Workers are worried their pensions will be cut

The Transport and General Workers Union (T&G) is threatening industrial action over possible change to retirement benefits.

Union national organiser Jack Dromey claims members are being asked to pay up to �20 a week more to save the four final salary pension schemes in BAE.

The company has said it is conducting a statutory review on pensions, and is asking workers for their opinions.

But Mr Dromey said: "Final salary schemes must be safeguarded.

" BAE must bear the brunt of the burden of plugging the �2.3 billion hole, as it was the company who took pension contributions holidays for a decade and more.

Fall in earnings

The company has plants at Barrow in Cumbria, Manchester, Bristol, Govan in Glasgow, and other parts of the UK.

In February the company, Europe's biggest defence contractor, reported a sharp fall in earnings for 2002.

The group also announced that its chairman Sir Richard Evans would step down at the company's annual general meeting in 2004.

BAE has seen its stock market value fall by two-thirds in the past year, as difficulties with its UK Ministry of Defence contracts have mounted.

Although BAE has now agreed new terms of its contracts with the MoD, the changes have cost the firm �750m ($1.2bn; 1.1bn euros).