British Aerospace plc was a British aircraft, munitions and defence-systems
manufacturer. Its head office was at Warwick House in the Farnborough
Aerospace Centre in Farnborough, Hampshire. In 1999 it purchased Marconi
Electronic Systems, the defence electronics and naval shipbuilding
subsidiary of the General Electric Company plc, to form BAE Systems.
History = 1977 to 1997=
The company was formed in the United Kingdom as a statutory corporation on 29
April 1977 as a result of the Aircraft and Shipbuilding Industries Act. This
called for the nationalisation and merger of the British Aircraft
Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish
Aviation. In 1979 BAe officially joined Airbus, the UK having previously
withdrawn support for the consortium in April 1969.
In accordance with the provisions of the British Aerospace Act 1980 the statutory
corporation was changed to a public limited company, British Aerospace
Public Limited Company, on 1 January 1981. On 4 February 1981 the government
sold 51.57% of its shares. The British government sold its remaining shares in
1985, maintaining a £1 golden share which allows it veto foreign control of
the board or company. On 26 September 1985, the UK and Saudi
Arabian governments signed the Al Yamamah contract, with BAe as prime
contractor. The contracts, extended in the 1990s and never fully detailed,
involved the supply of Panavia Tornado strike and air defence aircraft, Hawk
trainer jets, Rapier missile systems, infrastructure works and naval vessels.
The Al Yamamah deals are valued at anything up to £20 billion and still
continue to provide a large percentage of BAE Systems' profits.
In 1986, With Alenia Aeronautica, CASA and DASA, BAe formed Eurofighter GmbH
for the development of the Eurofighter Typhoon.
On 22 April 1987 BAe acquired Royal Ordnance, the British armaments
manufacturer, for £190 million. Heckler & Koch GmbH was folded into this
division when BAe acquired it in 1991. In 1988 BAe purchased the Rover Group
which then was privatised by the British government of Margaret Thatcher.
In 1991 BAe acquired a 30% interest in Hutchison Telecommunications through a
stock swap deal, where Hutchison was given a controlling stake of 65% in
BAe’s wholly owned subsidiary - Microtel Communications Ltd. In August 1991, BAe
formed a naval systems joint venture, BAeSEMA, with the Sema Group. BAe
acquired Sema's 50% share in 1998. 1991 also saw BAe begin to experience major
difficulties. BAe saw its share price fall below 100p for the first time. On 9
September 1991, the company issued a profits warning and later that week
"bungled" the launch of a £432 million rights issue. On 25 September 1991 BAe
directors led by CEO Richard Evans ousted the Chairman Professor Sir Roland
Smith in a move described by The Independent as "one of the most
spectacular and brutal boardroom coups witnessed in many years." Evans
described the troubles as a confluence of events:
"our property company [Arlington Securities] was hit with a lousy market.
Sales of the Rover Group sank by about a fifth and losses mounted. The
government's defence spending volumes underwent a major review. Losses in our
commercial aerospace division increased dramatically with the recession in the
airline industry." In 1992 BAe formed Avro RJ Regional Jets
to produce the Avro RJ series, an evolution of the BAe 146. In mid-1992
BAe wrote off £1 billion of assets, largely as part of redundancies and
restructuring of its regional aircraft division. This was largest asset
write-off in UK corporate history. The General Electric Company, later to sell
its defence interests to BAe, came close to acquiring BAe at this time. BAe cut
47% of its workforce, 40,000 of which were from the regional aircraft
division. Evans decided to sell non-core business
activities which included The Rover Group, Arlington Securities, BAe
Corporate Jets, BAe Communications and Ballast Nedam. Although the rationale of
diversification was sound the struggling company could not afford to continue the
position: "We simply could not afford to carry two core businesses, cars and
aerospace. At one point Rover was eating up about £2 billion of our banking
capacity." BAe Corporate Jets Ltd and Arkansas Aerospace Inc were sold to
Raytheon in 1993. In 1994 the Rover Group was sold to BMW and British
Aerospace Space Systems was sold to Matra Marconi Space. In 1998 BAe's
shareholding of Orange plc was reduced to 5%. The Orange shareholding was a
legacy of the 30% stake in Hutchison Telecommunications Ltd when Hutchison
exchanged its own shares for a mobile phone company from BAe.
