British Aerospace
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British Aerospace

British Aerospace plc
TypeState-owned company (1977-1980)
Public limited company (1980-1999)
IndustryAerospace
FateMerged with Marconi Electronic Systems
PredecessorBritish Aircraft Corporation
Hawker Siddeley
Scottish Aviation
SuccessorBAE Systems
Founded29 April 1977; 43 years ago (1977-04-29)
Defunct30 November 1999; 21 years ago (1999-11-30)
Headquarters
Farnborough, Hampshire
,
United Kingdom
ProductsAircraft
SubsidiariesRover Group (1988-1994)
Websitebae.co.uk (archived)

British Aerospace plc (BAe) was a British aircraft, munitions and defence-systems manufacturer. Its head office was at Warwick House in the Farnborough Aerospace Centre in Farnborough, Hampshire.[1] Formed in 1977, in 1999 it purchased Marconi Electronic Systems, the defence electronics and naval shipbuilding subsidiary of the General Electric Company plc, to form BAE Systems.

History

Formation and privatisation

The company has its origins in the Aircraft and Shipbuilding Industries Act, which called for the nationalisation and merger of the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation. Accordingly, on 29 April 1977, the new entity was formed in the United Kingdom as a statutory corporation.

In accordance with the provisions of the British Aerospace Act 1980 on 1 January the statutory corporation was transferred to a limited company, which then re-registered as a public limited company (plc), under the name "British Aerospace Public Limited Company", on 2 January 1981.[2] BAe was privatised in two main phases, the first during February 1981, involving 51.6% shares of the company, during which the public sale was 3.5 times subscribed and at the end of the first day's trading, share prices were 14% above the original offer price.[3] The second phase occurred in May 1985, in which 48.4% shares were sold; this sale was 5.4 times subscribed and the first day closing price was 11% above the initial offer price.[3] Despite this privatisation, the British Government maintained a £1 golden share, which allowed it to veto foreign control of the board or company.[4]

Programmes

A German Air Force Tornado IDS in flight, 2007

On 29 July 1976, less than one year prior to BAe's formation, the contract for the first batch of Panavia Tornado, an advanced nuclear-capable fighter bomber, was signed.[5] It was developed and produced via a multinational company, Panavia Aircraft GmbH], of which BAe was one of several companies to be heavily involved.[6][7] On 10 July 1979, the maiden flight of a production Tornado occurred.[8] On 5 and 6 June 1979, the first aircraft were delivered to the RAF and German Air Force respectively.[9] On 25 September 1981, the first Italian Tornado was delivered.[10] The Tornado would be produced in vast numbers, the 500th aircraft to be completed was delivered to West Germany on 19 December 1987.[11] Production of the Tornado was terminated during 1998; the final batch being delivered to the Royal Saudi Air Force, who had ordered a total of 96 IDS Tornados.[12] Aviation author Jon Lake noted that "The Trinational Panavia Consortium produced just short of 1,000 Tornados, making it one of the most successful postwar bomber programs".[13]

During 1978, BAe relaunched the BAe 146, a short-haul regional airliner that had been previously worked on by Hawker Siddeley. The company marketed it as a quiet and economic turbofan-powered compact airliner that could replace the previous generation of turboprop-powered feeder aircraft.[14] During 1982, the first completed aircraft made its first flight.[15][16] Upon its launch into service during the following year, it was hailed as being "the world's quietest jetliner".[17] In 1993, an upgraded model of the BAe 146, referred to as the Avro RJ series, superseded the original; changes included the replacement of the original Lycoming ALF 502 turbofan engines by higher-thrust LF 507 turbofan engines, which were housed in redesigned nacelles. The Avro RJ series also featured a modernised cockpit with EFIS replacing the analogue ADI, HSI, and engine instrumentation.[18] Production of the Avro RJ ended with the final four aircraft being delivered in late 2003; a total of 173 Avro RJ aircraft was delivered between 1993 and 2003.[19]

Grey jet aircraft with black radome and large engine inlet hovering with undercarriage extended. It is obscuring another identical jet in the distance. Near the bottom of the photograph, taken out at sea, is the horizon
800 NAS Sea Harrier FRS1 from HMS Illustrious in post-Falklands War low-visibility paint scheme.

