BAE Systems

Coordinates:

51°16′25″N 0°46′00″W / 51.27361°N 0.76667°W

"BAE" redirects here. For other uses, see BAE (disambiguation).

BAE Systems plc is a British multinational aerospace, defence and information security company, based in London, England.[4][5] It is the biggest manufacturer in Britain as of 2017.[6] It is the largest defence contractor in Europe[7] and the seventh-largest in the world based on applicable 2021 revenues.[8] Its largest operations are in the United Kingdom and in the United States, where its BAE Systems Inc. subsidiary is one of the six largest suppliers to the US Department of Defense. Its next biggest markets are Saudi Arabia, then Australia; other major markets include Canada, Japan,[9][10] India, Turkey, Qatar, Oman and Sweden.[2] The company was formed on 30 November 1999 by the £7.7 billion purchase of and merger of Marconi Electronic Systems (MES), the defence electronics and naval shipbuilding subsidiary of the General Electric Company plc (GEC), with British Aerospace, an aircraft, munitions and naval systems manufacturer.

BAE is the successor to various aircraft, shipbuilding, armoured vehicle, armaments and defence electronics companies, including the Marconi Company, the first commercial company devoted to the development and use of radio; A.V. Roe and Company, one of the world's first aircraft companies; de Havilland, manufacturer of the Comet, the world's first commercial jet airliner; Hawker Siddeley, manufacturer of the Harrier, the world's first VTOL attack aircraft; British Aircraft Corporation, co-manufacturer of the Concorde supersonic transport; Supermarine, manufacturer of the Spitfire; Yarrow Shipbuilders, builder of the Royal Navy's first destroyers; Fairfield Shipbuilding and Engineering Company, builder of the world's first battlecruiser; and Vickers Shipbuilding and Engineering, builder of the Royal Navy's first submarines.

Since its 1999 formation, BAE has made a number of acquisitions, most notably of United Defense and Armor Holdings of the United States, and has sold its shares in Airbus, Astrium, AMS and Atlas Elektronik. It is involved in several major defence projects, including the Lockheed Martin F-35 Lightning II, the Eurofighter Typhoon, the Astute-class submarine, and the Queen Elizabeth-class aircraft carriers. BAE Systems is listed on the London Stock Exchange's FTSE 100 Index.

History

[edit]

Heritage

[edit]

Supermarine, the manufacturer of the Spitfire, was a predecessor company of BAE Systems. It was purchased by Vickers-Armstrongs, which itself was merged into the British Aircraft Corporation in 1960.

British Aerospace bought Marconi Electronic Systems for £7.7 billion on 30 November 1999 and merged with it to form BAE Systems.[11] The company is the successor to many of the most famous British aircraft, defence electronics and warship manufacturers. Predecessor companies built the Comet, the world's first commercial jet airliner; the Harrier "jump jet", the world's first operational vertical/short take-off and landing (VTOL) aircraft; the "groundbreaking"[12] Blue Vixen radar carried by Sea Harrier FA2s and which formed the basis of the Eurofighter's CAPTOR radar; and co-produced the Concorde supersonic airliner with Aérospatiale.[13]

British Aerospace was a civil and military aircraft manufacturer, as well as a provider of military land systems. The company had emerged from the massive consolidation of UK aircraft manufacturers since World War II. British Aerospace was formed on 29 April 1977, by the nationalisation and merger of the British Aircraft Corporation (BAC), the Hawker Siddeley Group and Scottish Aviation.[14] Both BAC and Hawker Siddeley were themselves the result of various mergers and acquisitions.[15]

Marconi Electronic Systems was the defence subsidiary of British engineering firm the General Electric Company (GEC), dealing largely in military systems integration, as well as naval and land systems. Marconi's heritage dates back to Guglielmo Marconi's Wireless Telegraph & Signal Company, founded in 1897.[16] GEC purchased English Electric (which included Marconi) in 1968 and thereafter used the Marconi brand for its defence businesses (as GEC-Marconi and later Marconi Electronic Systems). GEC's own defence heritage dates back to World War I, when its contribution to the war effort included radios and bulbs. World War II consolidated this position, as the company was involved in important technological advances, notably the cavity magnetron for radar.[17] Between 1945 and 1999, GEC-Marconi/Marconi Electronic Systems became one of the world's most important defence contractors. GEC's major defence related acquisitions included Associated Electrical Industries in 1967,[18] Yarrow Shipbuilders in 1985,[18] Plessey companies in 1989,[19] parts of Ferranti's defence business in 1990,[19] the rump of Ferranti when it went into receivership in 1993/1994, Vickers Shipbuilding and Engineering in 1995[20] and Kværner Govan in 1999.[21] In June 1998, MES acquired Tracor, a major American defence contractor, for £830 million (about US$1.4 billion).[22]

Formation

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The 1997 merger of American corporations Boeing and McDonnell Douglas, which followed the formation in 1995 of Lockheed Martin, the world's largest defence contractor, increased the pressure on European defence companies to consolidate. In June 1997, British Aerospace Defence managing director John Weston commented "Europe ... is supporting three times the number of contractors on less than half the budget of the U.S."[23] European governments wished to see the merger of their defence manufacturers into a single entity, a "European Aerospace and Defence Company".[24]

As early as 1995, British Aerospace and the German aerospace and defence company DaimlerChrysler Aerospace (DASA) were said to be keen to create a transnational aerospace and defence company.[25] The two companies envisaged including Aérospatiale, the other major European aerospace company, but only after its privatisation.[26] The first stage of this integration was seen as the transformation of Airbus from a consortium of British Aerospace, DASA, Aérospatiale and Construcciones Aeronáuticas SA into an integrated company; with this aim British Aerospace and DASA were united against the various objections of Aérospatiale.[27] As well as Airbus, British Aerospace and DASA were partners in the Panavia Tornado and Eurofighter Typhoon aircraft projects. Merger discussions began between British Aerospace and DASA in July 1998, just as French participation became more likely with the announcement that Aérospatiale was to merge with Matra and emerge with a diluted French government shareholding.[28] A merger was agreed between British Aerospace chairman Richard Evans and DASA CEO Jürgen Schrempp.[29]

Meanwhile, GEC was also under pressure to participate in defence industry consolidation. Reporting the appointment of George Simpson as GEC managing director in 1996, The Independent said "some analysts believe that Mr Simpson's inside knowledge of BAe, a long-rumoured GEC bid target, was a key to his appointment. GEC favours forging a national 'champion' defence group with BAe to compete with the giant US organisations."[30] When GEC put MES up for sale on 22 December 1998, British Aerospace abandoned the DASA merger in favour of purchasing its British rival. The merger of British Aerospace and MES was announced on 19 January 1999.[31] Evans stated in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.[29] The merger created a vertically integrated company which The Scotsman described as "[a combination of British Aerospace's] contracting and platform-building skills with Marconi's coveted electronics systems capability",[32] for example combining the manufacturer of the Eurofighter with the company that provided many of the aircraft's electronic systems; British Aerospace was MES's largest customer.[33] In contrast, DASA's response to the breakdown of the merger discussion was to merge with Aérospatiale to create the European Aeronautic Defence and Space Company (EADS), a horizontal integration.[34]

