BAE denies it plans to leave Portsmouth

THE BIG BUILD Sections of the new Elizabeth Class carrier
THE BIG BUILD Sections of the new Elizabeth Class carrier
Chancellor Philip Hammond holding his red ministerial box outside 11 Downing Street, London, before heading to the House of Commons to deliver his Budget

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DEFENCE giant BAE Systems has played down fears it could stop building ships in Portsmouth – but did not rule out job losses.

The company said it has drafted in LEK Consulting to perform an ‘analytical study’ of the future of the business and look at how it can drive down costs.

A report in the Independent said this includes examining whether one of the firm’s shipyards could close and named Portsmouth as an option for the axe.

But BAE yesterday denied this was the case, with a spokeswoman saying LEK was conducting a routine study as part of ‘normal business planning activity’.

BAE workers in Portsmouth fear they could be hit by redundancies as the firm slims down its future operations in line with Britain’s defence cuts.

One employee, who did not want to be named, said: ‘It doesn’t seem like good news. We’ve not been told about LEK so obviously I’m worried about redundancies.’

The global company employs around 3,000 workers in Portsmouth and has moved the headquarters of its shipbuilding division to the city.

Large parts of the navy’s two new aircraft carriers are being built in Portsmouth.

But that work will finish from around 2018 – fuelling fears of job cuts at the end of the decade.

But BAE executives are confident they can keep their shipbuilders busy until 2030 by winning the contract to build a new fleet of Type 26 frigates for the Royal Navy.

It is understood this project is what LEK has been brought in to look at in the most detail.

It is due to report on how BAE can maximise its profits and productivity from the new frigates, and help the firm devise its programme for how and where the ships should be built.

However, the frigate project is unlikely to require the same number of workers as for the carriers. With few other navy contracts in the offing, the UK government is keen for BAE to export Type 26s to other navies around the world in order to sustain British jobs.