Boeing looking at buying BAe

[ORAC]

Well, it's been on the cards for a long time, and it could be a good fit. Boeing Could Make Run at Buying BAE Systems. (http://www.latimes.com/business/la-fi-boeing8mar08,1,2083321.story?coll=la%2Dheadlines%2Dbusiness)

[soddim]

If it comes off the UK military could well be the chief beneficiary - no longer will there be the same pressure to buy second or third rate kit that will inevitably arrive several years late at extra cost and then not work very well.

It is about time that Defence and Social Security were divorced.

[mutleyfour]

ORAC,

Your hyperlink keeps asking me to register...could you save me the bother by explaining the contents of the article please....

[ORAC]

LA Times - March 8 - Boeing Could Make Run at Buying BAE Systems.
By James F. Peltz, Times Staff Writer

Boeing Co.'s chief executive said Friday that the aerospace giant was continuing to look at potential acquisitions in Europe, including the defense contractor that owns a stake in Boeing rival Airbus.

Any effort to buy BAE Systems, formerly British Aerospace, would receive tough scrutiny on antitrust grounds and face other regulatory obstacles, in part because BAE owns 20% of Airbus, Boeing's only major competitor in the market for commercial jetliners.

But Boeing Chairman and CEO Phil Condit said at a news conference in Brussels that BAE "could be a possibility -- we are looking at it."

"We are open to mergers and acquisitions," Condit said after meeting with Mario Monti, the antitrust chief for the European Union. Condit cautioned, however, that "there is nothing in the offing here shortly." He also declined to name other potential European acquisition candidates.

A Boeing-BAE deal, something the industry has buzzed about for years, would create an aerospace and defense behemoth. Chicago-based Boeing, one of Southern California's largest employers with 36,000 workers in the region, had sales last year of $54 billion. BAE's sales totaled $19 billion.

British regulations bar a foreign company from owning more than 15% of BAE's stock. Given that, "an outright merger is a remote possibility," said Peter Arment, vice president of JSA Research Inc., an aerospace consulting firm in Newport, R.I.. But Boeing might be thinking about buying pieces of the British company, he said. There is widespread speculation that BAE could be broken up soon.

Analysts said it was unclear what effect, if any, a BAE buy would have on Boeing's California operations, including its Long Beach plant, which turns out the 717 commercial jetliner. BAE already has about 2,500 employees working on various programs in California, including 800 in Santa Monica, Westlake Village and Ontario who make airplane avionics equipment. Some 1,400 BAE workers in San Diego are involved with imaging and mapping technologies.

Talk about a sale of any or all of BAE is "purely speculative," said John Measell, a spokesman for BAE's North American unit in Arlington, Va. "We do not discuss these issues publicly."

In Brussels, Condit said Boeing wants to expand its European presence. BAE -- already a major supplier to Boeing and other U.S. defense contractors -- has made no secret of its desire to expand in the United States. BAE builds wing components for Boeing jetliners, among other U.S. programs.

Last year, BAE made a bid to buy the defense assets of TRW Inc. but lost out to Northrop Grumman Corp., the Century City-based defense concern. BAE also is building part of the planned Joint Strike Fighter, the next-generation U.S. warplane. BAE on its own makes military aircraft, along with submarines and other naval vessels.

BAE's market value has plunged 72% since July to about $5.7 billion because of weakness in the commercial aerospace market, cost overruns on some BAE programs and restructuring charges. That has led to suggestions that the company might be broken up, in the hope that BAE's parts would be worth more when divided than kept together. Measell called that "speculative."

Boeing got a strong taste of European antitrust scrutiny six years ago when it wanted to buy rival U.S. aerospace manufacturer McDonnell Douglas Corp. The deal faced fierce opposition from EU officials and nearly sparked a transatlantic trade war, until Boeing finally was allowed to proceed after agreeing to certain contract changes.

On Friday, Boeing's stock hit a 52-week low of $25.40, before closing at $25.84, down 32 cents for the day on the New York Stock Exchange. The shares have tumbled 47% in the last 12 months.

[WE Branch Fanatic]

NO!!!!!!!!!!!

