director, programmes and support, told the Sunday Telegraph that BAE, which operates a shipyard in Portsmouth and two in Glasgow, "anticipate(s) that there will be a reduction in footprint".

"We anticipate ... that part of that might actually be the cessation of manufacturing at one of the sites," he was quoted as telling the paper. "We will be making decisions this year, so we have a number of weeks in which to do that."

The company is facing a drop in work once work on the two Queen Elizabeth class aircraft carriers are completed.

The paper said industry insiders believe BAE's base at Portsmouth is most at risk, with an estimated loss of 1,500 jobs. It said the Royal Navy's base at Portsmouth, where BAE also does repairs, is not at risk.

The news comes just weeks after talks between BAE and EADS on the world's largest defence and aviation merger collapsed.

"We continue to work closely with the Ministry of Defence to explore all possible options to determine how best to sustain the capability to deliver complex warships in the UK in the future," a spokeswoman for BAE told Reuters.

"This work is ongoing and we are committed to keeping our employees and trade unions informed as it progresses."

(Reporting by Laurence Fletcher and Rhys Jones; Editing by Greg Mahlich)

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