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Fox warns of 'excessive caution' over BAE/EADS
24 September 2012
According to the Financial Times, one source close to BAE said the company "will not do this deal" if its Special Security Arrangement with the Pentagon had to change to "look more like that of EADS".
BAE holds billions of pounds worth of US defence contracts, with tens of thousands of employees based in the country.
But concerns have reportedly been raised about French and German influence over EADS. One lawyer from the Committee on Foreign Investment in the United States reportedly said that the US military would not treat a merged BAE-EADS as preferably as it had done BAE.
"BAE has been very successful in managing its US relationship," said the lawyer. "EADS is not in the same bucket, and a combined EADS-BAE is going to be treated a lot more like EADS than BAE".
But former British Defence Secretary Liam Fox has said that "BAE could be disadvantaged in the global marketplace", without a merger.
Writing in the Sunday Telegraph, Fox said his "instinctive preference" was for a US partner. But there was "not such an offer on the table".
EADS could offer a strong record in civil aerospace, something BAE lacked.
"Important points" had been made about the need for protection. "But we must also beware of excessive caution that sees only risks and never opportunities," he said.
The "EADS merger should be assessed objectively".
HAVE YOUR SAY
24 September 2012
Why does this man have any sway at all!
He was a disgraced defence secretary and in office proved to be nothing more than a lobbyist for US defence contractors.
BAE would have an independent future if they invested in the world class people and technology they have and developed products in the UK rather than just behaved as a US defence venture capitol fund.
They could start by selling BAE Inc, and investing the proceeds in the UK getting back into civil airliner production with a new regional jet for example, or going ahead with the Barrow designed 155 mm naval gun, a go it alone production Taranis etc. Or even get back into space work through Skylon.
A senior US DOD official stated at the weekend that they were quite relaxed about a BAE take over, mainly because for the F35 all the subcontracted work for the F35 to BAE was either done in the US or of relatively low tech in nature, with all BAE Inc directors being US nationals by law. Pray tell how BAE Inc therefore benefits the UK other than generating cash for dividends for a few big institutional, usually foreign, shareholders.
BAE must stay UK owned or else the UK will cease to be a viable sovereign entity.
Martin Bayliss - Stroud
24 September 2012
WHY WOULD EADS WANT TO 'MERGE' WITH A MONEY-LOSING COMPANY??
BAE's defence-oriented order book is insufficient to maintain BAE's current size + workforce in the short & foreseeable long term... EADS' non-defence (commercial/civilian) order book is generating sufficient profits for EADS to maintain its current size + workforce for both the near & long term future...
Why would profitable EADS want to 'merge' with a mammoth-sized money-losing company- BAE- unless EADS could- after the 'merger' - jettison/shut-down/substantially-downsize parts of what was previously BAE, in order to stabilize the 'merged' company's finances??
After subsuming BAE, EADS would understandably want to keep the most capable parts of BAE's research & development assets- but would not be inclined to keep these in the UK if centralizing R & D facilities & assets on the Continent/in a particular Continental country would result in a better functioning R & D dept and/or be more financially expedient...
Working with another aerospace company/companies- such as Finmeccanica, Hitachi &/or Bombardier- why doesn't BAE make a joint bid for EADS????
Alternatively: if BAE wants a larger proportion of its revenues to come from commercial- and not military aerospace ventures- why doesn't BAE just purchase 25%- 45% of EADS thereby avoiding EADS obtaining ownership of BAE through the currently proposed- misleadingly termed- 'merger' of the 2 companies??
Or, why doesn't EADS just sell its military businesses (Eurocopter and the like) to BAE, and become a 'normal' company??
... and after EADS proves that it can operate as a 'normal' company- IE: no more arbitrary-control-by-France-and-Germany, for 4 or 5 years... look for a defence company to 'merge' with....
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What is being proposed is effectively a takeover of the UK's BAE by a defacto French/German firm- EADS...
If this is allowed to occur- how long until the UK's only other defence firm with extensive contracts in the US and world-wide, Rolls-Royce, is devoured by one of France or Germany's companies??
Would France enable- or even allow- a foreign-takeover of one of its defence mega-companies such as Thales, Snecma, Safran, Dassault or DCN??
Would Germany allow a foreign-takeover of Volkswagen or Daimler or Siemens??
Roderick V. Louis - Vancouver, BC, Canada
24 September 2012
Sounds like Liam's planning his future career(?)
Hereman - Wirral, England
24 September 2012
Surely Fox is so utterly discredited that no sensible person would rate his opinion on anything.
Stan - York
25 September 2012
I believe Liam Fox is thinking along the same lines as myself. If this merger/takeover does NOT go ahead, BAE will need urgent defence contracts, such as Trident replacement, Hawk replacement and additional Typhoons. Otherwise, the company will have to close shipyards and more factories, with the loss of thousands of jobs.
MikeB - Liverpool
26 September 2012
I wonder if he has shares in BAeS?
AlMiles - Bristol, UK