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US: BAE 'could have' pirated our secret Stealth 3.0 tech sauce

Arms globocorp enters grey zone?

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The thing is that BAE has taken all the many billions it has made, mainly from lucrative UK military contracts - also from selling off British factories originally given to it gratis by the government* - and used the cash to buy up American plants and personnel. As the US Defense report notes:

BAE Systems Inc [the US subsidiary of BAE plc] is the largest foreign-owned or -controlled defense contractor in the United States. It employed 45,000 employees and generated annual sales in excess of $10 billion in 2005.

As of 2005, then, BAE had roughly three US employees for every two Brits - and this ratio will only have gone up further with the Airbus sale, the money from which was used to buy Armor Holdings in America. So far from being a huge booster for the UK economy, BAE seems to be a channel by which government-created capital and jobs leave the country.

But US employees in such numbers give BAE a lot of clout in America, just as it has here in Blighty. So much clout that the Armor buy was OK'd in Washington despite the fact that the firm was under federal investigation over long-running Saudi Arabian bribery allegations.

Last week, funnily enough, saw the release by BAE of the Woolf report (pdf) into its business ethics, commissioned by the company after the furore following the news of that selfsame federal investigation. (The UK's corruption probe had been previously suppressed by the Blair government, in a move recently described as "abject surrender" by British judges.) Lord Woolf and his fellow ethicsperts-for-hire have avoided looking at the Saudi corruption allegations, however, saying:

Our task is not to conduct an inquiry into the truth or otherwise of the criticisms made of past conduct. We are concerned with the Company’s present activities and, in particular, to ensure that it has the necessary policies and procedures in place to reduce, as far as is practicable, the risk of such allegations being made in the future.

Woolf and Co reckon annual ethics audits from this point on will clean up BAE's image in jig time. These audits, one might suggest, will need to address the possibility of BAE using its transatlantic position to sell closely held American weapons technology from the UK - certainly given that this possibility is being speculated on in US government documents.

The copying of American pop songs by Russian download sites may not be a big deal, after all; but bootleg superjets from Russian or Chinese factories would be a serious problem, if only because we Western taxpayers would soon get hit with a bill for some kind of sixth-generation aerospace deathware to stand the putatively pirated stealth fighters off.

That would, overall, appear to be a copyright-busting business model which could genuinely work; but not in favour of the customer. ®

*Not just weapon and aircraft ones. BAE was effectively paid to take the Rover Group off the government's hands in 1988; it sold its remaining 80 per cent stake in 1994 for £800m.

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