BAe developed several advanced models of the Harrier Jump Jet family. During 1978, the Royal Navy received the first BAe Sea Harrier of an initial order for 24.[20][21] The Sea Harrier was declared operational three years later, being initially embarked on both the first Invincible class aircraft carrier HMS Invincible, and the older HMS Hermes.[22] Following their decisive role in the 1982 Falklands War,[23] several of the lessons learnt from the conflict shaped a new upgrade programme for the fleet authorised in 1984, resulting in the Sea Harrier FRS.2 (later known as FA2). The first flight of the prototype took place in September 1988 and a contract was signed for 29 upgraded aircraft in December of that year.[24] The Sea Harrier FA2 was fitted with the Blue Vixen radar, which was described as one of the most advanced pulse doppler radar systems in the world.[25]

During August 1981, BAe and the American aircraft manufacturer McDonnell Douglas signed a memorandum of understanding regarding the McDonnell Douglas AV-8B Harrier II.[26] Under this agreement, while BAe was effectively a subcontractor rather than a full partner, receiving 40 percent of the airframe's work-share in terms of man-hours.[26] Production took place at McDonnell Douglas' facilities in suburban St. Louis, Missouri, and manufacturing by BAe at its Kingston and Dunsfold facilities in Surrey, England.[27] The variant procured for the RAF, which was known as the BAe Harrier II, featured many differences, including avionics fit, armaments and equipment; the wing of the GR5 featured a stainless steel leading edge, giving it different flex characteristics from the AV-8B.[28] In December 1989, the first RAF squadron to be equipped with the Harrier II was declared operational.[29]

During 1979, BAe officially joined the multinational aircraft manufacturer Airbus and acquired a 20% share in the venture,[30][31] the move effectively reversed a decision made ten years prior in which the UK government had withdrawn its support for the Airbus consortium. Airbus's first aircraft, the A300, had been received with little initial demand,[32] but orders for the airliner had picked up during the late 1970s,[33][34] By 1979, the consortium had 256 orders for A300,[35] and Airbus had launched its second airliner, the A310, less than 12 months prior to BAe formally joining the consortium.[31] As time went on, it was becoming clear that Airbus was no longer a temporary collaboration to produce a single plane as per its original mission statement; it had become a long-term brand for the development of further aircraft. By the late 1980s, work had begun on a pair of new wide-body airliners, the biggest to be produced at this point under the Airbus name; these would be launched during the 1990s as the Airbus A330 and the Airbus A340.[36][37]

British Aerospace EAP at the Farnborough Air Show, 1986

During the 1983 Paris Air Show, the launch of the Experimental Aircraft Programme (EAP) to develop and fly an advanced fighter technology demonstrator was announced; at this point, the effort was intended to be a partnership between Britain and several of its European neighbours, including West Germany and Italy.[38][39] The resulting aircraft, the British Aerospace EAP, ended up being primarily developed by BAe as a private venture; it formed the basis for the multinational Eurofighter Typhoon. In 1986, in conjunction Alenia Aeronautica, CASA and DASA, BAe formed Eurofighter GmbH for the development and production of the Eurofighter.[40] The multinational organisation's head office were established in Hallbergmoos, Bavaria, Germany.[41] The maiden flight of the Eurofighter prototype took place in Bavaria on 27 March 1994, flown by DASA chief test pilot Peter Weger.[42] On 30 January 1998, the first production contract for the Eurofighter was signed between Eurofighter GmbH, engine manufacturer Eurojet and NETMA.[43]

On 26 September 1985, the UK and Saudi Arabian governments signed the Al-Yamamah arms deal with BAe as prime contractor. The contracts, extended in the 1990s and never fully detailed, involved the supply of Panavia Tornado strike and air defence aircraft, Hawk trainer jets, Rapier missile systems, infrastructure works and naval vessels.[44] The Al Yamamah deals are valued at anything up to £20 billion and still continue to provide a large percentage of BAE Systems' profits.[45][46]

Acquisitions and restructuring

On 22 April 1987, BAe acquired Royal Ordnance, the British armaments manufacturer, for £190 million. Subsequently, the German armaments specialist Heckler & Koch GmbH was folded into this division following its acquisition by BAe four years later.

