THE shrinking of Britain’s manufacturing industry has been a big concern of successive British governments. It now accounts for just 10% of GDP, down from 25% in the 1970s. So news of job cuts at BAE Systems, the country’s largest manufacturer, stoked old worries.
On October 10th the defence contractor announced that it was shedding almost 2,000 jobs out of about 35,000 in Britain, mostly in its military aerospace division. But although this was bad news for British industry and its workers, investors are more relaxed. Rising defence budgets worldwide, and particularly in America, mean that there are still plenty of growth opportunities for the world’s third-largest defence company.
The main cause of the job losses is a shortage of orders for the Eurofighter Typhoon jet, which BAE Systems makes with Leonardo, an Italian group, and the Spanish and German divisions of Airbus. Thus 750 posts will go next year at BAE’s factories in Lancashire, where parts for the Typhoon…Continue reading