Seventeen undertakings were given by BAE Systems to the Department of Trade and Industry which prevented a reference of the merger to the Monopolies and Mergers Commission. These were largely to ensure that the integrated company would tender sub-contracts to external companies on an equal basis with its subsidiaries. Another condition was the "firewalling" of former British Aerospace and MES teams on defence projects such as the Joint Strike Fighter (JSF). In 2007 the government announced that it had agreed to release BAE Systems from ten of the undertakings due to "a change in circumstances".[35]

BAE Systems inherited the UK government-owned "golden" share that was established when British Aerospace was privatised. This unique share prevents amendments of certain parts of the company's Articles of Association without the permission of the Secretary of State.[14] These Articles require that no foreign person or persons acting together may hold more than 15% of the company's shares.[36]

2000s

[edit]

BAE Systems' first annual report identified Airbus, support services to militaries and integrated systems for air, land and naval applications as key areas of growth. It also stated the company's desire to both expand in the US and participate in further consolidation in Europe. BAE Systems described 2001 as an "important year" for its European joint ventures, which were reorganised considerably. The company has described the rationale for expansion in the US; "[it] is by far the largest defence market with spend running close to twice that of the Western European nations combined. Importantly, US investment in research and development is significantly higher than in Western Europe."[37] When Dick Olver was appointed chairman in July 2004 he ordered a review of the company's businesses which ruled out further European acquisitions or joint ventures and confirmed a "strategic bias" for expansion and investment in the US.[38] The review also confirmed the attractiveness of the land systems sector and, with two acquisitions in 2004 and 2005, BAE moved from a limited land systems supplier to the second largest such company in the world. This shift in strategy was described as "remarkable" by the Financial Times.[39] Between 2008 and early 2011 BAE acquired five cybersecurity companies in a shift in strategy to take account of reduced spending by governments on "traditional defence items such as warships and tanks".[40]

In 2000 Matra Marconi Space, a joint BAE Systems/Matra company, was merged with the space division of DASA to form Astrium. On 16 June 2003 BAE sold its 25% share of Astrium for £84 million, however due to the lossmaking status of the company, BAE Systems invested an equal amount for "restructuring".[41] BAE Systems sold its 54% majority share of BAE Systems Canada, an electronics company, in April for CA$310 (approx. £197 million as of December 2010).[42] In November 2001, the company announced the closure of the Avro Regional Jet (Avro RJ) production line at Woodford and the cancellation of the Avro RJX, an advanced series of the aircraft family, as the business was "no longer viable".[43] The final Avro RJ to be completed became the last British civil airliner. In November 2001 BAE sold its 49.9% share of Thomson Marconi Sonar to Thales for £85 million.[42] A further step of European defence consolidation was the merger of BAE's share of Matra BAe Dynamics and the missile division of Alenia Marconi Systems (AMS) into MBDA in December. MBDA thus became the world's second largest missile manufacturer.[44] Although EADS (now Airbus SE) was later reported to be interested in acquiring full control of MBDA, BAE said that, unlike Airbus, MBDA is a "core business".[45][46]

The Astute-class submarine project caused BAE to issue a profit warning in 2002 and invest £250 million to overcome its difficulties.

In June 2002, BAE Systems confirmed it was in takeover discussions with TRW, an American aerospace, automotive and defence business. This was prompted by Northrop Grumman's £4.1 billion (approx. US$6 billion c. 2002) hostile bid for TRW in February 2002. A bidding war between BAE Systems, Northrop and General Dynamics ended on 1 June when Northrop's increased bid of £5.1 billion was accepted. On 11 December 2002, BAE Systems issued a shock profit warning due to cost overruns of the Nimrod MRA4 maritime reconnaissance/attack aircraft and the Astute-class submarine projects.[47] On 19 February 2003 BAE took a charge of £750 million against these projects and the Ministry of Defence (MoD) agreed to pay a further £700 million of the cost.[48] In 2000 the company had taken a £300 million "loss charge" on the Nimrod contract which was expected to cover "all the costs of completion of the current contract".[49] The troubled Nimrod project would ultimately be cancelled as part of the 2010 Strategic Defence and Security Review (SDSR).[50]

The UK government, following a cabinet row described as "one of the most bitter Cabinet disputes over defence contracts since the Westland helicopter affair in 1985", ordered 20 BAE Hawk trainer aircraft with 24 options in July 2003 in a deal worth £800 million.[51] The deal was significant because it was a factor in India's decision to finalise a £1 billion order for 66 Hawks in March 2004.[51][52] Also in July 2003 BAE Systems and Finmeccanica announced their intention to set up three joint venture companies, to be collectively known as Eurosystems. These companies would have pooled the avionics, C4ISTAR and communications businesses of the two companies.[53] However the difficulties of integrating the companies in this way led to a re-evaluation of the proposal; BAE Systems' 2004 Annual Report states that "recognising the complexity of the earlier proposed Eurosystems transaction with Finmeccanica we have moved to a simpler model". The main part of this deal was the dissolution of AMS and the establishment of SELEX Sensors and Airborne Systems; BAE Systems sold its 25% share of the latter to Finmeccanica for €400 million (approx. £270 million c. 2007) in March 2007.[54]

In May 2004, it was reported that the company was considering selling its shipbuilding divisions, BAE Systems Naval Ships and BAE Systems Submarines. It was understood that General Dynamics wished to acquire the submarine building facilities at Barrow-in-Furness, while VT Group was said to be interested in the remaining yards on the Clyde.[55] Instead, in 2008 BAE Systems merged its Surface Fleet arm with the shipbuilding operations of VT Group to form BVT Surface Fleet, an aim central to the British Government's Defence Industrial Strategy.[56][57]

BAE's £2.5 billion purchase of United Defense in 2005 added the M2/M3 Bradley family of armoured vehicles to its product line.

On 4 June 2004, BAE Systems outbid General Dynamics for Alvis Vickers, the UK's main manufacturer of armoured vehicles.[58] Alvis Vickers was merged with the company's RO Defence unit to form BAE Systems Land Systems. Recognising the lack of scale of this business compared to General Dynamics, BAE Systems executives soon identified the US defence company United Defense Industries (UDI), a major competitor to General Dynamics, as a main acquisition target.[39] On 7 March 2005 BAE announced the £2.25 billion (approx. US$4.2 billion c. 2005) acquisition of UDI.[59] UDI, now BAE Systems Land and Armaments, manufactures combat vehicles, artillery systems, naval guns, missile launchers and precision guided munitions.[60]

In December 2005, BAE Systems announced the sale of its German naval systems subsidiary, Atlas Elektronik, to ThyssenKrupp and EADS. The Financial Times described the sale as "cut price" because French company Thales bid €300 million, but was blocked from purchasing Atlas by the German government on national security grounds.[61] On 31 January 2006 the company announced the sale of BAE Systems Aerostructures to Spirit AeroSystems, Inc.[62] having said as early as 2002 that it wished to dispose of what it did not regard as a "core business".[63]

