Restructuring underperforming European joint ventures is a top priority for BAE Systems following the company's emergence from the "crisis" surrounding its troubled UK Nimrod maritime patrol aircraft and Astute-class submarine projects.
Chief executive Mike Turner says the manufacturer is intensifying talks with Finmeccanica to boost financial returns on its 50% shareholding in their AMS defence electronics joint venture.
"Our focus in Europe is on changes that improve the performance of our joint ventures," says Turner. "We are very concerned they don't give us the return they should."
BAE has proposed splitting the pair's joint activities into three autonomous areas, leading to BAE taking a majority stake in AMS, but giving Finmeccanica control of the avionics and communications businesses.
Finmeccanica chief executive Pierfrancesco Guarguaglini said recently that the Italian industrial state holding company is interested in closer ties with BAE, despite recent difficulties met in their partnership talks.
Turner, meanwhile, dismisses reports that BAE is in merger talks with US defence contractors as "speculation".
He believes BAE is well placed for future growth with its renegotiated Nimrod and Astute contracts, having "very significantly de-risked our company". He adds: "We will now only accept a fixed price when enough development work has been done to sufficiently mitigate risk."
The UK Ministry of Defence is considering a BAE offer of Hawk 128s to meet its advanced jet trainer requirement as part of efforts by BAE to secure the long-term future of the programme.
Turner is also optimistic the Eurofighter Typhoon, in which BAE is a major industrial partner, will win export orders before the Lockheed Martin F-35 Joint Strike Fighter comes to market.
Source: Flight International
