Ex-CEO says BAE's British future 'in doubt'
Also: Eurofighter development far from complete
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The just-retired chief executive of BAE Systems plc has once again suggested that the company will move to America if it doesn't get what it wants from the British Ministry of Defence. Mike Turner also admitted that the controversial Eurofighter superjet is far from fully developed, calling on the MoD to "finish the job" and sink extra billions into completing it.
At an evidence session held yesterday morning by Parliament's defence committee, Turner made several blunt remarks. Much of the discussion hinged on the Defence Industrial Strategy (DIS) laid out by the former military procurement minister, Lord Drayson, in 2005.
Almost since the DIS policy document was published, there has been a lot of doubt as to whether the government would or could stand by it. These doubts have been strengthened by Drayson's subsequent angry resignation from the MoD, and the lengthy delays in production of a promised DIS update - the so-called DIS 2.
James Arbuthnot MP, chairman of the committee, seeking to sum up Turner's - and his industry colleagues' - views, said: "The DIS is not funded?"
"Correct," replied Turner.
"The DIS is dead?" asked Arbuthnot later.
"On hold," said Turner. "I remember when it came out, we said [at a BAE board meeting] 'At last we have a future in the UK' ... now that is in doubt".
Turner is no longer CEO of BAE Systems, of course, having been replaced by Ian King this September. Nonetheless his remarks have significance.
In theory, BAE is not free to move its headquarters to America or place itself under a non-British CEO unless HM government approves. However, the so-called "golden share" held by the government might well turn out to be worthless in the event. A similar arrangement in the case of the airports firm, BAA, was overturned by the European courts - though in that case the national-security case was not so strong as it would be with BAE.
In general, though, the prevailing view is that if BAE wants to move to America it probably can. Indeed, it more or less already has. During Mr Turner's tenure as CEO the company let go thousands of UK employees, sold off its share of Airbus and bought its way into the US, to the point where it has substantially more American employees than it does Brits.
During the evidence session, Turner also lamented that Europe had failed to come together on armoured vehicles the way it did with the Eurofighter, so weakening the British armour industry. Current low-intensity wars have seen heavy purchasing of armoured and protected vehicles intended to safeguard Western troops from ambushes and mines, but little of that business has come to Britain.
"That would have been a great opportunity, but we didn't achieve it" said Turner.
Arbuthnot suggested that perhaps only Turner could have achieved it - alluding to the fact that BAE might have chosen to buy up European armoured-vehicle firms rather than ones in America as it actually did. BAE's US acquisitions have made a lot of money selling armour to the Pentagon, but the British tank industry is effectively moribund and that of Europe fragmented.
"We looked at buying in the EU," said Turner. "In the end, it wasn't in our economic interest to do so".
COMMENTS
"Great" Britain
If BAES goes then we might as well disband the armed forces and accept that we're a damp, impotent island somewhere off the coast of Europe.
Something like half of the Sovereign Capabilities in the DIS are wrapped up with them and, while capability can be bought in relatively cheaply now, expecting that to remain the case forever is lunacy. Just ask Freddie Laker. Dropping prices to gain a Natural Monopoly, and then raising them again is unfair, but who do you cry to? Is the EU going to "make" US companies charge fair prices?
With Sovereign Capabilities gone, the prices will steadily rise until we can afford about the same level of international operations as Belgium or Ireland. And to regain those skills will take decades and billions of pounds - we'd be in the position of India or China 20 years ago, only without the manufacturing capability. Just like with nuclear power - we used to be able to build reactors, now we'd have to buy them from France.
Maybe we should take a leaf out of the Somali's book, and turn to piracy?
Another short termer on here...
The Eurofighter is not built to combat the threats here and now, as is no sigificant military hardware, that would short sighted and leave you open to a wide range of unanticipated threats.
You wouldn't say "we don't need any tanks because al-qaeda haven't got any" would you? You build the best you can afford and then adapt your tactics.
In fact this short sightedness is what led to huge amounts of Snatch (snigger) Land Rovers without a capable armoured vehicle for other operations. Fair enough the error has been spotted now but lives have been lost.
hohum
I worked for BAE Systems from 1999 to 2006. After the merger with Marconi Electronic Systems, the "B", in fact the whole of "BAE" was written to mean absolutely nothing. We were even order to write the name in block capitals (BAE SYSTEMS) until we were told otherwise a few years later.
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