On 18 August 2006 Saudi Arabia signed a contract worth £6 billion to £10 billion for 72 Eurofighter Typhoons, to be delivered by BAE Systems.[64] On 10 September 2006 the company was awarded a £2.5 billion contract for the upgrade of 80 Royal Saudi Air Force Tornado IDSs.[65] One of BAE Systems' major aims, as highlighted in the 2005 Annual Report, was the granting of increased technology transfer between the UK and the US. The F-35 (JSF) programme became the focus of this effort, with British government ministers such as Lord Drayson, Minister for Defence Procurement, suggesting the UK would withdraw from the project without the transfer of technology that would allow the UK to operate and maintain F-35s independently. On 12 December 2006, Lord Drayson signed an agreement which allows "an unbroken British chain of command" for operation of the aircraft.[66] On 22 December 2006 BAE received a £947 million contract to provide guaranteed availability of Royal Air Force (RAF) Tornados.[67]

In May 2007 the company announced its subsidiary BAE Systems Inc. was to purchase Armor Holdings for £2.3 billion (approx. US$4.5 billion c. 2007) and completed the deal on 31 July 2007.[68][69] The company was a manufacturer of tactical wheeled vehicles and a provider of vehicle and individual armour systems and survivability technologies.[68] BAE Systems (and British Aerospace previously) was a technology partner to the McLaren Formula One team from 1996 to December 2007.[70][71] The partnership originally focused on McLaren's F1 car's aerodynamics, eventually moving on to carbon fibre techniques, wireless systems and fuel management. BAE Systems' main interest in the partnership was to learn about the high speed build and operations processes of McLaren.[70]

The company announced the acquisition of Tenix Defence, a major Australian defence contractor in January 2008. The purchase was completed on 27 June for A$775 million (£373 million) making BAE Systems Australia that country's largest defence contractor.[72] The MoD awarded BAE Systems a 15-year munitions contract in August 2008 worth up to £3 billion, known as Munition Acquisition Supply Solution (MASS). The contract guaranteed supply of 80% of the UK Armed Forces' ammunition and required BAE to modernise its munitions manufacturing facilities.[73] BAE Systems expanded its intelligence and security business with the £531 million purchase of Detica Group in July 2008.[74] It continued this strategy with purchases of Danish cyber and intelligence company ETI for approximately $210 million in December 2010, and Norkom Group PLC the following month for €217 million. The latter provides counter fraud and anti-money laundering solutions to the global financial services industry where its software assists institutions to comply with regulations on financial intelligence and monitoring.[75][76]

Airbus shareholding

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Main article: Airbus

BAE Systems inherited British Aerospace's share of Airbus Industrie, which consisted of two factories at Broughton and Filton. These facilities manufactured wings for the Airbus family of aircraft. In 2001 Airbus was incorporated as Airbus SAS, a joint stock company. In return for a 20% share in the new company BAE Systems transferred ownership of its Airbus plants (known as Airbus UK) to the new company.[77]

Despite repeated suggestions as early as 2000 that BAE Systems wished to sell its 20% share of Airbus, the possibility was denied by the company.[11][78] However, on 6 April 2006 it was reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion.[79] Due to the slow pace of informal negotiations, BAE Systems exercised its put option which saw investment bank Rothschild appointed to give an independent valuation. Six days after this process began, Airbus announced delays to the A380 with significant effects on the value of Airbus shares. On 2 June 2006 Rothschild valued the company's share at £1.87 billion, well below its own analysts' and even EADS's expectations.[80] The BAE Systems board recommended that the company proceed with the sale. Shareholders voted in favour and the sale was completed on 13 October.[81] This saw the end of UK-owned involvement in civil airliner production. Airbus Operations Ltd (the former Airbus UK) continues to be the Airbus "Centre of Excellence" for wing production, employing over 9,500.[82]

2010s

[edit]

In February 2010 BAE Systems announced a £592 million writedown of the former Armor Holdings business following the loss of the Family of Medium Tactical Vehicles contract in 2009.[83] It was outbid by Oshkosh Corporation for the £2.3 billion ($3.7 billion) contract.[84] Land and Armaments had been the "star performer" of BAE Systems' subsidiaries, growing from sales of £482 million in 2004 to £6.7 billion in 2009.[85][86][87]

BAE Systems inherited British Aerospace's 35% share of Saab AB, with which it produced and marketed the Gripen fighter aircraft. In 2005 it reduced this share to 20.5% and in March 2010 announced its intention to sell the remainder. The Times stated that the decision brought "to an end its controversial relationship with the Gripen fighter aircraft".[88] Several of the export campaigns for the aircraft were subject to allegations of bribery and corruption.[88]

The company continued its move into support services in May 2010 with the purchase of the marine support company Atlantic Marine for $352 million.[89] In September 2010 BAE Systems announced plans to sell the Platform Solutions division of BAE Systems Inc., which the Financial Times estimated could yield as much as £1.3 billion. Despite "considerable expressions of interest", the sale was abandoned in January 2011.[89][90] The purchases of Queen Elizabeth-class aircraft carriers, the Astute-class submarines, and the Type 26 frigates were all confirmed in the 2010 SDSR.[91] A new generation of nuclear missile submarines, the Dreadnought-class, was ordered in 2016.[92]

BAE Systems sold the regional aircraft leasing and asset management arm of its Regional Aircraft business in May 2011. This unit leases the BAe 146/Avro RJ family, BAe ATP, Jetstream and BAe 748. The company retained the support and engineering activities of the business.[93] In September 2011, BAE Systems began consultation with unions and workers over plans to cut nearly 3,000 jobs, mostly in the company's military aircraft division.[94]

In its 2012 half-year report, the company revealed a 10% decline in revenue in the six months up to 30 June due to falling demand for armaments.[95] In May 2012 the governments of the UK and Saudi Arabia reached an agreement on an arms package which saw a £1.6 billion contract awarded to BAE for the delivery of 55 Pilatus PC-21 and 22 BAE Systems Hawk aircraft.[96] The Sultanate of Oman ordered Typhoon and Hawk aircraft worth £2.5 billion in December 2012.[97]

In September 2012, it was reported that BAE Systems and EADS had entered merger talks which would have seen BAE shareholders own 40% of the resulting organisation.[98][99] On 10 October 2012, the companies said the merger talks had been called off.[100] The Guardian reported that this was due to the German Government's concern about the "potential size of the French shareholding in the combined company, as well as disagreements over the location of the group's headquarters".[101]

In November 2013, BAE Systems announced that shipbuilding would cease in Portsmouth in 2014 with the loss of 940 jobs, and a further 835 jobs would be lost at Filton, near Bristol, and at the shipyards in Govan, Rosyth, and Scotstoun in Scotland.[102] On 9 October 2014, the company announced the loss of 440 management jobs across the country, with 286 of the job cuts in Lancashire.[103][104]

In July 2014 it announced the acquisition of US intelligence company Signal Innovations Group Inc. to augment imagery and data analysis technologies in its Intelligence & Security business.[105] In August 2014, BAE was awarded a £248 million contract from the British government to build three new offshore patrol vessels.[106] In October 2014, BAE Systems won a £600 million contract from the MoD to maintain Portsmouth naval base for five years.[107] During 2014 BAE Systems acquired US-based cybersecurity firm Silversky for $232.5 million.[108]

