IF you measured commercial strife by negative column inches in the financial press, BAE would appear to be in deep crisis.

So, just what does it all mean for the company's operations in Samlesbury and Warton, which together employ 8,000 people? The Lancashire factories have long been the 'jewel in BAE's crown,' underpinning the company's finances for the past 20 years.

The world's two most advanced fighter jets, the Eurofighter Typhoon and the new Joint Strike Fighter now being developed with America, typify the county's reputation for aerospace excellence.

With a multi-billion-pound order book spanning at least the next 25 years and investment at Samlesbury and Warton at record levels, you would expect the workforce to be quietly content. Union leaders, however, are 'increasingly concerned' about where the company is heading and are worried that events taking place outside of Lancashire will impact on jobs.

BAE Systems insists problems have been exaggerated, denies there is any rift with the MoD and says it is good shape for the future. "We are obviously going through a difficult patch," said Phil Soucy, director of media relations. "But we have £48 billion of forward orders - that is real work. The Eurofighter and the JSF are the stepping stones to the future. It is going to be noisy around Lancashire for a very long time to come with the noise of jet engines."

Building planes such as the Jaguar and the Tornado used to be highly-profitable, with the Government seemingly willing to pay whatever the company said it cost to put a new fighter in the air. Those days are over and the MoD is demanding fixed-price deals for all defence contracts and. As BAE has found to its cost with recent projects, the Government will no longer pick up the bill for work going over budget.

The company was forced to issue a £1billion profits warning in December after over-spending on contracts for the Nimrod maritime reconnaissance aircraft and the Astute nuclear submarines. This led to a fall in BAE's share price which wiped £2 billion off its value. Disgruntled institutional investors are understood to be demanding changes in the boardroom, with Blackpool-born Dick Evans or Mike Turner expected to be ousted.

When the MoD finally awarded the company a £2.8 billion contract for two new aircraft carriers last month, it insisted a third of the work should go to French competitor Thales.

The fortunes of BAE in Lancashire depend on two major programmes: the Eurofighter Typhoon and the Joint Strike Fighter. The Eurofighter, built in partnership with Germany, Italy and Spain, has been subject to a string of technical delays. The first production aircraft made its maiden flight last week and the plane is finally due to enter service with the RAF this year.

A total of 620 planes have been ordered by the partner countries, withBAE having a 37 per cent share of the workload.

The JSF programme, with BAE the major partner behind Lockheed Martin, is the world's biggest-ever defence contract,with BAE expecting about a 15 per cent share. In real money, the development work should be worth £2 billion.

If full production is given the go-ahead, BAE's share of the expected 3,000-plane order will be worth £14 billion, with at least half of the work going to Samlesbury and Warton. Together, the Eurofighter and the JSF will provide work for Lancashire BAE workers for the next 25 years at least. At Samlesbury, more than £100 million has been spent on plant and equipment in the past five years and a further £80 million is committed by 2005.