BAE undaunted by EADS failure

A Typhoon built by BAE at Warton.
A Typhoon built by BAE at Warton.
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The collapse of the proposed £28m merger between BAE and Airbus parent EADS has been greeted with mixed feelings on the Fylde.

The companies yesterday issued a joint statement saying that although the deal made business sense, it had been killed off by political deadlock.

UK Defence Secretary Philip Hammond met his French and German counterparts in Brussels as the merger needed the approval of the all three governments.

But hours before the announcement deadline for the deal it became clear Germany was against the move and the UK was unhappy other European nations would have a direct influence on a merged firm.

Ian King, chief executive of BAE Systems, said: “We are obviously disappointed we were unable to reach an acceptable agreement with our various government stakeholders.

“We believe the merger presented a unique opportunity for BAE Systems and EADS to combine two world class and complementary businesses to create a world leading aerospace, defence and security group.

“However, our business remains strong and financially robust.”

Fylde MP Mark Menzies added: “From the outset I was concerned that the HQ of Military Air Solutions remained at Warton. I would not want to see any deal which would have jobs draining away from there to Europe.”

He said Warton was the centre of expertise in the military field with its manufacturing work plus design and vital back room functions, and any loss of jobs would be catastrophic.

The MP said it would be good for BAE to get back into the civil aviation market but the present merger posed political interference in Germany and France.

Mr Menzies added: “It appears the German government was reluctant to take its hands off the levers of power at EADS.

“Although this deal appears to be off for the time being, I would imagine both companies would keep talks going and that has to be a good thing.”

Wyre & Preston North MP Ben Wallace was more critical.

He said: “I am pleased the reality has hit home with BAE senior management.

“While the CEO of EADS’s had all good intentions he was never going to be able to throw the yoke of French and German political interference off his back.

“The BAE board should now reflect long and hard at what their strategic error could mean for the company’s future. If they have put at risk my constituents jobs and fatally wounded the UK’s jewel in the manufacturing crown then they should consider their position.”

Phil Entwhistle a worker at Warton and Unite union representative said: “We would have welcomed the merger but most people here did not think it would go ahead because there were too many outside influences.

“Short and medium term we have good order books so there is no threat to jobs, but it would make commercial sense to look long term at the commercial aviation market.”

Ian Waddell, of Unite nationally added: “The Government now needs to strengthen its ‘golden share’ and send a powerful message that it backs British manufacturing and BAE Systems.”

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