During Prime Minister Theresa May's visit to Turkey in January 2017, BAE and TAI officials signed an agreement, worth about £100 million, for BAE to provide assistance in developing the TAI TF Kaan aircraft.[109] On 10 October 2017, BAE announced that it would lay off nearly 2,000 out of its approximately 35,000 employees in Britain, mainly due to an order shortage for the Typhoon fighter.[6]

In 2019 BAE Systems sold a 55% share of its UK land business to Rheinmetall. The resultant joint venture (JV), Rheinmetall BAE Systems Land (RBSL), was established in July 2019 following regulatory approval and is headquartered at the existing facility in Telford, Shropshire.[110]

2020s

[edit]

In August 2020 BAE Systems completed the purchase of United Technologies' military GPS businesses for $1.9 billion and Raytheon's military airborne radios business for $275 million. The sale of these two business was a condition of the merger approval that saw their two parent companies merge to form Raytheon Technologies.[111]

In November 2020, the MoD announced the award of a 20-year, £2.4 billion munitions contract to BAE. This will see BAE manufacture 39 different munitions for the UK armed forces and supersedes the 2008 MASS contract.[112]

In 2022, during the Russian invasion of Ukraine, major arms manufacturers, including BAE Systems,[113] reported a sharp increase in interim sales and profits.[114][115]

In August 2023 BAE agreed to acquire the aerospace division of US-based Ball Corporation for $5.6 billion in cash (approximately £4.5 billion); this was BAE's largest acquisition up until that point.[116] In October 2023, BAE was awarded a £3.95 billion contract for development work on Aukus-class submarines up to 2028.[117] The deal with Ball was closed on 16 February 2024.[118]

Products

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BAE Systems Maritime – Naval Ships built the Type 45 destroyer. Other subsidiaries of BAE supplied the naval gun and SAMPSON and S1850M radars for the class

BAE Systems plays a significant role in the production of military equipment. In 2017, 98% of BAE Systems' total sales were military related.[119][120]

It plays important roles in military aircraft production. The company's Typhoon fighter is one of the main front line aircraft of the RAF.[121] The company is a major partner in the F-35 Lightning II programme.[122] Its Hawk advanced jet trainer aircraft has been widely exported.[123] In July 2006, the British government declassified the HERTI (High Endurance Rapid Technology Insertion), an Unmanned Aerial Vehicle (UAV) which can navigate autonomously.[124] It is currently developing a sixth-generation jet fighter aircraft for the RAF marketed as the "Tempest" along with the MoD, Rolls-Royce, Leonardo and MBDA. It is intended to enter service from 2035 replacing the Typhoon aircraft in service with the RAF.[125]

BAE Systems Land and Armaments manufactures the M2/M3 Bradley fighting vehicle family, the US Navy Advanced Gun System (AGS), M113 armoured personnel carrier (APC), M109 Paladin, Archer, M777 howitzer, the British Army's Challenger 2, Warrior Tracked Armoured Vehicle, Panther Command and Liaison Vehicle, and the SA80 assault rifle.[126]

Major naval projects include the Astute-class submarines, Type 26 frigates and Dreadnought-class submarines.[127]

BAE Systems is indirectly engaged in production of nuclear weapons – through its share of MBDA it is involved with the production and support of the ASMP missile, an air-launched nuclear missile which forms part of the French nuclear deterrent.[128] The company is also the UK's only nuclear submarine manufacturer and thus produces a key element of the United Kingdom's nuclear weapons capability.[129]

BAE has operated the Holston Army Ammunition Plant in Tennessee, since 1999, and the Radford Army Ammunition Plant in Radford, Virginia since 2012.[130]

Areas of business

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BAE Systems' biggest markets are the US 44%, UK 20%, Saudi Arabia 11% and Australia 4%, as of 2022.[2]

United Kingdom

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BAE Systems is the main supplier to the UK MoD; in 2009/2010 BAE Systems companies in the list of Top 100 suppliers to the MoD received contracts totalling £3.98 billion, with total revenue being higher when other subsidiary income is included.[131] In comparison, the second largest supplier is Babcock International Group and its subsidiaries, with a revenue of £1.1 billion from the MoD. Oxford Economic Forecasting states that in 2002 the company's UK businesses employed 111,578 people, achieved export sales of £3 billion and paid £2.6 billion in taxes. These figures exclude the contribution of Airbus UK.[132]

After its creation, BAE Systems had a difficult relationship with the MoD. This was attributed to deficient project management by the company, but also in part to the deficiencies in the terms of "fixed price contracts". CEO Mike Turner said in 2006 "We had entered into contracts under the old competition rules that frankly we shouldn't have taken".[133] These competition rules were introduced by Lord Levene during the 1980s to shift the burden of risk to the contractor and were in contrast to "cost plus contracts" where a contractor was paid for the value of its product plus an agreed profit.[134]

BAE Systems was operating in "the only truly open defence market",[135] which meant it was competing with US and European companies for British defence projects, while they were protected in their home markets. The US defence market is competitive, however largely between American firms, while foreign companies are excluded. In December 2005 the MoD published the Defence Industrial Strategy (DIS) which has been widely acknowledged to recognise BAE Systems as the UK's "national champion".[136] The government claimed the DIS would "promote a sustainable industrial base, that retains in the UK those industrial capabilities needed to ensure national security."[137]

After the publication of the DIS BAE Systems CEO Mike Turner said "If we didn't have the DIS and our profitability and the terms of trade had stayed as they were... then there had to be a question mark about our future in the UK".[138] Lord Levene said in the balance between value for money or maintaining a viable industrial base the DIS "tries as well as it can to steer a middle course and to achieve as much as it can in both directions. ...We will never have a perfect solution."[139]

United States

[edit]

Main article: BAE Systems Inc.

The attraction of MES to British Aerospace was largely its ownership of Tracor, a major American defence contractor.[140]

BAE Systems Inc. now sells more to the US Department of Defense (DOD) than to the UK MoD.[141] The company has been allowed to buy important defence contractors in the US, however its status as a UK company requires that its US subsidiaries are governed by American executives under Special Security Arrangements. The company faces fewer impediments in this sense than its European counterparts, as there is a high degree of integration between the US and UK defence establishments. BAE Systems' purchase of Lockheed Martin Aerospace Electronic Systems in November 2000 was described by John Hamre, CEO of the Center for Strategic and International Studies and former Deputy Secretary of Defense, as "precedent setting" given the advanced and classified nature of many of that company's products.[142]

The possibility of a merger between BAE Systems Inc. and major North American defence contractors has long been reported, including Boeing, General Dynamics, Lockheed Martin, and Raytheon.[55][143][144]

Rest of the world

[edit]

BAE Systems Australia is one of the largest defence contractors in Australia, having more than doubled in size with the acquisition of Tenix Defence in 2008.[145] The Al Yamamah agreements between the UK and Saudi Arabia require "the provision of a complete defence package for the Kingdom of Saudi Arabia"; BAE Systems employs 5,300 people in the country.[146] As of March 2022, BAE Systems employs over 7,000 people in Saudi Arabia and 75 per cent of the employees are Saudi nationals.[147] BAE Systems' interests in Sweden are a result of the purchases of Alvis Vickers and UDI, which owned Hägglunds and Bofors respectively; the companies are now part of BAE Systems AB.[148]