BAeSEMA, Siemens Plessey and GEC-Marconi formed UKAMS Ltd in 1994 as part of the
Principal Anti-Air Missile System consortium. UKAMS would become a wholly
owned subsidiary of BAe Dynamics in 1998. In 1995 Saab Military Aircraft and
BAe signed an agreement for the joint development and marketing of the export
version of the JAS 39 Gripen. In 1996 BAe and Matra Defense agreed to merge
their missile businesses into a joint venture called Matra BAe Dynamics. In
1997 BAe joined the Lockheed Martin X-35 Joint Strike Fighter team. The company
acquired the UK operations of Siemens Plessey Systems in 1998 from Siemens AG.
DASA purchased SPS' German assets. = Transition to BAE Systems: 1997 to
1999= Defence consolidation became a major
issue in 1998, with numerous reports linking various European defence groups
– mainly with each other but also with American defence contractors. It was
widely anticipated that BAe would merge with Germany’s DASA to form a
pan-European aerospace giant. A merger deal was negotiated between Richard
Evans and DASA CEO Jürgen Schrempp. However when it became clear that GEC
was selling its defence electronics business Marconi Electronic Systems,
Evans put the DASA merger on hold in favour of purchasing Marconi. Evans
stated in 2004 that his fear was that an American defence contractor would
acquire Marconi and challenge both BAe and DASA. Schrempp was angered by Evans'
actions and chose instead to merge DASA with Aerospatiale to create the European
Aeronautic Defence and Space Company. This group was joined by Spain’s CASA
following an agreement in December 1999. The GEC merger to create a UK company
compared to what would have been an Anglo-German firm, made the possibility
of further penetration of the United States defence market more likely. The
company, initially called "New British Aerospace", was officially formed on 30
November 1999 and known as BAE Systems. Products
BAe was the UK's largest exporter, a Competition Commission report gives a
ten-year aggregate figure of £45 billion, with defence sales accounting
for approximately 80%. = Aircraft production=
BAe 125 BAe 146
BAe P.125 BAe P.1216
BAe ATP British Aerospace EAP
BAE Harrier II BAe Hawk
BAe Hawker 800 BAe Jetstream 31
BAe Jetstream 41 BAe Nimrod AEW.3
BAE Nimrod MRA.4 BAE Replica
BAe Sea Harrier BAe / Aerospatiale Concorde
BAe / Avro 748 BAe / Avro Vulcan
BAe / BAC Strikemaster BAe / Blackburn Buccaneer
BAe / English Electric Canberra BAe / English Electric Lightning
BAe / Handley Page Jetstream BAe / Handley Page Victor
BAe / Hawker Hunter BAe / Hawker Siddeley Harrier
Harrier Jump Jet BAe / Hawker Siddeley Nimrod
BAe / Hawker Siddeley Trident BAe / Hunting Jet Provost
McDonnell Douglas / BAe AV-8B Harrier II McDonnell Douglas / BAe T-45 Goshawk
BAe / Saab JAS 39 Gripen BAe / Scottish Aviation Bulldog
BAe / Vickers VC10 Eurofighter Typhoon
Panavia Tornado Panavia Tornado ADV
Sepecat Jaguar = Airliner wing production=
Airbus A300 Airbus A310
Airbus A320 family Airbus A330
Airbus A340 Airbus Beluga
Avion de Transport Supersonique Futur - project
= Missiles= ALARM
Rapier Sea Dart
Sea Eagle Sea Skua
Sea Wolf Skyflash
PAAMS Skylark sounding rocket
S225XR = Unmanned Air Vehicles=
BAe Flybac BAE Systems Phoenix
BAE SkyEye BAe Stabileye
= Space hardware= Giotto probe
HOTOL Olympus-1
Orbital Test Satellite Skynet
= Security Systems= CONDOR CONtraband DetectOR
Vehicle Cargo X-Ray Systems Corruption investigation and criticisms
There have been allegations that the Al Yamamah contracts were a result of
bribes to members of the Saudi royal family and government officials. Some
allegations suggested that the former Prime Minister's son Mark Thatcher may
have been involved; he has strongly denied receiving payments or exploiting
his mother's connections in his business dealings. The UK National Audit Office
investigated the contracts and has so far never released its conclusions – the
only NAO report ever to be withheld. The BBC's Newsnight observed that it is
ironic that the once classified report analysing the construction of MI5's
Thames House and MI6's Vauxhall Cross headquarters has been released, but the
Al Yamamah report is still deemed too sensitive.
The 2007 documentary film Welcome Aboard Toxic Airlines contained evidence that
vital data was withheld from a 1999-2000 Australian Senate Inquiry into the
health and flight safety issues relating to oil fumes on the BAe 146. The film
also contains an Australian Senator speech about money being paid by BAe for
silence on the fumes issue. See also
Aerospace industry in the United Kingdom Hawker Siddeley Company
Rover Group References
External links British Aerospace