In 1988, BAe purchased the Rover Group from the British government of Margaret Thatcher.

In 1991, BAe acquired a 30% interest in Hutchison Telecommunications through a stock swap deal, where Hutchison was given a controlling stake of 65% in BAe's wholly owned subsidiary - Microtel Communications Ltd.[47][48][49] In August 1991, BAe formed a naval systems joint venture, BAeSEMA, with the Sema Group.[47] BAe acquired Sema's 50% share in 1998. 1991 also saw BAe begin to experience major difficulties. BAe saw its share price fall below 100p for the first time. On 9 September 1991, the company issued a profits warning and later that week "bungled" the launch of a £432 million rights issue.[50] On 25 September 1991 BAe directors led by CEO Richard Evans ousted the Chairman Professor Sir Roland Smith in a move described by The Independent as "one of the most spectacular and brutal boardroom coups witnessed in many years."[51] Evans described the troubles as a confluence of events:[52]

"our property company [Arlington Securities] was hit with a lousy market. Sales of the Rover Group sank by about a fifth and losses mounted. The government's defence spending volumes underwent a major review. Losses in our commercial aerospace division increased dramatically with the recession in the airline industry."

During mid-1992, BAe wrote off £1 billion of assets, largely as part of redundancies and restructuring of its regional aircraft division.[53] This was largest asset write-off in UK corporate history. The General Electric Company (GEC), later to sell its defence interests to BAe, came close to acquiring BAe at this time.[53] BAe cut 47% of its workforce (60,000 out of 127,000), 40,000 of which were from the regional aircraft division.

Evans decided to sell non-core business activities which included The Rover Group, Arlington Securities, BAe Corporate Jets, BAe Communications and Ballast Nedam. Although the rationale of diversification was sound (to shield the company from cyclical aerospace and defence markets) the struggling company could not afford to continue the position: "We simply could not afford to carry two core businesses, cars and aerospace. At one point Rover was eating up about £2 billion of our banking capacity."[54] BAe Corporate Jets Ltd and Arkansas Aerospace Inc were sold to Raytheon in 1993. During 1994, the Rover Group was sold to BMW and British Aerospace Space Systems was sold to Matra Marconi Space. In 1998, BAe's shareholding of Orange plc was reduced to 5%.[48] The Orange shareholding was a legacy of the 30% stake in Hutchison Telecommunications (UK) Ltd.

During 1994, BAeSEMA, Siemens Plessey and GEC-Marconi formed UKAMS Ltd as part of the Principal Anti-Air Missile System (PAAMS) consortium. UKAMS would become a wholly owned subsidiary of BAe Dynamics in 1998. During 1995, Saab Military Aircraft and BAe signed an agreement for the joint development and marketing of the export version of the JAS 39 Gripen. In 1996, BAe and Matra Defense agreed to merge their missile businesses into a joint venture called Matra BAe Dynamics. In 1997, BAe joined the Lockheed Martin X-35 Joint Strike Fighter team. During the following year, BAe acquired the UK operations of Siemens Plessey Systems (SPS) from Siemens AG, while DASA purchased SPS' German assets.[55][56]

During the 1990s, BAe was the largest exporter based in the United Kingdom; a Competition Commission report released in 2005 calculated a ten-year aggregate figure of £45 billion, with defence sales accounting for approximately 80%.[57]