On 6 April 2022, BAE Systems announced the establishment of BAE Systems Japan, a subsidiary located in Akasaka, Tokyo, Japan. The new company will provide comprehensive cooperation with Japanese industry and aims to strengthen relations with the Japanese Ministry of Defense and the Japan Self-Defense Forces.[149]

In late August 2023, BAE Systems announced that it had opened an office in Ukraine, and had signed an agreement for cooperation on the repair, spare parts, and production of L119 howitzers within Ukraine.[150]

On 4 January 2024, BAE Systems announced an initial agreement, potentially worth up to $50 million, to resume production of titanium structures for the M777 howitzer for the U.S. Army, with the first deliveries expected in 2025.[151]

Shareholders

[edit]

BAE Systems' 2022 Annual Report listed the following as "significant" shareholders: Barclays 3.98%, BlackRock 9.90%, Capital Group Companies 14.18%, Invesco 4.97% and Silchester International Investors 3.01%.[2]

Organisation

[edit]

BAE Systems has offices in the Farnborough Aerospace Centre business park. Senior managers are based at the registered office in Carlton Gardens, City of Westminster.

6 Carlton Gardens, London

BAE Systems has its head office and its registered office in City of Westminster, London.[152][153] In addition to its central London offices, it has an office in Farnborough, Hampshire, that houses functional specialists and support functions.[154]

Corporate governance

[edit]

BAE Systems' Chair is Cressida Hogg, CBE. The executive directors are Charles Woodburn (CEO), Brad Greve and Tom Arsenault. The non-executive directors are Crystal E. Ashby, Elizabeth Corley, Chris Grigg, Ewan Kirk, Ian Tyler, Nicole Piasecki, Stephen Pearce, Jane Griffiths and Nick Anderson.[155]

The company's first CEO, John Weston, was forced to resign in 2002 in a boardroom "coup" and was replaced by Mike Turner.[156] The Business reported that Weston was ousted when non-executive directors informed the chairman that they had lost confidence in him. Further, it was suggested that at least one non-executive director was encouraged to make such a move by the MoD due to the increasingly fractious relationship between BAE Systems and the government.[157] As well as the terms of the Nimrod contract, Weston had fought against the MOD's insistence that one of the first three Type 45 destroyers should be built by VT Group. The Business said he considered this "competition-policy gone mad".[158]

It is understood that Turner had a poor working relationship with senior MoD officials, for example with former Defence Secretary Geoff Hoon. The first meeting between Oliver and Hoon was said to have gone well; a MoD official commented "He is a man we can do business with".[159] It has been suggested that relations between Turner and Olver were tense.[160] On 16 October 2007 the company announced that Mike Turner would retire in August 2008. The Times called his departure plans "abrupt" and a "shock", given previous statements that he wished to retire in 2013 at the age of 65.[161] Despite suggestions that BAE Systems would prefer an American CEO due to the increasing importance of the United States defence market to the company and the opportunity to make a clean break from corruption allegations and investigations related to the Al-Yamamah contracts, the company announced on 27 June 2008, that it had selected the company's chief operating officer, Ian King, to succeed Turner with effect from 1 September 2008. The Financial Times noted that King's career at Marconi distances him from the British Aerospace-led Al Yamamah project.[162]

Charles Woodburn succeeded Ian King as CEO on 1 July 2017. Woodburn joined BAE Systems in May 2016 as Chief Operating Officer and Executive Board Director following over 20 years' international experience in senior management positions in the oil and gas industry.[163]

Senior leadership

[edit]

• Chair: Cressida Hogg (since 2023)

[155]

• Chief Executive: Charles Woodburn (since 2017)

[155]

List of former chairmen

[edit]

1. Sir Richard Evans (1999–2004)

[29]

2. Sir Dick Olver (2004–2014)

[39]

3. Sir Roger Carr (2014-2023)

[155]

List of former chief executives

[edit]

1. John Weston (1999–2002)

[156]

2. Michael Turner (2002–2008)

[156]

3. Ian King (2008–2017)

[163]

Financial information

[edit]

Financial information for the company is as follows:[2][85][87][164][165][166]

Corruption investigations

[edit]

Serious Fraud Office

[edit]

BAE Systems has been investigated by the Serious Fraud Office (SFO) for the use of corruption to help sell arms to Chile, Czech Republic, Romania, Saudi Arabia, South Africa, Tanzania and Qatar.[167][168][169] In response, BAE Systems' 2006 Corporate Responsibility Report states "We continue to reject these allegations... We take our obligations under the law extremely seriously and will continue to comply with all legal requirements around the world.[170] In June 2007 Lord Woolf was selected to lead what the BBC described as an "independent review.... [an] ethics committee to look into how the defence giant conducts its arms deals".[171] The report, Ethical business conduct in BAE Systems plc – the way forward, made 23 recommendations, measures which the company committed to implement. The finding stated that "in the past BAE did not pay sufficient attention to ethical standards in the way it conducted business", and was described by the BBC as "an embarrassing admission".[172]

In September 2009, the SFO announced that it intended to prosecute BAE Systems for offences relating to overseas corruption. The Guardian claimed that a penalty more than £500 million might be an acceptable settlement package.[173] On 5 February 2010, BAE Systems agreed to pay criminal fines of £257 million (US$400 million) to the US and £30 million to the UK.[174] The $400 million fine was a result of a plea bargain with the US Department of Justice (DOJ) whereby BAE Systems was convicted of felony conspiracy to defraud the United States government. This was one of the largest fines in the history of the DOJ. Judge Bates said the company's conduct involved "deception, duplicity and knowing violations of law, I think it's fair to say, on an enormous scale".[175][176] BAE Systems did not directly admit to bribery, and is thus not internationally blacklisted from future contracts. Some of the £30 million penalty the company will pay in fines to the UK will be paid ex gratia for the benefit of the people of Tanzania.[177] On 2 March 2010, Campaign Against Arms Trade (CAAT) and Corner House Research were successful in gaining a High Court injunction on the SFO's settlement with BAE Systems; however in April 2010 the two organisations withdrew their application for a judicial review.[178]

Saudi Arabia

[edit]

One of 24 Panavia Tornado ADVs delivered to the Royal Saudi Air Force as part of the Al Yamamah arms sales.

