BAE Systems is poised to buy Lockheed Martin Control Systems (LMCS) as part of a declared strategy of expanding its US business. John Weston, BAE chief executive, says it is close to sealing the purchase of the Johnson City, New York-based aircraft, engine and space launch vehicle controls business.
LMCS, with annual sales of $500 million, produces flight controls for the Northrop Grumman B-2 stealth bomber, Boeing C-17 transport and F/A-18 Hornet and Saab Gripen, and for Boeing 757s and 767s. It will complement the US operations of the former Marconi Electronic Systems now trading under the BAE banner.
BAE is also keen to buy Lockheed Martin's Sanders business, the US electronic warfare specialist, but it says a deal is way off, with other bidders in the running. Adding $1.2 billion-a-year Sanders to its US operation would give BAE a strong EW capability.
Weston stresses BAE's global ambitions and rejects "the European industrial logic" favoured by soon-to-be-formed rival European Aeronautic Defense and Space (EADS). "We don't consider ourselves European or British," he said at a European privatisation conference. "We're a global company. We're the only US company with a strong presence in Europe and the only European company with a strong presence in the USA."
EADS joint chairman Philippe Camus instead stresses the European imperative, calling for political integration to be speeded up to allow privatising defence and aerospace groups to become more efficient and compete with the USA.
"Privatisation accompanies the process of political integration", says Camus. "We need an evolution of the defence procurement process along the lines of European industrial restructuring". Alberto Lina, vice-chairman of Finmeccanica, parent of EADS' new ally Alenia, adds that unless Europe moves to common export, defence market, procurement and fiscal policies, EADS and others will suffer.
Weston says BAE wants none of this. "It's an illusion that we can round up and corral European defence programmes which none of Europe's armed forces can afford," he says.
Source: Flight International