Keep BAE British. Name and shame the poor managers who have fouled things up, nationalise it, put a three (or four) star officer (actively serving) in charge, BUT KEEP IT BRITISH.

And whilst we're at it, try to reclaim parts of the defence industry from the French.

[mutleyfour]

Thanks ORAC, its certainly an eye opener! Can Boeing afford to merge/buy into BAE?

[Tourist]

WEBF
Do shut up
Please

[Woff1965]

I think Bae is a shambolic outfit incapable of making or delivering anything on time or on budget.

However neither can the US defence companies - I refer to the A12 massively overbudget and never actually completed or flown, the Lockheed P7 intended to replace the P3, with a budget overrun so large it resembled the Argentinian national debt and finally the the V22 Osprey which is both overbudget and likely to be cancelled in the near future.

So, whilst I am quite happy to slag off BAe lets be fair ALL defence companies are capable of charging like a wounded rhino and never delivering.

[soddim]

WEBF - what makes you think that a three or four star officer would improve BWoS? More than a few of them have already screwed up the RAF over the years and, to boot, have been directly responsible for accepting the rubbish we have bought from BWoS. Just to add insult to injury, more than a few of them have left the RAF and moved directly into lucrative employment with the supplier of most of the RAF's equipment. If that is not vested interest what is?

No, BWoS needs a new management structure and a new direction. There are some very gifted people left in UK working for the company and they deserve better. A merger with Boeing might produce the change of direction required.

[swinging monkey]

I don't think that Mr Boeing is THAT stupid to seriously consider buying BWOS.
It's a nice idea tho' and we might all just end up with the kit we want and need, instead of the junk we get and don't want!

The swinging Monkey
'Caruthers, get me a ticket to Seattle quick!'

[Archimedes]

Just an idle thought/query, but given BWOS' involvement in JSF, would LMTAS be tempted to put in a rival bid to ensure Mr Boeing doesn't get his paws on JSF work?

WEBF - soddim's point is all-too valid. Senior offichers have gone on to BWOS and have displayed little ability/willingness to rectify some of the more egregious errors and the like. If we 'keep it British', then the pressure to buy kit that will arrive over budget and late will remain - and if BWOS were to become an offshoot of Boeing, would there be any objections to a nice shiny fleet of British built C-17s? We might even manage to get our paws on the EA-18 for SEAD/EW (yes, yes - I know that Bank of Prudence would be agin these ideas)...:)

[Grob Driver]

Monkey man… I hope you’re wrong… This could just be the breakthrough that BAES needs. Lets be honest, it’s a sack of sh!t at the moment. If Mr Boeing can take it on, and turn it around then I’m all for it. WEBF, no offence my dear chap, but please, listen to the advice of the tourist, and shut up! “Buy British… Buy crap”! :mad: :mad:

Woff you’re right, all defence companies have the ability to charge like a rhino, and not actually deliver. The difference is that when they DO deliver, it’s very good unlike BAe who have seem to have adopted the ‘not delivering’ part of your quote as their national strategy! :* :*

I’m all for this one! :D :D

[Woff1965]

...er what about the Boeing Vertol Chinook.

I refer the gentleman to the thread pinned to the top of this forum!

[Grob Driver]

Woff.

Er yes… The Chinook crashed… Very well observed! You get two smiley faces for that! :D :D

Can you find me one aircraft manufacturer that has never had one of their aircraft crash? I think you’ll struggle. So what is your point? :confused: :confused:

Maybe I’m being a bit slow today, but I’m not sure what you are getting at? As a general rule, Boeing manufacture some fantastic aircraft, unlike BAe who produce sh*t, that is over budget, late, and not a capable at the off the shelf equivalent that we could have bought from Mr Boeing! Instead, the good old British can’t even get the wings to fit! :mad: :mad: :mad: (Just one of many examples!)

No more questions your honour! :)

[Archimedes]

GD - think the point is that the HC2 was not delivered in quite the condition that Boeing said it would be (i.e. there were serious doubts about its safety and key bits of equipment). Also, the HC3 has not been a trouble-free programme.

Generally, though I'd tend to agree with you that Boeing - in general - manage to deliver what the customer wants at approximately the right time and near to the agreed price.