Cuts Watch #128: Defence Industry
BAE Systems and industry association Aerospace, Defence and Security (ADS) have both warned that defence cuts threaten a number of large procurement programmes; orders for the Eurofighter are particularly at risk. Businesses are very likely to respond by looking for ways to increase exports.
Speaking at a media briefing yesterday, BAE Systems CEO Ian King said that his company would also try to ride out the recession by expanding customer support and services. A story in today’s Times (paywall) reports that he warned that this country still has the capacity to design and build its own fighting equipment but that “budget cuts could threaten the country’s ability to finance these projects in the future.”
The UK ordered 160 Eurofighters as part of its commitment to the consortium that builds them, and 48 are still outstanding – but this commitment could be met by selling them to another country, such as Muscat. ADS and BAE Systems both emphasised their hopes for exports as the answer to cuts in UK procurement.