BAE Systems is "reviewing" its aerostructures business and may put it up for sale before the end of the year as it focuses on its core systems integration activities.

Chief executive Mike Turner told unions last week that he was evaluating the division, which employs a total of 1,500 people in Prestwick and Salmesbury, UK, and Kansas, USA. Customers include Airbus, Boeing and Cessna.

BAE has ruled out job cuts, saying "there will be no redundancies on this issue", but hints that the division would eventually be sold. "It is not core to our main activity, which is systems integration," the company says, adding "there are other companies out there where it would fit better". The division has a turnover of roughly $500 million, although it has been seriously affected by the decline in civil aircraft manufacturing in the UK, culminating in the cancellation of the BAE Systems RJX programme - the last civil jet programme in the UK.

Meanwhile, the UK government's Defence Industrial Policy paper, revealed last week, contains mixed news for BAE, the country's largest defence contractor.

BAE has argued that putting UK defence contracts such as the forthcoming CVF aircraft carrier programme out to competitive tender is a waste of money. BAE executives claim it should be awarded large contracts without having to compete. The policy document seems to provide some support for this, saying: "We will not use the competitive process beyond the point where it can offer long-term advantage, and...we will provide a more appropriate risk/reward ratio for programmes with high technological risk." This is a more up-front investment and a quicker downselection.

But, launching the document at the Jane's/Economist defence industry conference last week, UK defence secretary Geoff Hoon suggested that BAE's UK registration will not do it any favours in the future. "[Future decisions] will be less about ownership and more about where the technological investment occurs," he said.

Source: Flight International