Baron Waste of Space
 

I see the Baron's shareprice has collapsed this am due to 'problems with MoD contracts'

http://news.bbc.co.uk/1/hi/business/2567615.stm

So will the mighty hunters be chopped by MoD first to save Baron Waste of Space's face or simply never delivered in time for any of the 'must attend' middle east parties....

Is this the bit where they spotted that none of the new nimrod wings fit the airframes as mentioned on tother thread?

No, this is an additional write-off of costs and a further delay. Watch this space for details as they emerge. The Times reports the MOD as being "furious".

Baron
 

The Guardian today states the Baron wants to renegotiate the fixed price contracts and the MOD has told them to stick it where the sun don't shine.

Tough times ahead for the baron methinks!

At least the MOD are on the offensive this time, I wonder how much pressure there is to get the MR4 in service now.

The Telegraph has a few interesting quotes “…would not simply throw money at Bae as the company has to face up to its responsibilities…” whilst at the same paragraph stating that “…admitted it also had to act in the best interests of the nations defense…”

Sounds like bail out time to me or we wont use the penalty clause but just this once:)

It must be pointed out that the northwest is heavily dependent on the manufacturing industry. In Lancshire the aerospace industry is I believe the number one employer and as we all know things up north are never as good as down south large scale redundancies will make things worse. Also if Bae starts massive layoffs all the voters in a Labour stronghold wont be very impressed.

Im not any friend of Bae but its so large now that the government simply cannot let it fail.

Also, what will happen to BWoS's share price when the city start to comprehend the implications of the RSAF's money saving plans for Al Yamamah? This is BWoS's biggest (only?) money earner and a reduction in earnings from the sand pit must have an impact.

And, whilst we're at it, what is the future of MFTS for BWoS? What is this I hear that the MOD are looking at "Italian jet trainers" for the contract? Personally, I think that BWoS has a very uncertain future.

BAe are trying to twist a few arms. The Financial Times reports today that BAE are "worried" that the fact that the Astute sub and MR4 programmes are years and billions over budget might cause them to lose the competition to build the new RN carriers. The other bidder is Thales, the decision is expected early next year.

Financial Times Report

Reference the MR4, for those who didn't pick it up on a previous thread, in addition to the wing/fuselage mating problems the following other problems are also present or possible.

The wing structure needs reinforcement around the air intakes.

There is a possibility of distortion in the intakes which may cause engine surge problems.

The programme test pilot expects directional stability trials around the stall to be "interesting", even with the additions to the tail surfaces.

The papers yesterday also mentioned at software integration problems.

First flight has now slipped to the end of 2003.

There is also a rumour going around that there may be a problem with the floor strength.

S/Bob

"There is also a rumour going around that there may be a problem with the floor strength."

Yeah right, BWoS are about to go through it!

Having spent almost 20 years with BWOS trying to produce a quality product that the Services want (I no longer work for them), all I can say is that it’s a good job they don’t make prams!

What's the story on CSP - did the RSAF ever go for it?

Not at the moment. They are as skint as BAE are desperate for the orders....

My conspiracy theory is that Bae have played up this cock-up, maximising the possible loss, so as to give the City a nice surprise when it isn't quite as bad, beg the MoD for more money, and create poor-me publicity to get the carrier contract...

EADS targets UK defence market
 

The Times:

EADS, the Franco-German defence group, has launched a public relations offensive in the UK, targeting the Ministry of Defence in an effort to muscle in on lucrative UK defence procurement contracts and take market share from BAE Systems, its biggest rival in Europe.

The move comes at a bad time for BAE, which has a deteriorating relationship with the MoD and is facing stiff competition from Thales, of France, over a £2.9 billion order for two new full-size aircraft carriers, the Navy’s first such vessels for decades.

“We want to become bigger in the UK,” Rainer Hertrich, German co-chief executive of EADS, said. “We see opportunities for joint ventures, organic growth and acquisitions.” Two weeks ago Herr Hertrich and Philippe Camus, his French co-head, hosted a dinner in London for MPs and senior defence officials. Other EADS executives, including Hans-Peter Ring, the finance director, have also been in the UK recently to help to raise the company’s profile.