Main article: Al-Yamamah arms deal

Both BAE Systems and its predecessor (BAe) have long been the subject of allegations of bribery in relation to its business in Saudi Arabia. The UK National Audit Office (NAO) investigated the Al Yamamah contracts and has so far not published its conclusions, the only NAO report ever to be withheld.[179] The MoD has stated "The report remains sensitive. Disclosure would harm both international relations and the UK's commercial interests."[180] The company has been accused of maintaining a £60 million Saudi slush fund. In November 2006, Saudi Arabia put pressure on the British government to end the SFO investigation by suspending negotiations over a new deal for seventy-two Typhoon fighter jets.[181] On 14 December 2006 it was announced that the SFO was "discontinuing" its investigation into the company. It stated that representations to its director and the Attorney General Lord Goldsmith had led to the conclusion that the wider public interest "to safeguard national and international security" outweighed any potential benefits of further investigation.[182] The termination of the investigation has been controversial.[183] In June 2007, the BBC's Panorama alleged BAE Systems "paid hundreds of millions of pounds to the ex-Saudi ambassador to the US, Prince Bandar bin Sultan" in return for his role in the Al Yamamah deals.[184] In late June 2007 the DOJ began a formal investigation into BAE's compliance with anti-corruption laws.[185] On 19 May 2008 BAE Systems confirmed that its CEO Mike Turner and non-executive director Nigel Rudd had been detained "for about 20 minutes" at two US airports the previous week and that the DOJ had issued "a number of additional subpoenas in the US to employees of BAE Systems plc and BAE Systems Inc as part of its ongoing investigation".[186] The Times suggested that such "humiliating behaviour by the DOJ" is unusual toward a company that is co-operating fully.[186]

A judicial review of the decision by the SFO to drop the investigation was granted on 9 November 2007.[187] On 10 April 2008 the High Court ruled that the SFO "acted unlawfully" by dropping its investigation.[188] The Times described the ruling as "one of the most strongly worded judicial attacks on government action" which condemned how "ministers 'buckled' to 'blatant threats' that Saudi cooperation in the fight against terrorism would end unless the ...investigation was dropped."[189] On 24 April the SFO was granted leave to appeal to the House of Lords against the ruling.[190] There was a two-day hearing before the Lords on 7 and 8 July 2008.[191] On 30 July the House of Lords unanimously overturned the High Court ruling, stating that the decision to discontinue the investigation was lawful.[192]

Others

[edit]

HMS Coventry was one of two frigates sold to Romania.

In September 2005 The Guardian reported that banking records showed that BAE Systems paid £1 million to Augusto Pinochet, the former Chilean dictator.[193] The Guardian has also reported that "clandestine arms deals" have been under investigation in Chile and the UK since 2003 and that British Aerospace and BAE Systems made a number of payments to Pinochet advisers.[194]

BAE Systems is alleged to have paid "secret offshore commissions" of over £7 million to secure the sale of HMS London and HMS Coventry to the Romanian Navy. The company received a £116 million contract for the refurbishment of the ships prior to delivery;[195] however the British taxpayer only received the scrap value of £100,000 each from the sale.[196]

BAE Systems ran into controversy in 2002 over the abnormally high cost of a radar system sold to Tanzania.[197][198] The sale was criticised by several opposition MPs and the World Bank;[199] Secretary of State for International Development Clare Short declared that BAE Systems had "ripped off" developing nations.[200][201]

In January 2007, details of an investigation by the SFO into BAE Systems' sales tactics in regard to South Africa were reported, highlighting the £2.3 billion deal to supply Hawk trainers and Gripen fighters as suspect.[202] In May 2011, as allegations of bribery behind South Africa's Gripen procurement continued, the company's partner Saab AB issued strong denials of any illicit payments being made; however in June 2011 Saab announced that BAE Systems had made unaccounted payments of roughly $3.5 million to a consultant; this revelation prompted South African opposition parties to call for a renewed inquiry.[203][204] The Gripen's procurement by the Czech Republic was also under investigation by the SFO in 2006 over allegations of bribery.[205]

Criticism

[edit]

Espionage

[edit]

In September 2003 The Sunday Times reported that BAE Systems had hired a private security contractor to collect information about individuals working at CAAT and their activities.[206][207] In February 2007, it was reported that the corporation had again obtained private confidential information from CAAT.[208]

The company was reported in 2012 to have been the target of Chinese cyber espionage that may have stolen secrets related to the F-35 Lightning II.[209]

Cluster bombs

[edit]

In 2003, BAE Systems was criticised for its role in the production of cluster bombs, due to the long-term risk for injury or death to civilians. Following the 2008 Oslo Convention on Cluster Munitions BAE Systems was among the first defence contractors to stop their manufacture[210][211] and by 2012 the majority of the munitions had been destroyed.[212]

Saudi war in Yemen

[edit]

Main article: Saudi Arabian–led intervention in Yemen

Saudi Arabia is BAE's third biggest market.[213] The Independent reported that BAE-supplied aircraft were used to bomb Red Cross and MSF hospitals in Yemen."[214] Sir Roger Carr rejected criticism over BAE's continued work in Saudi Arabia, saying "We will stop doing it when they tell us to stop doing it... We maintain peace by having the ability to make war and that has stood the test of time."[215] BAE Systems sold weaponry worth £17.6 billion to Saudi Arabia during the Yemen war.[216]

Israel's war in Gaza

[edit]

Direct action was taken against arms companies in the United Kingdom, including BAE Systems, that supplied weapons to Israel during the 2023 Israel–Hamas war. For instance, on 10 November 2023, trade unionists in Rochester, Kent, blocked the entrances to a BAE Systems factory, stating the facility manufactured military aircraft components used to bomb the Gaza Strip.[217]

Political influence and donations

[edit]

Former Foreign Secretary Robin Cook said of his time in office that he "came to learn that the chairman of BAE appeared to have the key to the garden door to number 10. Certainly I never knew No 10 to come up with any decision which would be incommoding to BAE."[218]

In the United States BAE Systems is a significant political donor to both Democratic and Republican candidates and organisations.[219] In 2016 its political action committee (PAC) contributions were the second largest of any foreign corporation after UBS.[220] In January 2021 following the 2021 United States Capitol attack BAE Systems announced that it was suspending political donations in the US. On 30 March it once again began making large political contributions, including one to the National Republican Senatorial Committee.[221]

See also

[edit]

• Aerospace industry in the United Kingdom

[edit]

Further reading

[edit]

• Hartley, Keith. The Political Economy of Aerospace Industries: A Key Driver of Growth and International Competitiveness? (Edward Elgar, 2014); 288 pages; the industry in Britain, continental Europe, and the US with a case study of BAE Systems.

External links

[edit]

Wikimedia Commons has media related to BAE Systems.

• Official website

51°16′25″N 0°46′00″W / 51.27361°N 0.76667°W

The BAE Systems Nimrod MRA4 was a planned maritime patrol and attack aircraft intended to replace the Hawker Siddeley Nimrod MR2. The rebuilt aircraft would have extended the operating life of the Nimrod fleet by several decades and significantly improved the aircraft by installing more efficient Rolls-Royce BR700 turbofan jet engines to almost double the flight range. The conversion of the flight deck to a digital glass cockpit would have simplified control operations and reduced crew requirements. New detection systems were to be installed, as well as additional weapons for anti-submarine warfare.

However, the project was subject to significant delays due to cost overruns and contract re-negotiations. This was partly due to difficulties combining refurbished Nimrod MR2 fuselages, which had not been built to a common standard, with newly built wings. The numbers of aircraft to be procured fell from twenty-one to nine over a course of years, while costs continued to climb.