Transition to BAE Systems

During the late 1990s, European defence consolidation became a prevailing practice; European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.[58] This ambition led to numerous reports linking various European defence groups - mainly with each other but also with American defence contractors. During July 1998, merger discussions commenced between BAe and DASA.[59] Terms for such a merger had been reportedly agreed between British Aerospace Chairman Richard Evans and DASA CEO Jürgen Schrempp in December 1998.[60][61] However, when the British General Electric Company (GEC) put its defence electronics business Marconi Electronic Systems (MES) up for sale on 22 December 1998, BAe's management opted to abandon the DASA merger in favour of purchasing its British rival.[62][63] During 2004, Evans stated that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.[60]

Schrempp was angered by BAe' reversal, and opted to pursue other partner companies for DASA to merge with. On 11 June 1999, the Spanish aircraft company Construcciones Aeronáuticas SA (CASA) a memorandum of understanding for such a merger,.[64] On 14 October 1999, DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company (EADS).[65] 10 July 2000 was "day one" for the new company, which became the world's second-largest aerospace company after Boeing and the second-largest European arms manufacturer after BAE Systems.[66]

The GEC merger to create a solely British company, compared to the prospective Anglo-German company that would have resulted from merging with DASA, was promoted as having superior prospects for further penetration of the lucrative defense market of the United States. The newly combined company, which was initially referred to as the "New British Aerospace", was officially formed on 30 November 1999; it is named BAE Systems.[67]

Products

Aircraft production

A buzz BAe 146-300
Harrier GR5
BAe Nimrod MRA4
Sea Harrier FA2 hovering
A BAe built Eurofighter development aircraft

Airliner wing production

An example of a wing of the first Airbus model, the A300

Missiles

A vertically-launched Sea Wolf
Skylark sounding rocket

Unmanned Air Vehicles

Space hardware

An artist's depiction of HOTOL

Security Systems

  • CONDOR CONtraband DetectOR
  • Vehicle Cargo X-Ray Systems

Corruption investigation and criticisms

There have been allegations that the Al Yamamah contracts were a result of bribes ("douceurs") to members of the Saudi royal family and government officials. Some allegations suggested that the former Prime Minister's son Mark Thatcher may have been involved; he has strongly denied receiving payments or exploiting his mother's connections in his business dealings.[68] The UK National Audit Office investigated the contracts and has so far never released its conclusions - the only NAO report ever to be withheld. The BBC's Newsnight observed that it is ironic that the once classified report analysing the construction of MI5's Thames House and MI6's Vauxhall Cross headquarters has been released, but the Al Yamamah report is still deemed too sensitive.[]

The 2007 documentary film Welcome Aboard Toxic Airlines contained evidence that vital data was withheld from a 1999-2000 Australian Senate Inquiry into the health and flight safety issues relating to oil fumes on the BAe 146. The film also contains an Australian Senator speech about money being paid by BAe for silence on the fumes issue.[]