EADS is thought likely to target the UK for a “substantial” contract to provide training aircraft, expected to be offered for tender by the MoD soon. The company also has its sights on a contract to integrate the Army’s ground-based air defence radar and control systems. EADS will compete with BAE for both orders.

Recent comments from Geoff Hoon, the Defence Secretary, affirming that all MoD contracts would go out to open international competition, has prompted EADS to act. But Mr Hoon also emphasised the importance of “local content” when awarding big defence contracts, which is why Herr Hertrich wants to expand EADS’s businesses in the UK.

BAE Systems campaigned to keep out foreign competition for UK contracts, but seems to have failed. There is a growing belief in the MoD that companies such as Thales or EADS already have a large UK presence and that awarding them contracts helps to protect British interests.

CSP?
 

Forgive the ignorance but what is CSP?

I think I missed that briefing.

Capability Sustainment Programme

The Times - January 16, 2003:

BAE dismayed as Hoon says it is not British
By Russell Hotten

FEARS that the Government is preparing to award a £10 billion defence contract to the French sparked fury from British unions and dismay at BAE Systems yesterday.

The row erupted after Geoff Hoon, the Defence Secretary, told American journalists in London that BAE Systems, Britain’s biggest manufacturer, was no longer British. His comments came after last month’s dispute between BAE and the Ministry of Defence (MoD) and, crucially, ahead of the imminent award of a number of large contracts, including a £10 billion order for two aircraft carriers. BAE is bidding against Thales, a French rival.

Analysts said that Mr Hoon’s comments were part of a running dispute between the MoD and BAE over whether contracts should be open to tender by foreign companies.

Mr Hoon said that BAE was no longer British because a majority of its shares were held overseas. He said that BAE had no political advantage over foreign companies when tendering for a contract.

Unions and opposition MPs reacted furiously, and BAE described Mr Hoon’s comments as “regrettable and disappointing”. A spokesman for the former British Aerospace added: “We say this more in sadness than anger.”

The spokesman said: “The Government has a ‘golden share’, and we have rules governing the size of individual foreign shareholdings and the British composition of the board. I think we are British.”

About 54 per cent of BAE’s shares are foreign-held. However, no single overseas institution can own more than 15 per cent of the company. About 47,000 of BAE’s 72,000 employees work in Britain.

Jack Dromey, national organiser of the T&G union, said: “What planet does he (Mr Hoon) live on? As well as its direct employees, a further 100,000 British workers depend on BAE contracts.” Before Christmas, BAE and the MoD were in dispute about cost overruns on two contracts for Nimrod aircraft and the Astute submarine.

BAe Not British?
 

They must be a British company ;

1) they are based in the UK.

2) the last decent product they built was the Hunter in the 60's.

3) they are cr@p

ergo must be British.

Woff,

You must be Welsh.

1) You clearly think that you're funny and you're not. (Though you do make me laugh).
2) You are a tw@t who makes over-generalised and symplistic statements
3) You come from Wales.

Ergo you must be a lava bread scoffing, inbred sheep shagger!

How did we get onto sheep sh@gging?!!!!!!!!!

Things were not going well for ‘t Bungling Baron Waste o’ Space. “WHO DOES’T THAT BOOGER HOON THINK HE IS” he bellowed to no-one in particular. Pieces of part-digested sheep’s bladder tart flew from his mouth as he exploded at Hoon’s remarks. Old Scrotum, his aged and wrinkled retainer, crept quietly from his presence; only the presence of Boogeroff, his trusty but flatulent whippet mellowed the outraged Baron. As Boogeroff skilfully intercepted a particularly large and odious chunk of half-eaten ovine gall bladder, ‘t Baron continued “Old mad Maggie would never have got us in such a pickle. Back in them days, ‘t werrks werr kept busy wi’ all mannerr o’ contracts for ‘t Airr Forrce. Now we’ve got soom lad in a pink romperr suit as ‘t Prime Ministerr an’ all’s gone to boogery. Them down South have complained about ‘t Nimrod bein’ late, ‘t Bureaufighterr bein’ a bit overr ‘t budget an’ now this! Well, I’ll go to the foot o’owerr stairrs. Don’t he understand about ‘t jobs of ‘t lads in ‘t werrks? There’s British pride at stake, tha’ knows. Not to mention ‘t brass as we’re gettin’ from ‘t sub-contracts!”

