British Aerospace
British Aerospace (BAe) was a UK aircraft manufacturer, now part of BAE Systems.
History
The company was formed as a statutory corporation on April 29, 1977 as a result the Aircraft and Shipbuilding Industries Act. This called for the nationalisation and merger of; the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation.
In accordance with the provisions of the British Aerospace Act 1980 the statutory corporation was changed to a plc, British Aerospace Public Limited Company, on January 1 1981. On February 4 1981 the government sold 51.57% of its shares. The British government sold its remaining shares in 1985, maintaining a £1 golden share which allows it veto foreign control of the board or company.
BAe was the UK's largest exporter, a Competition Commission report gives a ten-year aggregate figure of £45 billion, with defence sales accounting for approximately 80%.
On September 26 1985, the UK and Saudi Arabian governments signed the Al Yamamah contract, with BAe as prime contractor. The contracts, extended in the 1990s and never fully detailed, involved the supply of Tornado strike and air defence aircraft, Hawk trainer jets, Rapier missile systems, infrastructure works and naval vessels. The Al Yamamah deals are valued at anything up to £20Bn and still continue to provide a large percentage of BAE Systems' profits.
In 1991, following large expenditure and a recession, BAe saw its share price fall below 100p for the first time. Only the installment of a new chairman, Richard Evans, and an emergency rights issue saved the company from bankruptcy. It is interesting to note that The General Electric Company (GEC), later to sell its defence interests to BAe, came close to acquiring BAe at this time. Following the largest British corporate write-down (at the time) in 1992, BAe set about divesting some non-core interests.
Major milestones
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- 1979, BAe offically joined Airbus, the UK having previously withdrawn support for the consortium in April 1969.
- 1985 - In June BAe delivered the first Panavia Tornado IDS to the Royal Air Force and on August 9 1985 the first Tornado Air Defence Variant (ADV) rolled off the production line.
- 1985 - On September 26 the Al Yamamah contract was signed with Saudi Arabia.
- 1994 - In March the first Eurofighter development aircraft (DA) flew from Manching, Germany. This was followed by BAe's DA2 on April 6.
- 1997 - BAe joined the Lockheed Martin X-35 Joint Strike Fighter team.
Acquisitions made/divisions established
- 1986 - Eurofighter GmbH formed with Alenia Aeronautica, CASA and DASA for development of the Eurofighter Typhoon.
- 1987 - Royal Ordnance
- 1988 - The Rover Group plc
- 1989 - British Aerospace plc became a holding company and group companies became wholly owned subsidiaries of that company.
- 1991 - Heckler & Koch GmbH
- 1991 - 30% interest acquired in Hutchison Telecommunications
- 1991 - BAeSEMA formed as a naval systems joint venture company with the Sema Group.
- 1991 - Euroflag, a European joint venture company, formed for development of the A400M
- 1992 - On January 1, British Aerospace Defence Ltd began trading as a wholly-owned subsidiary of BAe. Three previously separate defence companies now operated as divisions of that subsidiary;
- British Aerospace (Military Aircraft) Ltd,
- British Aerospace (Dynamics) Ltd and
- Royal Ordnance plc
- British Aerospace Systems and Services Division (BAe SSD)
- 1992 - British Aerospace Corporate Jets Ltd formed.
- 1992 - Avro RJ Regional Jets formed to produce the Avro RJ series, the development of the BAe 146.
- 1994 - BAeSEMA, Siemens Plessey and GEC-Marconi form UKAMS Ltd, the UK partner in the Principal Anti-Air Missile System (PAAMS) consortium, Eurosam formed the rest of the consortium.
- 1995 - BAe, the Defence Research Agency (later part of DERA), GEC-Marconi and Cray Research (UK) Ltd form The Farnborough Supercomputing Centre — a collaborative research asset.
- 1995 - Saab Military Aircraft and BAe signed an agreement for the joint development and marketing of the JAS 39 Gripen export version.
- 1996 - BAe and Matra Defense agreed to form a missiles joint venture to be called Matra BAe Dynamics.
- 1998 - UK operations of Siemens Plessey Systems (SPS) acquired from Siemens AG. DASA purchases SPS' German assets.
- 1998 - UKAMS became a wholly owned subsidiary of BAe Dynamics.
- 1998 - SEMA's 50% share of BAeSEMA.
- 1999 - In November BAe purchased Marconi Electronic Systems from GEC, creating BAE Systems (see below: Transition to BAE Systems).
Divestitures
- 1993 - British Aerospace Corporate Jets Ltd and Arkansas Aerospace Inc sold to Raytheon, BAe continues to make the wings and various fuselage sections for the Hawker jet.
- 1994 - Rover Group was sold to BMW.
- 1994 - British Aerospace Space Systems division sold to Matra Marconi Space.
- 1998 - Sold 16.11% of Orange plc, retaining 5%. The Orange shareholding is a legacy of the 30% stake in Hutchinson.
Transition to BAE Systems
Defence consolidation became a major issue in 1998, with numerous reports linking various European defence groups — mainly with each other but also with American defence contractors.
It was widely anticipated that BAe would merge with Germany’s DASA to form a pan-European aerospace giant, however BAe chose instead to merge with GEC’s defence electronics business, Marconi Electronic Systems. This move, to create a UK company compared to what would have been an Anglo-German firm, made the possibility of further penetration of the United States (US) defence market more likely.
The company, initially called "New British Aerospace", was officially formed on November 30, 1999 and known as BAE Systems.
Following that decision, DASA instead merged with Aerospatiale to create the European Aeronautic Defence and Space Company (EADS). This group was joined by Spain’s CASA following an agreement in December 1999.