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Aviation History
1958
1958 - 0161.PDF
FLIGHT, 7 February 1958 167 B.E.A.'s Jet: Cards on the Table IT is a matter of protocol in the selling of aircraft that a pros-pective buyer is not named unless he gives his consent. Todo otherwise, in the hope of attaching some seal of approval to a product, or to advance its cause, is not only bad form; it is alsofoolish. This has always been scrupulously recognized by the commercially mature British manufacturers, who include deHavilland, Bristol, and the Hawker Siddeley Group. Bearing this in mind, we might consider how the illustriousname of Pan American World Airways has come to be drawn into the B.E.A. jet controversy. The chairman of Bristol Aircraft, Sir Matthew Slattery, con-firmed last week that PanAm were indeed the "prominent Ameri- can airline" at whose "invitation" the Bristol 200 sales team wentto America at a stage in the round-table talks when the odds against the 200 appeared to be mounting. Sir Matthew, who was givinghis personal views about the B.E.A. jet controversy, said that PanAm's interest was "very serious," and that negotiations hadreached a stage when the third draft of a form of contract was being exchanged. The invitation to America had come fromFranklin Gledhill, a PanAm vice-president, in a letter written last December. Such negotiations do not generally reach contract-drafting stage,nor does a manufacturer publicly say so, unless the airline has an order closely in prospect. This is the light in which to judgeSir Matthew's contention that, before the Government approve a B.E.A. order for 24 D.H.121s from Airco (see below) they shouldwait to see the outcome of export talks. However, the day before Sir Matthew's conference, PanAmhad issued the following statement: — "Pan American, being in the air transport business, are alwaysinterested in any new aircraft and its executives are interested in discussing same. In this sense, Pan American and the Hawker Siddeley-Bristol group, and the de Havilland group, will almost certainly be in contact. This does not, repeat not, however, imply that Pan Americanis on the threshold of purchase negotiations, only that it maintains an open door policy for any supplier whose products improve its service." This statement was issued as a result of reports in British news- papers of PanAm's interest in the 200, reports which led de Havilland—apparently to PanAm's complete surprise—to say: "Pan American Airways have informed de Hayilland that they willbe glad to discuss the D.H.121 as designed for British European Airways as soon as it is appropriate for a meeting to be arranged." And, when PanAm's New York office was asked whether PanAmwere in fact the airline which invited the Bristol 200 team to the U.S.A., the reply was: "When Bristol wished to make a presenta-tion, they received an invitation to do so." All this is put on record because PanAm's undoubted interestin the Bristol 200 is the crux of the Hawker Siddeley-Bristol case at the present time. If this interest develops into an order—or eveninto a letter-of-intent-to-purchase—the B.E.A. predilection for the D.H.121 could be swayed. Sir Matthew Slattery said that HawkerSiddeley-Bristol might go ahead with the 200, if there were enough orders to make it commercially sound, with or without a B.E.A.order. "If we get to the position where we see 20, 30,40 aeroplanes more or less in the bag, we shall go ahead." This was not a"threat, flag-wagging, or bluff." Sir Matthew recognized B.E.A.'s preference for the de Havillanddesign team, but contended that it was in the national interest for B.E.A. to place the order for the Bristol 200 with the HawkerSiddeley-Bristol team. He emphasized the strong financial resources behind the Bristol 200, saying: —"It is not true that this is wholly a private venture. Substantial progress payments are being discussed, which might be 50 per centby the time of delivery. This might be anything up to £10 million if things went wrong. Would the Government say goodbye to £10 millionor would they put a rescue operation into effect?" To build only 24 aircraft for B.E.A. would, he said, mean£10 million "down the plug," and this was the significance of the immense resources behind the Bristol 200.From the rival camp last week came the first hard facts about Airco, the joint de Havilland, Hunting and Fairey company whichis to be formed to build the D.H.121. Financial participation in Airco* will be in the proportions: deHavilland 67i per cent, Hunting 22i per cent, Fairey 10 per cent. There will be respectively four, two and one members on theboard of directors. Handley Page, according to the Minister of Transport last week, "has offered technical assistance to the deHavilland company because of its special experience with high- speed aircraft and tail design." Saunders-Roe, Ltd., the Ministeradded, might help with sub-contracting. Rolls-Royce will be financially