The MRA4 was ultimately cancelled in 2010 as a result of the Strategic Defence and Security Review (SDSR), at which point it was £789 million over-budget and over nine years late. No direct replacement was under development at that stage, with the roles intended for the MRA4 filled by existing assets such as the Type 23 Frigate and the Merlin helicopter. However the UK announced its intention to order nine P-8 Poseidon ASW aircraft as part of the 2015 SDSR at a cost of £3 billion; these aircraft were delivered between October 2019 and January 2022 and operate from RAF Lossiemouth in Scotland.

Development

[edit]

Origins

[edit]

In 1990 the UK abandoned options for avionics, sensors and tactical system upgrades of the MR2.[3] In 1993 the RAF issued a request for information for a Replacement Maritime Patrol Aircraft (RMPA) procurement programme, also known as Staff Requirement (Air) 420, which was intended to replace their fleet of Nimrod MR2 aircraft.[3] In response to the requirement, several different companies soon submitted their bids to meet the outlined demands.[3] British Aerospace (BAe), which had studied prospective options to replace the Nimrod MR2 since 1986, including a variant of the Airbus A310 and other civil conversion projects, ultimately settled on a proposal that involved an extensive rebuild of existing Nimrod MR2s marketed under the name Nimrod 2000. As well as operational performance, the key criteria were cost and a short procurement timescale; these "ruled out a new design or adaption of an existing civil aircraft."[4]

BAe evaluated several different engines to power the Nimrod 2000, such as the Rolls-Royce Tay turbofan, the Pratt & Whitney JT8D-200 turbofan, and the General Electric CF34 turbofan,[5] before settling upon the Rolls-Royce BR710 engine. In 1995, it was claimed that the Nimrod MR2 airframes were of a sufficient condition in that they could readily serve through the intended 25-year service life and that "retained airframe items are low risk".[6] According to BAe, the Nimrod's airframe represented "probably the best understood airframe in the RAF inventory".[3]

Amongst various other bids submitted were Lockheed Corporation, which marketed its P-3 Orion as the Orion 2000, Loral Corporation proposed to rebuild ex-US Navy Orions, and Dassault which sought to develop the improved Atlantique 3.[3][6][7] On 12 January 1996, Dassault announced that they had withdrawn their Atlantique 3 following discussions with the MOD; Whitehall sources stated that Dassault had found "...no value in pursuing its tender", and that the RAF had an expressed preference for a four-engine aircraft.[8]

In March 1996, BAe promoted the option of establishing a production line to manufacture new-build Nimrod aircraft as an alternative to the refurbishment of existing airframes, which was reportedly motivated by service concerns regarding attrition rates of the existing aircraft.[9] It was also announced that preliminary talks had been conducted with the South African Air Force on the topic of the Nimrod 2000.[9] In June 1996, BAe announced that it had partnered with McDonnell Douglas to market new-build Nimrod 2000s to the export market; it has been claimed that this move was in response to scepticism from the MoD over the prospects of export sales for the type.[10] BAe argued that the Nimrod 2000's selection would give it entry to the global maritime patrol aircraft market.[3]

As part of Lockheed's submission, the firm offered a formal guarantee of a 20 per cent workshare on all future export sales of its Orion 2000 while simultaneously lobbying for the US Navy to also procure the type.[7] Loral stated that it believed that its bid to refurbish stored P-3s was the most cost-effective submission; however, there was public controversy over whether Loral possessed the necessary technical information on the airframe, claims which Loral refuted.[3] In early 1996, Loral's defense assets were acquired by Lockheed, leaving just the latter and British Aerospace in the competition by mid-1996.[8] In May 1996, it was reported that bidders were considering self-funding their own early development costs in order to compensate for alleged funding shortfalls within the MoD's procurement budget; it was claimed that these funding shortfalls were due to differences between the original specification, which had envisioned as an off-the-shelf procurement without much in terms of development, and the increasingly extensive nature that the programme had progressively taken on.[11]

Selection

[edit]

In June 1996, the MoD's Equipment Approvals Committee recommended that the Nimrod 2000 bid be selected to meet the RAF's requirement.[12] In July 1996, in response to the committee's decision, Lockheed Martin announced that it had reduced the cost of its Orion 2000 submission by 15 per cent amid a series of last-minute discussions held between Lockheed Martin President Norman R. Augustine, General Electric Company President Lord Weinstock, Secretary of State for Defence Michael Portillo and Deputy Prime Minister Michael Heseltine, seeking a 90-day interval to fully revise their bid.[13] In July 1996, it was announced that the £2 billion contract had been awarded to British Aerospace to produce the Nimrod 2000.[14] By the time of formal contract award in December the aircraft had received the designation Nimrod MRA4.[15]

The Nimrod MRA4 was to be produced as essentially a new aircraft. Significant changes were involved in the remanufacturing process, including the installation of BR710 turbofan engines, the adoption of a larger and more efficient wing with 23% greater surface area, various new missions systems and avionics, and an extensively refurbished fuselage.[3][16] Much larger air intakes were required on the MRA4 in order to provide the necessary airflow requirements imposed by the BR710 engine, which is significantly greater than that of the Spey 250 that had powered the original Nimrod variants.[6] The larger wing increased fuel capacity by 30% which, combined with efficient modern engines, allowed for unrefuelled endurance in excess of 14 hours.[4] The MRA4 had also borrowed heavily from Airbus technology; the glass cockpit used was derived from that used on Airbus A320/A340 airliners.[17] BAe also teamed up with Boeing to provide the Nimrod MRA4's mission systems, making use of the latter's work on mooted patrol aircraft systems for the P-3 and Boeing 737.[3][6]

According to BAE Systems, the Nimrod MRA4's systems would enable the crews to gather, process and display up to 20 times more technical and strategic data than the MR2. The Searchwater 2000 MR radar was stated to have been capable over land as well as water; with the ability to have swept an area the size of the UK every 10 seconds.[18] The Aircraft Synthetic Training Aids (ASTA) provided by Thales Training & Simulation was an electronic training suite to allow the training of crew members to transfer from active MRA4 aircraft to ground-based training systems; this change was made to increase the availability of the aircraft for operational missions and allow for more intensive training exercises.[19]

Delays and development problems

[edit]

The original scheduled date of entry into service for the MRA4 was April 2003; however, development proved far more protracted than anticipated.[20][21] Early on, an independent company, Flight Refuelling Ltd., had been contracted to undertake the conversions to MRA4 standard, however BAE discovered that the Nimrod airframes supplied by the RAF were not built to a common standard and this considerably complicated the refurbishment process. The task of converting the existing airframes was transferred in-house to BAE Systems Woodford.[22][23] The BAE team at Woodford then found that the new wing was flawed, which resulted in the project being put on hold while another wing design was developed.[22]

In December 2002, BAE Systems issued a shock profit warning due to cost overruns of the Nimrod MRA4 and the Astute-class submarine projects.[24] On 19 February 2003, BAE took a charge of £500 million against the MRA4 contract.[25] The company had previously taken a £300 million "loss charge" in 2000, which was expected to cover "all the costs of completion of the current contract".[26] The contract was renegotiated for the second time in 2002, where the aircraft requirement was reduced from 21 to 18.[27]