See also

References

Citations

  1. ^ "Sites." British Aerospace. Retrieved 31 August 2011. "British Aerospace plc Warwick House, Farnborough Aerospace Centre, Farnborough, Hampshire GU14 6YU."
  2. ^ Certificate of Incorporation on Re-Registration as Public Limited Company
  3. ^ a b "British Aerospace UK Heritage".
  4. ^ "Written Answers -- British Aerospace". Hansard. 17 December 1980. Retrieved 2008. col. 179
  5. ^ Long, Wellington. "Swing-Wing Wonder Weapon Is Going Into Production." Ludington Daily News,24 August 1976.
  6. ^ Segell 1997, p. 124.
  7. ^ Morris, Joe Alex Jr. "Messerschmitt Back in Business." St. Petersburg Times, 30 April 1969.
  8. ^ "Nations - United Kingdom". Panavia Aircraft GmbH. Retrieved 2019.
  9. ^ Middleton, Drew. "Military Analysis: West Germany Is Modernizing Military Forces." The New York Times, 23 September 1979. Retrieved 23 September 1979.
  10. ^ Parsons, Gary. "TTTEnd of an era." airsceneuk.org.uk. Retrieved 19 January 2011.
  11. ^ Taylor 1987, p. 58.
  12. ^ Jackson et al. 1998, p. 241.
  13. ^ Lake 2002, pp. 446, 455.
  14. ^ Hewish 1982, p. 857.
  15. ^ Velupillai 1981, p. 1244.
  16. ^ Hewish 1982, p. 858.
  17. ^ "Coming: Smaller Jetliners." Popular Mechanics, September 1984. 161(9), p. 98.
  18. ^ "VLM Introduces Jet Aircraft." Archived 29 June 2008 at the Wayback Machine Velocity, VLM Magazine, May 2007. Retrieved 2 January 2008.
  19. ^ "Commercial Aircraft Directory - Avro RJ-85ER." Flight Global, Retrieved 14 November 2012.
  20. ^ Bull 2004, p. 120.
  21. ^ Grove 1987, pp. 319-320.
  22. ^ Ford, Terry (1981). "Sea Harrier - A New Dimension". Aircraft Engineering and Aerospace Technology. Bradford, England: Emerald Group Publishing. 53 (6): 2-5. doi:10.1108/eb035729. ISSN 1758-4213. Archived from the original on 5 April 2012.
  23. ^ Sloyan, Patrick J (23 May 1982). "Sea Harrier changes face of air warfare". Tri City Herald.[dead link]
  24. ^ "First Flight for Sea Harrier FRS2". 10 (13). Janes Defense Weekly. 1 November 1988: 767. Cite journal requires |journal= (help)[dead link]
  25. ^ Hoyle, Craig (9 May 2006). "Harrier high". Flightglobal. Archived from the original on 1 January 2014. Retrieved 2013.
  26. ^ a b Wilson 2000, p. 26.
  27. ^ Gaines 1985, p. 148.
  28. ^ "Aerospace, Volume 20." Royal Aeronautical Society, 1993, p. 14.
  29. ^ Nordeen 2006, p. 68.
  30. ^ Rinearson, Peter (19 June 1983). "A special report on the conception, design, manufacture, marketing and delivery of a new jetliner--the Boeing 757". Seattle Times.
  31. ^ a b "History - Technology leaders". Airbus. Archived from the original on 25 September 2015. Retrieved 2009.
  32. ^ "Now, the Poor Man's Jumbo Jet". TIME Magazine. 17 October 1977.
  33. ^ Witkin, Richard (7 April 1978). "Eastern accepts $778 million deal to get 23 Airbuses". The New York Times.
  34. ^ Carman, Gerry (11 December 1979). "Airbus funds flow on". The Age. Australia.[dead link]
  35. ^ "The Airbus fight to stay ahead". BBC News. 23 June 2000. Retrieved 2011.
  36. ^ Frawley, Gerald. "Airbus A330-200". "Airbus A330-300". The International Directory of Civil Aircraft, 2003/2004. Aerospace Publications, 2003. ISBN 1-875671-58-7.
  37. ^ "Airbus faces critical decision in coming months". Reuters. 26 December 2001.
  38. ^ "BAe EAP ZF534: Museum Accession Number X005-5992." Royal Air Force Museum Cosford, Retrieved: 22 June 2019.
  39. ^ "BAe EAP." BAE Systems, Retrieved: 22 June 2019.
  40. ^ Cowton, Rodney. "Eurofighter partners: West Germany, Britain, Italy and Spain." The Times, 7 June 1986.
  41. ^ "Impressum: Eurofighter Jagdflugzeug GmbH Am Söldnermoos 17 D-85399 Hallbergmoos Germany". Eurofighter. Retrieved 2011.
  42. ^ "1994: Maiden flight for future fighter jet." BBC News, 27 February 1994. Retrieved: 19 March 2008.