But no-one was listening to ‘t Baron. Knowing there were trouble at ‘t mill, Seth was down at ‘t werrks trying to keep ‘t lads busy trying to complete the first batch of TypHoons for ‘t Airr Forrce before 2010, ‘t lads at Woodford were trying to make ‘t wings fit ‘t Nimrods and ‘t lads in research were trying to work out how to build an aircraft carrier which would float. Old Scrotum was mumbling to himself in his pantry, even Boogeroff was hiding from his master’s rage. Was this the end? Would things ever get back to ‘t cosy times when ‘t golden share had kept the Baron’s coffers full of brass...........who knows. Or rather, Hoon knows, perhaps....

BAe - I despair
 

Jackonicko - just a short note on this matter.

I thank you for raising the tone of the discussion by judicious use of national stereotypes. I will accept however that my post was not the most intellectually incisive of comments on this topic. However to be blunt BAe is not currently that good a company. Many of its products are flawed and it appears to be in significant risk of losing every major contract it is bidding for from the new Carrier for the navy to the RAF tanker contract.

The saddest thing about this is that BAe is probably no better (or worse) than any other defence contractor out there. Many of the posts on this board relating to BAe ridicule the company for its apprent incompetance, yet to be blunt I have to ask how much of the difficulties experienced by the various projects are down to BAe and how much down to MOD. To be blunt it often appears to be the blind leading the blind. Many of the current cock-ups are made significantly worse by a disheartening and morale sapping penny pinching enforced by beancounters more concerned with the price of a rivet than getting the best kit for our armed forces.

If anything my post was just a final scream of despair - I want to be able to pick up a newspaper, or talk to one of my friends in the industry/services without being told about how one of the UK's only remaining hi-tech companies has screwed it up once again and has just had to lay off hundreds of people because it has lost a major contract to a foreign company who will provide marginal gear for inflated prices that will only perform to (something approaching) a minimal standard without a stack of expensive "upgrades". If we are going to procure cr@p kit we may as well make sure the money goes to put food on the table of British workers. We must be able to make equipment that works - I would say its not rocket science, except it often is of course. I went to college with people who work(ed) for BAe, they were clever and capable people, yet somehow the company can't seem tot do anything right

I am just sick of not being proud of British manufacturing, of having to look back to before I was born to see something as beautiful (and more importantly effective) as a Hunter or as superior as a Spitfire.

And yes I am Welsh - want to make something of it!!!

Yes, sorry about that. But racial stereotypes can be so tempting, can't they?

I get fed up with blanket condemnations of BAE and with silly claims that they've never done anything right since the Sopwith Camel, or whatever.

There is plenty to condemn BAE for, whether it be technical cock-ups, delays, or inflated pricing.

But when the company is never (or seldom) actually made to pay for its mistakes, and when the customer refuses to act as an 'intelligent customer' simply giving all work to BAE, without assessing the cost/risk involved, then perhaps BAE should not shoulder all the blame for everything. Perhaps the RAF is getting the industrial partner it deserves.

I wouldn't give the Harrier GR9 upgrade to BAE, after the experiences with Tornado GR4 and the Jaguar GR3A upgrades, and I wouldn't have let BAE get away with what it has done on the Nimrod MR4.

But BAE did a good job on the Jag, the Hawk, the original Tornado IDS, the EAP and (at least insofar as the airframe is concerned) the Eurofighter, and deserve some credit for that.

Well ive stated my views on the BAE/ MOD situation so im not going to repeat them again. About BAES not being a British company. I once worked for a large British food manufacturing company which bought the second largest US food manufacturer in their industry. Im not talking about a small burger joint here im talking about a US company with billion's of dollars in turnover. Within 2 years they had run the company into the ground and then sold it off at a loss.