Nimrod MRA4 at the Farnborough Airshow

Announcing plans for the future of the British military on 21 July 2004, the Defence Secretary Geoff Hoon detailed plans to reduce the upgrade programme to cover only 16 MRA4 aircraft, and suggested that an eventual fleet of 12 might suffice.[28] PA01, the first development MRA4, completed its maiden flight on 26 August 2004.[29] This was followed by PA02's first flight in December 2004 which was used to test elements of the mission system and the air vehicle.[30] BAE Systems received a contract worth £1.1 billion for 12 MRA4s on 18 July 2006; three were to be development aircraft and nine more converted to production standard.[31] The Nimrod MRA4 successfully released the Sting Ray torpedo for the first time on 30 July 2007.[32][33]

Further disputes over cost meant that the number of MRA4s to be delivered was further reduced to nine by Spring 2008.[27] The first production aircraft took its maiden flight on 10 September 2009.[34] At the time of the flight, each MRA4 was to cost at least £400 million.[35] The Ministry of Defence announced in December 2009 that the introduction of the MRA4 would be delayed until 2012 as part of defence spending cuts.[36] In March 2010, the first production Nimrod MRA4 was delivered to the RAF for acceptance testing; in August 2010, the RAF launched its instructor training course using the type.[37] The MRA4 fleet was expected to attain initial operational capability in October 2012. The Nimrod MRA4 was planned to operate out from its main base at RAF Kinloss, Scotland.[38]

Cancellation

[edit]

"[The] loss of the capability offered by the Nimrod [MRA4] would have an adverse effect on the protection of the strategic nuclear deterrent [Trident missiles on Vanguard-class submarines], the provision of which is one of the Ministry of Defence's Standing Strategic Tasks. In addition, the maintenance of the integrity of the UK through detection of hostile air and sea craft would be compromised."

National Audit Office[39]

In the 2010 Strategic Defence and Security Review of the Armed Forces, the UK government announced the cancellation of the MRA4 on 19 October 2010 and consequently that RAF Kinloss, the intended base for the Nimrod fleet, would be closed.[40] On 24 November 2010, 382 sub-contract workers previously working on the MRA4 were laid off at BAE Systems Warton and Woodford.[41] After the airframes were stripped of electronic equipment, the remaining fuselages were scrapped at BAE Systems Woodford beginning on 26 January 2011. Although the process was conducted behind screens intended to hide the process from the media, the BBC flew a helicopter over Woodford and broadcast footage of the scrapping in progress.[42]

Although late and over-budget the decision to cancel the MRA4 was controversial as the remaining airframes had all been near completion.[43] It has been reported that following the retirement of the Nimrod MR2 (in March 2010[44]), Russian submarines have been able to travel past the UK in international waters, but they could not be tracked because of the lack of suitable aircraft.[43] In November and early December 2014 four maritime patrol aircraft operated by France, Canada and the United States were based at RAF Lossiemouth to attempt to locate a Russian submarine which had been spotted in British territorial waters off west Scotland.[45]

The aircraft would also have been used in the civilian search and rescue role; the Nimrod MR2 had often been used in this role. In this respect the Strategic Defence and Security Review stated that the UK "will depend on other maritime assets to contribute to the tasks previously planned for [the Nimrod MRA4]".[46]

Nimrod airframes being broken up for scrap in January 2011

Following the cancellation, the Defence Secretary Liam Fox used the Nimrod MRA4 procurement as an example of the worst of MOD procurement performance: "The idea that we ever allow ourselves into a position where something that was originally Nimrod 2000 – where we ordered [21] was reduced to nine, spent £3.8bn and we still weren't close to getting the capability – is not to happen again."[47] Nevertheless, six ex-defence chiefs publicly criticised the decision to scrap the Nimrods in January 2011[48] and the Public Accounts Committee concluded in February 2012 that the decision had been made without a proper understanding of the cost implications and had wasted £3.4bn.[49][50]

In January 2011 it was reported by the Financial Times that when the decision was taken to scrap the aircraft, "[The MRA4] was still riddled with flaws.... Safety tests conducted [in 2010] found there were still 'several hundred design non-compliances' with the aircraft. It was unclear, for example, whether its bomb bay doors functioned properly, whether its landing gear worked and, most worryingly, whether its fuel pipe was safe."[51] According to Air Forces Monthly magazine, "significant aerodynamic issues and associated flying control concerns in certain regimes of flight meant that it was grounded at the time of cancellation and may not have been signed over as safe by the Military Aviation Authority." The magazine also stated that the reason for the cancellation was that the RAF and Navy placed a higher priority on fast jets and frigates than on maritime patrol.[52]

Replacement

[edit]

A RAF P-8 Poseidon in 2022

Reports in mid-2011 suggested that a purchase of up to five P-8 Poseidons was under consideration,[53] while in January 2015 it was reported that attempts had been made to sell the Kawasaki P-1 as another possible replacement.[54] In November 2015, as part of the Strategic Defence and Security Review, the Ministry of Defence announced the procurement of nine P-8 Poseidons, which will undertake the range of tasks that were undertaken by the Nimrod MR.2 and intended for the MRA.4.[55] The RAF took delivery of its first Poseidon MRA1 in Seattle in October 2019 and the aircraft arrived in the UK in February 2020.[56]

Specifications (MRA4)

[edit]

Data from RAF Aircraft - Nimrod MR2/R1[57]

General characteristics

• Crew: 10
• Length: 126 ft 9 in (38.63 m)
• Wingspan: 127 ft (39 m)
• Height: 31 ft 0 in (9.45 m)
• Wing area: 2,538 sq ft (235.8 m)

2

• Empty weight: 114,000 lb (51,710 kg)
• Max takeoff weight: 232,315 lb (105,376 kg)
• Powerplant: 4 × Rolls-Royce BR710 turbofan engines, 15,500 lbf (69 kN) thrust each

Performance

• Maximum speed: 496 kn (571 mph, 919 km/h)
• Maximum speed: Mach 0.77
• Range: 6,004 nmi (6,909 mi, 11,119 km)
• Service ceiling: 36,000 ft (11,000 m)

Armament

• Hardpoints: 4× under-wing pylon stations and an internal bomb bay with a capacity of 22,000 lb (10,000 kg), with provisions to carry combinations of:
• Rockets: None
• Missiles:
• Air-to-air missile:
• 2× AIM-9 Sidewinder
• Air-to-surface missile:
• AGM-65 Maverick
• AGM-84 Harpoon
• Storm Shadow
• Bombs:
• Depth charges
• Other:
• Air-dropped Mk.46 torpedoes
• Sting Ray torpedoes
• Naval mines
• Sonobuoys

Avionics

• Thales Searchwater 2000 multi-mode search radar
• CDC/Ultra UYS503/AQS970 acoustic processor
• Northrop Grumman Nighthunter Electro-Optical Search and Detection System
• Elta EL/L-8300UK ESM system

See also

[edit]

Related development

• de Havilland Comet
• Hawker Siddeley Nimrod
• Hawker Siddeley Nimrod R1
• British Aerospace Nimrod AEW3

Aircraft of comparable role, configuration, and era

• Boeing P-8 Poseidon
• Kawasaki P-1

[edit]

Wikimedia Commons has media related to Nimrod MRA4.