TIM RIPLEY
After its $725 million right-off earlier this year, BAE Systems profits are back on course, says John Weston, chief executive of the UK aerospace giant.
Speaking at Le Bourget, Weston was bullish about the company prospects and raised the possibilities of a new mergers and acquisition effort. Despite challenging market conditions, Weston believes BAE Systems is "delivering the goods" with 12% growth in its order book.
"We have a very strong balance sheet by industry standards," says Weston, giving him good scope in mergers and acquisitions. He adds that the company's management team is no longer pre-occupied with the internal restructuring of the company after the merger in late 1999 of the old British Aerospace and Marconi Electronic Systems. "In terms of management bandwidth, decks are clear again," he says.
Weston says the company is confident it can "deliver in detail" the $440 million in savings from the merger. "I have stood down seven out of the nine integration teams," he says. Except for a little work remaining on procurement and research and development, Weston says the integration is complete, "with a tick in the box". The company's move into the US market looks set to continue, with Weston declaring: "In the defence business in next 10 years, the future is transatlantic - everything will be done in transatlantic linkages."
Previously a UK-based aircraft manufacturer, now we are a global systems company," he says. "We have gone from a being a prime contractor in platforms to a prime contractor in systems."
Unique
BAE is unique in Europe because of its strong presence in the US, says Weston, where 24% of business is being done, making it the fifth largest supplier to the Pentagon.
Weston again stresses that the company has no plans to merge with Boeing. He describes the two companies as "good partners".
His ambitions are global; the company's employees represent "120,000 networked brains around the world, on six continents".
Increasing multinational coalition military operations are likely to replicated the defence market, says Weston, who comments that BAE Systems is well-positioned to capitalise on this trend.
He says the company is a major player in UK collaborative programmes and has a solid basis through Europe with joint ventures. European collaborative programmes are not difficult from an engineering point of view, says Weston. "The real challenge is getting governments to line up decision making, planning processes and procurement strategies. "If European collaboration has a future we¹ve got to find solutions to these challenges."
Source: Flight Daily News