What I have found about British companies is that they simply do not work suscessfully outside the UK. Things like the above you can read in newspapers every week. Now I can only imagine what will soon happen to BAES's US business where they do not have a monopoly on new equipment :rolleyes:

The fact is that BAE are doing very nicely in the USA, where other companies are having similar problems with over-run budgets and late delivery. Has anyone looked at the F22 programme lately?

Over-run or no over-run, Nellis got their first F/A-22 this week.

Ohh Ohh flashback. It's 1985 and Nimwacs isn't meeting performance criteria. Wot a shame the Shacklebomber isn't around to bail out BAe / Macaroni this time...

Sunday Telegraph:

Government will not cap BAE's £1bn losses

Bae Systems, the UK's leading defence contractor, has failed to persuade the Government to cap its massive potential losses on contracts to build Astute submarines and Nimrod surveillance aircraft.

The stand-off between BAE and the Ministry of Defence will send shock waves through the City because the company had hoped to tell investors with its results on February 20 that losses from the contracts would not exceed £1bn.

"How can we publish our results if we can't say where the red ink will stop on Nimrod and Astute?" asked an executive. "The lack of co-operation from the Government is astounding."

Another said: "This will make it enormously difficult for us to draw up our accounts."

However, a senior Government member said he was horrified that BAE was trying to re-open talks on renegotiating the contracts. "We made our views very clear to the company before Christmas," he said. "There are some things we simply cannot budge on."

BAE's share price collapsed in December when the scale of cost over-runs on the projects was first disclosed. Company executives and Whitehall officials then embarked on a vicious lobbying campaign against each other.

The Government blamed BAE's alleged inefficiencies for the over-runs, while BAE was furious that it was forced to crystallise losses it thought could be offset against possible gains that might flow from the renegotiation of other contracts.

The company has warned contractors working on Astute that negotiations with the Government may not bear fruit until the middle of the year at the earliest, exacerbating programme delays.

The latest row emerges at a difficult time for BAE, which is battling with Thales of France for the prime contractorship of the £3bn contract to build two new aircraft carriers.

An initial decision on the contract is expected to be taken this week at a meeting of the MoD Investment Approvals Board, chaired by the chief scientific adviser, Keith Onions. Ministers hope to announce the deal this month.

A Government member said attempts were being made to broker a compromise deal or "third way" which would give both companies a substantial role.

Last week Geoff Hoon, the defence secretary, caused consternation at BAE by telling US reporters that BAE is "no longer British". Ministers have told The Telegraph that this was code for their refusal to do it special favours.

In its lobbying for the carrier deal, BAE has repeatedly used the argument that Thales is French. However, all work on the contract, whether under the supervision of Thales or BAE, would be carried out in the UK.

Thales argues that it will create and sustain 3,500 jobs in Scotland. For example, assembly of the carriers is likely to take place at Rosyth whoever wins the £3bn deal.

The Government is also close to announcing a shortlist of two for the Watchkeeper contract to develop and build sophisticated unmanned reconnaissance planes for the British Army.

BAE is thought to have lost out on the role of prime contractor on Watchkeeper, with Northrop Grumman of the US and Thales emerging as the probable winners.

This is pathetic. Didn't they realise the implications of a fixed price contract when they took it on?

Many other companies have no problems presenting accounts when they are on fixed price contracts with possible exposure to losses. Companies with leasing arms also have to account for possible unquantified losses. None of them start to whine that they don't know how to present their accounts.

BAE will win the contract all else is just background noise possibly to reduce the contract price. The government will cave into demands from shareholders to help out BAE just like what happened to Railtrack and BNF.

The Blair government is well known for not rocking the boat and always compromising on all issuses I mean they cant even ban fox hunting, if there's one thing that probably 80% of the population wants banning its blood sports yet they wont even stick out their necks for even this of all things. I mean fox hunting who gives a flying ****.

There weaklings, they talk the talk but never walk the walk.