Kevin O'Toole/LONDON
THE RESHUFFLE OF senior management within many of the leading UK aerospace groups continues, setting up the industry for a potentially wide-ranging re-organisation over the next couple of years.
The latest company to make a change is GKN, the automotive engineering group which acquired Westland two years ago. After a six-month search, it has appointed Hong Kong-born industrialist Chung Kong Chow to take over chief-executive responsibilities from chairman Sir David Lees.
GKN is seen as a likely candidate to start building up its aerospace and defence interests when further consolidation begins. Although the Westland business, combined with GKN's existing armoured-vehicles operation, accounts for only one-quarter of the group's £3 billion ($4.6 billion) sales, its orderbook is beginning to look more healthy, helped by the growing tally of EH Industries EH101 orders.
By the end of 1995, the Westland division's backlog stood at £4.8 billion. GKN appears to be keen to see the business grow to store up UK aerospace work to offset down-cycles in its core international automotive business.
Lucas Industries, widely viewed as a possible subject for a GKN bid, has already announced that its chief executive, George Simpson, is to leave early in 1997 for GEC, where he will replace the long-reigning Lord Weinstock. Shake-ups are expected at both companies, following the move.
Simpson has said that Lucas wants to keep its aerospace arm to counter the automotive business cycles, but the dramatic shrinkage of the business has left it without the authority which it once had within the group. Lucas Aerospace is now under a divisional manager rather than its own chairman.
Most analysts expect a general sorting out of the Lucas Industries portfolio under the new chief executive, possibly as the prelude to a defence against a take-over.
Smiths Industries is also likely to seek acquisitions. The company is in the throes of finding a successor for chairman Sir Roger Hurn, who plans to hand over chief-executive responsibilities over the next year.
Smiths has spent the past four years building up its medical and industrial divisions with a string of acquisitions on both sides of the Atlantic, but Hurn suggests that it will be a "player" in aerospace consolidation as markets recover.
"We will have to look hard at the opportunities," he says, although declining to speculate on the likelihood of a bid for Lucas.
Other UK groups are also beginning to make ground in the wake of recession. Dowty Aerospace, now within the TI Group, saw sales grow to £440 million and profits climb above £36 million, largely because of the high initial share taken by the UK group from the Messier-Dowty landing-gear joint venture. TI reports that Messier-Dowty ended its first full year with pre-tax profits of £17.2 million on sales of £248 million.
Elsewhere, the Cobham group's revenues reached £228 million in 1995 after the string of acquisitions which have increased the size of the business by one-third over the past five years.
Hunting's aviation and defence businesses also showed solid performance and could expand further if the company wins a string of UK bids which are now pending, including the tri-service helicopter-training contract and the Royal Air Force's replacement maritime-patrol aircraft.
Source: Flight International