A Lancashire MP has said the planned merger between BAE Systems and European rival EADS could cost UK jobs and upset the UK’s relationship with the United States.
Preston North and Wyre MP Ben Wallace has warned the huge stakes held by the German and French governments in the EADS could mean the proposal is part of a “grab” for BAE’s multi-billion pound American business, a key supplier to the Pentagon.
The company employs 11,500 people at its jet-building factories at Warton and Samlesbury, near Preston, which work on flagship military contracts including the Eurofighter Typhoon and F-35.
Mr Wallace told BBC Radio 4’s Today programme on Friday: “We call it a merger, but it looks like a takeover.
“EADS has two big government stakes in it - France and Germany - and BAE does not. It is important that we get to the bottom of what safeguards the UK will seek, and indeed whether our very important defence relationship with the US is threatened or strengthened by this merger.
“France and Germany have different employment laws and different employment protections... (and) French unemployment is reaching 13%.
“When they start identifying overlaps, what I don’t want to see is the French sweeping in and saying we will just get rid of the British workforce - such as my constituents - because it is easier to do or because we are the dominant partner in this relationship and therefore we choose to have it in Toulouse or Germany.”
The British government holds a “golden share” in BAE which allows it to veto any such deal, although it is believed the Government is keen on the idea of a merger.
Any deal would create the world’s biggest aerospace company, with a market value of around £31bn.
Meanwhile, former Defence Secretary Lord Reid said that the mooted deal appeared commercially appealing, and urged the Government to make efforts over the coming weeks to see whether political and diplomatic obstacles can be overcome.
He warned that BAE could face job cuts even if the merger collapses, due to the shrinking of the defence market worldwide.
The former Labour Cabinet minister told Today: “In commercial terms it appears to make sense, but there are a large number of complexities and obstacles and difficulties to be overcome, not least on the political side.”