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Eurofighter Typhoon equipped with Storm Shadow |
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"The formation of a world-class aerospace and defence company from two world-famous names promises the best of all worlds." |
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BAe systems takes off |
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| At the end of November 1999 British Aerospace (BAe) and Marconi Electronic Systems (MES) successfully merged as BAe Systems, creating a national giant and a first-rank contender in the global aerospace and defence industry.
Globally BAe Systems is the second largest defence contractor and the joint third largest aerospace and defence company. It is the most international of all aerospace and defence companies with more than 100,000 employees in nine home markets. With an annual turnover of £12.3 billion, an order book worth £37.5 billion and a strong net balance sheet, it has the financial power compatible with future market requirements. It has a world-class prime contracting ability and the depth of skills and capabilities to manage the most complex of systems tasks and to deliver integrated solutions in response to growing customer demand. To reflect the new global reality and the depth of systems capabilities, it has created a new identity that carries equity from both companies, drawing on its proud British past and embracing its worldwide future. The company will drive forward focused on three value growth areas: maximising the value of its existing portfolio to deliver increased performance from the order book; exploiting key growth opportunities and grow the business; and exploiting further consolidation of the industry. “We will achieve a major boost in operating performance and competitiveness through the synergies and opportunities available to the new company,” said BAE Systems chief executive Mr Weston. “Specifically, the combination of MES’s cost management and financial control skills with BAe’s large-scale project management and systems integration skills will produce significant benefits. “We are opening all aspects of our business to change – with no sacred cows – to achieve a step change in performance. We will seek out and adopt best practice from both companies and from outside. And we will create a seamless company with cross-staffing, common values and common critical processes.”
It is planned to grow the business primarily in three key areas – customer support, commercial aircraft and defence systems. There is a growing demand for integrated systems solutions and BAe Systems has a rare competence in this area. The market for commercial aircraft continues to rise with a 20-year requirement of $1,200 billion. Customer support and outsourcing opportunities will increase significantly – already it stands at £200 billion worldwide. “BAe Systems has the size and capability to ensure it takes a lead role in the global consolidation of the aerospace and defence sector”, explained Mr Weston. “We are well positioned for further European and US moves and we are just one step away from our goal of being a significant part of the leading global player in our business,” he said. Rapid and effective integration is already under way with a radical flat management structure to give programme visibility at the corporate centre. Programme focus is increased by the appointment of the company’s best managers to the programmes rather than conventional business units. “We have an exceptionally bright future. However, performance is the key and we are now focused on meeting the challenges of a successful post-merger integration programme,” Mr Weston said. New organisation BAe Systems has announced a strong programme-led organisation to provide real focus on the customer and to deliver significant synergy savings for the new merged company. It reflects the predicted growth in the area of systems, systems integration, service and service-related areas. And it creates a single, seamless company philosophy through ownership of common processes by function leaders. Sir Dick Evans heads the new organisation as chairman with John Weston as chief executive. The new organisation became effective from 30 November 1999. George Rose is group finance director with Sir Charles Masefield group marketing director and Michael Lester group legal director. Two chief operating officers, Mike Turner and Peter Gershon, are responsible for the business operations of the new company reporting to Mr Weston. Peter Gershon has responsibility for managing programmes and the company’s worldwide customer support operations and Robin Southwell has been appointed group managing director – customer support, a key growth area. As group managing director – programmes, Steve Mogford supports Peter Gershon in driving the company’s focus on major programmes. Some 11 programme managing directors have been appointed with responsibility for the operational and profit performance of their individual programmes. Mike Turner is responsible for all business units, including BAe Airbus and international partnerships. Rod Leggetter, as group managing director, operations, has responsibility for shipyards and providing an aerostructures manufacturing service to the programmes. He will sell this manufacturing capability to other prime contractors in line with UK regulatory requirements.
Mike Rouse has been appointed group managing director – international partnerships, to manage the new company’s relationship with joint venture partners, including Matra BAe Dynamics, Alenia Marconi Systems, SAAB, STN Atlas, SIKA, Matra Marconi Space and Thomson Marconi Sonar. Allan Cook takes charge of the avionics business from MES and British Aerospace Systems & Equipment as well as current operations in Australia as group managing director – avionics. This business unit is structured to comply with regulatory undertakings given to the UK government. A number of key group-wide functions have been created with responsibility for specialist expertise, professional standards, quality of staff, provision of resources to programmes and business units and key common processes. A central appointment is that of Tony Rice as group procurement director, who will drive savings from the company’s currently dispersed procurement activities by establishing common, cross-company processes.
Major international partners • Matra BAe Dynamics SAS: a 50/50 partnership between BAe Dynamics and Matra Defense. • UKAMS Limited: a subsidiary of Matra BAe Dynamics responsible for the development and initial production of the UK variant of the principal anti-air missile system. • Alenia Marconi systems: A joint venture between BAE Systems and Finmeccanica (Italy) with capabilities in ground and naval radar, missile systems, air traffic management, command and control, simulation and synthetic environments, engineering, software design and manufacturing. AMS also includes BAE Systems activities in the surface-based radar and land and naval systems fields. • STN Atlas Elektronik: STN Atlas is a leader in the design, development, supply and support of military and related commercial systems. • Matra Marconi Space: Employing 4,300 people, with a turnover in 1998 of US$1.4 billion, its activities cover science and earth observation, telecommunications and ground systems, military programmes, launchers and orbital infrastructure. • SIKA International Ltd: BAE Systems and Lockheed Martin have formed SIKA International to complete the solution for TRACER/ FSCS (tactical reconnaissance armoured combat equipment requirement/future scout cavalry system). TRACER/FSCS will enter service in 2007. • Thomson Marconi Sonar: TMS, a specialist in submarine and surface-ship sonar, and mine-warfare systems, operates through three companies in the UK, Australia and France. • SAAB AB: BAE Systems has a 35 per cent share in SAAB AB, enabling a consumer strategy to be pursued in combat aircraft, aerostructures, guided weapons, asset management and training systems. • Euromissile Dynamics Group Int: A three-nation European organisation that is developing Trigat third-generation anti-tank missile weapon systems. |
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"BAe Systems has a world-class prime contracting ability and the depth of skills and capabilities to manage the most complex of systems tasks." |
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