and technically responsible fordevelopment of the powerplant (the RB.141 by-pass turboiet) and * Airco is short for Aircraft Manufacturing Company, the firm with which Sir Geoffrey de Havilland was chief designer in World War /, and which built the D.H.1, DM.2, D.H.3, etc., up to D.H.18. —most significantly, because this is usually a major "airframe"job)—they will be responsible also for its installation. A fair assessment of these D.H. proposals might be that, thoughthey do not in terms of size, assets, or production capacity, match those of the Bristol-Hawker Siddeley company (see accompanyingtables), they should at least be sufficient to develop the D.H.121. It is significant that the de Havilland company last week went onrecord with the statement: "The three Airco companies con- cerned have more than adequate financial resources to carry therisk of selling or not selling the D.H.121, assuming that the B.E.A. order is for 20 to 25 aircraft." This does not tally with Sir MatthewSlattery's view; but it suggests that the taxpayer would not have to come to Airco's rescue if things went technically wrong withthe 121. The "final de Havilland proposals," according to the Minister'sstatement in the Commons debate on January 27, only reached him that morning. It seems fair to record de Havilland's commentthat their proposals, as just outlined, had in fact been submitted to the Government some time before (having, it is believed,been redrafted several times). The final proposals contained nothing basically new, according to D.H., but were the existingproposals put into final legal and audited form. This apparent stalling by the Minister, and his suggestion thatwe wait and see how the Bristol 200 team gets on in America, clearly indicates the Government's continuing predilection for theBristol-Hawker Siddeley combine. l o sum up: each party in this unhappy controversy has nowput its cards on the table. B.E.A. want the de Havilland team; the Government prefer the Bristol-Hawker Siddeley team (or astronger D.H. consortium); de Havilland say they are strong enough to see the D.H.121 through; Bristol and Hawker Siddeleysuggest that PanAm are close to buying the Bristol 200. Where now? Time is pressing, though not yet so pressing thata few more weeks' delay will jeopardize the export potential of this new transport concept. Much is at stake for Bristol, whoseprospects in the turboprop field are certainly not improved by the shelving of the Orion. At least the aircraft firms in the HawkerSiddeley group have a widening base of general industrial interests to support them. So, if PanAm's interest in the Bristol 200 is as genuine asSir Matthew Slattery has indicated, should there not be a time- limited period for Hawker Siddeley-Bristol to attempt to securean order? If, within that time limit, this fashion-influencing U.S. airline orders the Bristol design, knowing as it does whereB.E.A.'s preferences lie, then it would be in the national interest for Bristol to get the B.E.A. order. Otherwise the order must goto de Havilland. Above all, the greatest care must be taken to avoid causingoffence to PanAm. If their interest in the 200 is only as routine as their public statements imply, they may feel that their goodname is being used for kite-flying. There was, perhaps, a warn- ing note in the words of one of their London spokesmen last week,who said: "We don't like being the meat in the sandwich." THE BALANCE OF POWER The tobies below compare productive capacities of the two groups competing for the B.E.A. jet order. They show that, allowing for the important footnote qualifications there are roughly SO per cent more people, and about twice as much production ftoorspace, behind the Bristol 200. The relative fiaures for aircraft built since the war are included for good measure; they approximate surprisingly closely though of course D.H. have not built as many heavy aircraft as Hawker Siddele'y It is impossible to assess accurately the relative financial strengths of the two groups- but a rough evaluation of the interests behind each suaoests thct the net worth of the Hawker Siddeley-Bristol group is perhaps three times thot of its rival. The Bristol 200 Consortium Aircraft FirmsInvolved A. V. Roe ... A.W.A. ... Gloster Hawker Bristol Aircraft U.K. Employee: 40,000* 13,000 53,000 U.K. FactoryArea sq ft 11.5 million* 6 million 17.5 million No. of Aircraft Built since 1945 8.500 580 9.080 * Includes substantial figures for Hawker Siddeley engines and missiles. N.B. Short's 2m sq ft and 9,000 employees not included. The de Havilland D.H.U1 Consortium (Aireo) D.H. Aircraft** ... Fairey Hunting Aircraft... 18,400 8.000 2,500 28,900 4.2 million* 2 million 0.35 million 6.55 million 5.646+ 1.365 1,500 8.511 • Includes Saunders.ftoe t Excludes large numb.r. of fuselaoes. wingi etc exported for licence-assembly. •* Excludes Engine and Propeller Companies.
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