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HAWK IN ALVIS OUT?

26 Jun 03. During Defence Select Committee questions yesterday, Lord Bach, Minister of State for Defence, stated that the UK FRES requirement would not be issued before the summer recess, damning hopes of the Alvis/BAE Systems team of an early decision to kick the requirement off. The Boeing FCS team is still hoping for a Government-to-Government deal on a joint (See ‘FCS/FRES BOEING HOPES FOR GOVERNMENT AGREEMENT ON FCS/FRES’, BATTLESPACE PARIS NEWS 2003
DAY 3 JUNE 18TH 2001).

Both Lord Bach and General Rob Fulton stressed the importance for a technology-led solution, suggesting that such items as all-electric drive were premature and that 2009 was to soon for the final decision. With £2bn in the pot it may be that the Treasury would foresee that this money would be better spent on an FCS solution with the vehicles being built by Alvis under license from GD and UDLP, which would justify the Vickers purchase and BAE becoming UK LSI with Boeing with both BAE and Alvis taking the Sister Design Authority to enable sales of the systems to overseas customers as is being negotiated for JSF.

Meanwhile the combination of the Trade Union Amicus, the wrath of Sir Richard Evans and the potential loss of 2000 plus jobs (if you take in Rolls and Smiths) has swayed the Treasury from demanding an international competition for the RAF’s Trainer requirement (See ‘WILL TREASURY INTERVENTION IN TRAINER DEAL RISK POSSIBILITY OF UK SHARING IN MULTI-MILLION POUND TRAINER MARKET?,’ BATTLESPACE UPDATE Vol.5 ISSUE 26, June 20th 2003). The Treasury appear to be holding their ground by saying that Amicus had put a ‘spin’ on the talks, but in any event BAE appears to be in a stronger position than that announced at the Paris Air Show.

Boeing’s Phil Condit has dampened speculation about a BAE merger and said that there was nothing imminent. Until the JSF IP negotiations are solved, BAE would not want to enter into any merger negotiations given the huge differences in price if BAE gain a Sister Design Authority.

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