Call to secure BAE jobs
Union chiefs at BAE Systems today called on the Government to secure the long-term future of workers in Lancashire by bringing new orders into the county.
It comes after a planned £28m merger between the company and French rival EADS was scrapped.
The defence giant confirmed that plans for the deal, which would have created a defence titan with combined sales of £60billion and more than 220,000 staff, with around 52,000 employees in the UK, had been cancelled.
BAE said it had become clear that the interests of government stakeholders – including those in France and Germany – could not be reconciled with each other or with the company’s objectives.
But Phil Entwistle, the Unite union representative for manufacturing workers at BAE’s Lancashire sites, said regardless of the failed talks, it was “business as usual” for its 11,500 workers at jet-building factories in Warton and Samlesbury, near Preston.
He said: “This deal was always about the long term, in the medium and short term we have a very healthy order book.
“Companies like ours have discussions about these kind of deals all the time and often you never hear about them, so I have no doubt this will not affect staff here.
“BAE Systems is not going into freefall. We can see orders stretching 20 years plus into the future, we need to build on that.”
However, he added that the British Government may need to redouble its efforts to win new orders for aircraft including the Euro Fighter Typhoon, the F-35 and the Hawk Trainer, which are all built in Lancashire.
He said: “You can see from the fight the French and German governments have put up that they see EADS as a crown jewel, and we need our Government to see BAE Systems as a crown jewel in the UK manufacturing crown.
“Our focus now needs to be on securing orders for the Typhoon in the Middle East, getting the F-35 work underway and securing more Hawks. That is what is going to secure jobs at Warton and Samlesbury and the UK Government has a part to play in that.”
Discussions between the two companies were terminated after days of talks between the UK, French and German governments.
BAE and EADS said it had become clear that interests of the parties’ government stakeholders “cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger.”
BAE chief executive Ian King said the business remained “strong and financially robust”.
He said: “We continue to see opportunities across our platforms and services offerings and in the various international markets in which we operate.”
But Preston’s MP Mark Hendrick said he was “exasperated” with the outcome.
The Labour MP said: “There is a need in the future to develop a big European aerospace and defence company to compete with the American giants and obviously this was a big opportunity.
“But obviously the deal wasn’t right and the fact that the French and German governments still wanted to have a big interest, means it cannot go through.
“It’s good for jobs in Lancashire but in the longer term we want a company free from political interference.”
Wyre and Preston North MP Ben Wallace, who organised 45 fellow MPs to sign a joint letter to the Prime Minister seeking stronger safeguards for the deal, welcomed the news that the potential merger would not go ahead.
The Conservative MP, who was in Washington DC holding meetings with senators and US Government officials to discuss the deal, said: “While the CEO of EADS had all good intentions he was never going to be able to throw the yoke of French and German political interference off his back.
“As long as those two squabbling government shareholders were present the deal should never have been promoted.”
Ribble Valley MP Nigel Evans also welcomed the news.
He said: “I was pleased to learn today that the proposed merger has been shelved.
“BAE employs a great number of people in my constituency and my concern was that a merger could cost jobs as a new merged company sought to cut costs.
“My other concern was what impact the merger could have on business which BAE currently enjoys – particularly with the United States of America.
“It is clear that a sticking point in these negotiations was what influence the French and German governments would have in the running of a merged company.
“Rightly the UK and the US sought assurances that the French and German stakes in the company would be low enough that the business’s agenda would not be dictated from Paris and Berlin.
“If the merger had gone ahead without these reassurances then the US could well have pulled out of its commitments with BAE.
“That would also have been disastrous for jobs in Lancashire and up and down the country.”