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Aviation History
1988
1988 - 0906.PDF
WORLD NEWS Dollar hurts BAe as Rover deal is unveiled LONDON One day after the UK Govern ment announced it would sell state-owned vehicle manufac turer Rover Group to British Aerospace for just £150 million, BAe announced a 1987 net loss of £110 million, largely accounted for by losses in its civil aircraft division. In addition to selling its 99 • 8 per cent stake in Rover for £150 million, the Govern ment will inject a further £800 million into the company before its sale, to eliminate an estimated £600 million in bank debts and reduce Rover's liabilities to other creditors. The Government has already agreed to write off £1-1 billion in Rover debts. However, the proposed sale is subject to approval by the European Commission, which is to investigate whether the £800 million amounts to a state subsidy and is therefore in breach of EC competition rules. This will take two to three months. The acquisition will also need approval by BAe shareholders, who will be summoned to an extraordi nary general meeting. Disclosure of the distinctly advantageous terms for the sale of Rover conveniently preceded BAe's announce ment of a £110 million net loss in 1987. Losses in the civil aircraft division amounted to £68 million. Of this, £38 million was lost through BAe's commitment to Airbus Industrie, a sum which BAe chairman Prof Roland Smith describes as "unacceptable to me or to the board of British Aerospace". BAe blames the adverse results in the civil aviation sector on the continued weak ness of the Dollar, and has made a £320 million "exceptional provision" in the 1987 accounts to meet antici pated trading losses on civil Rover Group chairman Graham Day, left, Trade and Industry Secretary Lord Young, and BAe chairman Prof Roland Smith, right, look pleased at the deal struck aircraft orders and assumed sales up to 1991. Smith says that £180 million of the exceptional provision is for anticipated losses through Airbus Indus trie, and adds: "We are seeking some fundamental changes in the Airbus struc ture and financial arrange ments". In particular, BAe would like to see Airbus Industrie become a public limited company, accountable to its shareholders, and for it to become a "competitive, wealth-creating activity". Airbus currently forecasts it will become profitable by 1990/91, but Smith states: "We take a more conservative and pessimistic view". He adds: "We are not allowing things to remain as they are, although the room for manoeuvre which we have is limited, because of the involvement of the govern ments". Chief executive Sir Raymond Lygo says that it would be "naive" to suggest that BAe would pull out of the Airbus consortium if changes were not made according to its liking, but adds: "We are a 20 per cent shareholder, and we can block every movement at Airbus if we want to, although that would be a pretty nega tive thing to do". BAe's defence business remains healthy, with mili tary aircraft profits up £9 million to £155 million, and weapons and electronics profits up £59 million at £199 million. The space and communications division doubled its profits to £4 million. Offsetting this, company-funded product development rose £10 million, to £73 million. Spain joins French spy satellite MADRID Spain has joined France's Helios military reconnais sance satellite programme. The first spacecraft, providing an image resolution better than lm, is scheduled for launch in 1992. France remains the major partner in the FFr4-5 bil lion ($550-700 million) pro gramme, with an 80 per cent share. Italy already has a 13 per cent share, and Spain has agreed to take a 7 per cent stake. Industrial participation and work sharing between the three countries will be agreed shortly. The Helios programme includes four satellites in 800-900km-high Sun-syn^ chronous orbits, ground receiving stations, and rapid image-processing facilities. Aerospatiale has success fully conducted qualification tests of the satellite's high-resolution "keyhole" camera. France and Spain have also signed a military agreement similar to one recently concluded between France and Italy, whereby the navies of the three countries will conduct joint exercises as a first step towards closer co operation in maintaining security and defence in the Mediterranean area. Starship foreplane modified WICHITA Beech has added vortex generators to the foreplane of the Starship I business air craft to cure partial stalling of the surface in some flight conditions, which led to inadequate pitch damping. The wedge-shaped devices sit aft of the upper leading edge and re-energise airflow at the affected point in the flight envelope: 115-120kt at 41,000ft. They work in conjunction with a stick- pusher, which limits the maximum attainable angle of attack. "The issue over the Star- ship's stall-warning system has its origin in the basic docile behaviour inherent in the tandem-wing config uration, where full aft stick position defines the stall, as opposed to a nose-down pitch ing moment," says Joe Furnish, divisional manager of Starship engineering, in a recent Beech letter to poten tial customers. Delays in. achieving certifi cation of the all-composite twin-turbine business aircraft have not affected production schedules, and deliveries should not be significantly later than planned, says Beech. FLIGHT INTERNATIONAL, 9 April 1988
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