Unions confirm BAE job loss fears

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Unions at UK defence group BAE Systems have confirmed they are concerned about possible job losses, should the firm's £6bn Saudi Eurofighter deal collapse.

The comments come a day after BAE Systems said it feared Saudi Arabia was delaying talks to buy 72 Eurofighters.

This led to speculation that the Saudis might pull out of the deal because of anger at a UK corruption investigation into a previous deal with BAE Systems.

BAE directly employs about 5,000 people on the Eurofighter project.

"It is a big order from the Saudis and clearly a lot of jobs are riding on it," said a spokesman for the Transport and General Workers' Union.

BAE Systems has declined to comment on the ongoing speculation.

Slush funds probe

The Serious Fraud Office (SFO) inquiry into BAE Systems' sales to Saudi Arabia centres on the so-called al-Yamamah agreement, which is now 20 years old.

Under this deal, BAE Systems supplied its Tornado jets, among other items of military equipment.

The SFO is investigating allegations that BAE Systems may have used slush funds to help sweeten the deal, something the company has strenuously denied.

The negotiations over Saudi plans to buy 72 Eurofighters have no direct involvement from BAE Systems.

Instead, the deal is being negotiated between the Saudi government and the UK Ministry of Defence.

Neither the Saudis, nor the Ministry of Defence or Serious Fraud Squad, have commented on the ongoing controversy.

The Eurofighter is a pan-European project involving UK, Italy, Spain and Germany.

BAE assembles its Eurofighters in Warton, Lancashire, from parts made by all the partners in the Eurofighter project.

BAE itself makes the front and rear fuselage, while European defence consortium EADS and Italy's Alenia build the wings.