New jobs threat at aero giant

DEFENCE and aerospace conglomerate Smiths Group may shed a further 1,600 jobs in Britain and the US following another hit of between £40m and £50m in its aerospace division.

The hit will drag down first-half earnings by 15%, with no recovery expected in the second half, chairman Keith Orrell-Jones told shareholders at the company's annual meeting in London.

Orrell-Jones added that there has been a 'noticeable reduction in orders for a wide range of other products and services' in the past eight weeks. The industrial and sealing divisions reported falls of 15% in orders in the eight weeks after the 11 September terrorist attacks on the US.

Although civil aerospace represents only 20% of sales, Orrell-Jones warned that the expected decline in the current financial year could be as much as 40%.

The group took a £72m exceptional charge in July after 1,600 jobs were axed and a further 500 transferred from Britain and the US to lower-cost countries.

The warning sent Smiths shares plunging 27 1/2p, or 4%, t o 684 1/2p, making them the worst-performing Footsie stock.