  43. ^ BBC "Euro-fighter contracts signed." BBC News, 30 January 1998. Retrieved: 18 September 2007.
  44. ^ Donne, Michael (12 August 1987). "BAe Hands Over First Part of Saudi Aircraft Order". Financial Times. The Financial Times Limited. p. 6.
  45. ^ Fildes, Nic (19 August 2006). "BAE confirms £5bn Eurofighter sale to Saudi Arabia". The Times. London. Retrieved 2006.
  46. ^ Steiner, Rupert (10 September 2006). "BAE clinches new £2.5bn Tornado deal with Saudis". The Business. Retrieved 2006.[permanent dead link]
  47. ^ a b "The Facts : 2004" (PDF). na.baesystems.com. p. 107. Archived from the original (PDF) on 25 January 2007. Retrieved 2012.
  48. ^ a b "BAe's record-breaking sterling Eurobond issue" (PDF). 22 June 1999. Archived from the original (PDF) on 7 May 2013. Retrieved 2012.
  49. ^ "History of Cellular services". licensing.ofcom.org.uk. Archived from the original on 5 February 2013. Retrieved 2012.
  50. ^ Betts, Paul (26 September 1991). "Leader toppled by unstoppable momentum". The Financial Times. The Financial Times Limited. p. 28.
  51. ^ Harrison, Michael (26 September 1991). "Roland Smith ousted by boardroom coup at BAe". The Independent. Newspaper Publishing plc. p. 1.
  52. ^ Evans, Richard (1999). Vertical Take-off, p. 2. London: Nicholas Brealey Publishing. ISBN 1-85788-245-8.
  53. ^ a b Stone, Chris (16 September 1993). "BAe soars out of the red". The Herald. Caledonian Newspapers Ltd. pp. 3, 7. Retrieved 2006.
  54. ^ Evans, Richard (1999). Vertical Take-off, p. 6. London: Nicholas Brealey Publishing. ISBN 1-85788-245-8.
  55. ^ Karin Backlund; Madelene Sandstrom (August 1996). The Integration of Acquired Companies Into the Defence Industry: Experiences from Western Europe. DIANE Publishing. ISBN 978-0-7881-4859-0.
  56. ^ "'The DECCA Legacy' A view from inside the RADAR company -DECCA - BAE SYSTEMS (1949 - 2009)". Retrieved 2012.
  57. ^ Competition Commission (1995) British Aerospace Public Limited Company and VSEL Plc: A report on the proposed merger Archived 2 March 2005 at the Wayback Machine p. 28.
  58. ^ "Business: The Company File: Defense merger on the radar". BBC News. 10 July 1998. Retrieved 2007.
  59. ^ "BAe and Dasa discuss proposals for merger: Aerospace groups still have 'important issues to resolve'". Financial Times. 24 July 1998. p. 1.
  60. ^ a b Spiegel, Peter (17 July 2004). "The largest aerospace companies gather next week for the Farnborough air show but the event will be without its long-time unofficial host". Financial Times. p. 11.
  61. ^ Spiegel, Peter (17 July 2004). "End of an era at BAE: how Sir Richard Evans changed the UK defence industry". Financial Times.
  62. ^ BAE Systems Annual Report 1999 22. BAE Systems plc (2000). Retrieved on 27 October 2006.
  63. ^ Turpin, Andrew (4 March 2000). "BAE eyes US targets after profit rockets". The Scotsman. The Scotsman Publications. p. 26.
  64. ^ White, David; Nicoll, Alexander (12 June 1999). "DaimlerChrysler wins fight for Spain's Casa: Deal boosts aerospace industry consolidation in Europe". Financial Times.
  65. ^ Nicoll, Alexander; Skapiner, Michael (15 October 1999). "Flying in formation: The merger of DaimlerChrysler Aerospace and Aérospatiale-Matra may pave the way for a larger European grouping or the first transatlantic defence tie-up, argue Alexander Nicoll and Michael Skapinker". Financial Times.
  66. ^ "History of EADS". EADS. Archived from the original on 3 June 2008. Retrieved 2009.
  67. ^ "BAe set to sign A8bn GEC deal with merger". The Guardian. 19 January 1999.
  68. ^ "Submission from the Campaign Against Arms Trade to the International Development Committee's Inquiry into corruption". Campaign Against Arms Trade. September 2000. Archived from the original on 19 June 2006. Retrieved 2006.

Bibliography

External links


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