Vic shipbuilder looking at staff cuts

A Victorian-based shipbuilder is looking at cutting or moving staff after the state missed out on federal Defence contracts.

BAE Systems in Williamstown will run out of work in early 2016 and 600 workers employed on projects there won't have anything to do.

"Where we can, we are looking at opportunities for employees elsewhere within the company," a spokesman said on Thursday.

"(But) as a project-based business, our employee numbers must match the needs and status of our ongoing and upcoming projects."

Prime Minister Tony Abbott could only say Victoria had a "fighting chance" at keeping jobs in the state after he was questioned about why all the Defence work was going to Adelaide.

Victorian Industry Minister Lily D'Ambrosio said BAE Systems had a prototype for an offshore patrol vessel ready to go, and this could prevent near-term job losses.

"Unfortunately Williamstown is not a marginal seat," Ms D'Ambrosio told reporters.