BA announces more job cuts
British Airways was accused tonight of "butchery" after unveiling radical plans to cut 5,800 jobs to tackle its mounting debts.
A union threatened industrial action if there were any compulsory redundancies, while other officials attacked the airline's decision as a "stab in the back" for workers.
Ceramics group Royal Doulton added to the gloom by cutting up to 1,000 jobs, mostly in the UK, under plans to close its factory in Baddeley Green in Staffordshire and transfer production of its Royal Albert range to Indonesia.
The twin announcements followed official figures showing that 151,000 manufacturing jobs were lost in the final three months of last year.
International Labour Organisation unemployment figures - which include people not eligible for benefit - increased by 34,000 to 1,546,000 in the same period, although the claimant count showed a surprise fall last month of 10,600.
BA, which is losing £2 million a day, said the fresh job losses, on top of 7,200 previously announced, were aimed at helping to make £650 million annual savings.
Chief executive Rod Eddington said BA must be transformed into a "simpler, leaner, more focused airline".
Mr Eddington recorded a special telephone message for staff explaining that action was needed to lead BA out of a "crisis".
The airline said it would restructure its European short-haul business to compete with the no-frills carriers.
Business travellers and holidaymakers will be offered lower fares, greater flexibility and more choice from June.
BA said it wanted to achieve the job cuts by voluntary means and would work with unions to achieve its target.
Mr Eddington said the package of measures was designed to return the airline to profitability following a wide-ranging analysis of its business, led by the chief executive himself.
"We started this review with one clear objective in mind - to turn this company around.
"We will remain true to our heritage of being a full service network carrier committed to customer service excellence and world class products."
BA is making a provision of £200 million over the next two years for the restructuring costs.
Mr Eddington said BA would not become a no-frills airline and would not be launching one.
But he added: "We will compete profitably and intelligently alongside them by adopting what they do well - online bookings, high aircraft utilisation and pricing simplicity.
"We will mix it with what we do well - providing a great network with frequent flights from convenient airports, as well as delivering world-class customer service."
From the summer of 1999 to the summer of 2003, BA's capacity reduction will total 21%.
BA announced that a further eight routes would transfer from Gatwick to Heathrow by this summer - four long hauls (Mauritius, Buenos Aires, Lagos and Abuja in Nigeria) and four short hauls (Bucharest, Kiev, Riga and Zagreb).
By the summer of 2003, BA's capacity at Gatwick will have reduced by 60% since 1999.
The airline also plans to cut a further 10 routes - five long haul and five short haul - which will be announced after consultations have been completed.
The total of 13,000 job cuts will include 400 pilots, 3,400 cabin crew, 800 customer services staff at Heathrow, 550 customer services staff at Gatwick, 1,500 engineers, 2,600 world sales staff, 800 cargo employees and 2,950 others, mainly among head office and support staff.
About 6,600 of the jobs will be cut from Heathrow, 3,000 from Gatwick, 1,200 from regional bases in the UK, and 2,200 will go overseas.
Bill Morris, general secretary of the Transport and General Workers Union, said: "We expected mild surgery but what we have got is butchery.
"We will not be rushing to the barricades, but rushing to the negotiating table. On the basis of no compulsory redundancies and no attacks on our members' terms and conditions, we will help to achieve a managed reduction."
Roger Lyons, general secretary of Amicus, said: "This is a devastating body blow to staff, who have acted impeccably in responding to the needs of the company to safeguard jobs over recent months."
The GMB union accused BA of "stabbing workers in the back" and warned it would ballot for industrial action if there were any compulsory redundancies.
Prime Minister Tony Blair's official spokesman said: "I think everybody understands there have been both competition pressures in the industry and pressure post-September 11 for the airline industry as a whole."
Alex Scott, equities analyst at Seven Investment Management, added: "There are some good ideas in the strategy but the question is whether they can execute them.
"I don't think we have really seen the unthinkable today - it certainly makes sense but it's not revolutionary. But it might be enough to keep markets happy for the time being."
Doulton's restructuring over the past three years has seen it close a number of retail units, cut jobs and sell brands such as Royal Crown Derby.
Under its plans announced today it aims to become a "smaller but profitable business" based on its three global brands, Royal Doulton, Minton and Royal Albert.
The TUC said almost 20,000 manufacturing jobs were being lost every month.
General secretary John Monks said: "This is serious news and comes on top of today's British Airways cuts and Ford's Dagenham planroduction.
"There is sure to be more to come for Britain's struggling airline and manufacturing sectors.
Work and Pensions Minister Nick Brown cautioned against reading too much into one month's figures, but added: "The UK has low inflation, sound public finances and low unemployment.
"This, combined with a rise in employment and the fact that we are getting 10,000 new vacancies in Jobcentres every working day, shows that we are coping well with the uncertainties of the current international economic climate better than other countries and better than we have in the past."
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