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By Julian Nettlefold, Editor, BATTLESPACE

14 Dec 07. As we close our last issue for Christmas, we must take a look at the events of 2007. The plight of Airbus and EADS has dominated the headlines in 2007 along with Iraq and Afghanistan.

The decision taken by BAE Systems to sell its stake in Airbus was taken with the shareholders interests at heart and the short to medium term strategy of BAE Systems. It will be interesting to note how much the value of Armor Holdings will be in ten years compared to EADS? I would bet that EADS would be the winner as the armoring business is notoriously cyclical and low margin.

A more important discussion would be the failure of the U.K. Government to purchase the BAE stake for £1.9bn in July 2006 rather than let it go to the market. Selling the BAE stake sold any chance the U.K. Government had over controlling jobs and technology within Airbus.

The year started with the sale of Smiths Aerospace Division to GE on January 17th. This was partly caused by the stranglehold over Airbus avionics from Thales, with Smith caught between an inability to break into Airbus with their key U.S. projects 787 and JSF stretching in terms of time and cost thus causing a yawning gap in Smiths’ business – sale was the only option. Smiths had also, as is now common, provided start-up funding for these projects, thus again the return on capital was again stretching into the future.

But, we must look back to 1997 and Labour’s plans for the U.K. under Tony and his cronies, Cool Britannia did not included long-term high-technology projects but short term government policy designed to give the economy a quick lift to fill the chancellor’s coffers in the shortest time. Our readers should look back at the guest lists on Tony’s many hip parties at No. 10, Phillip Green, (now Sir Philip) of Topshop, Sting, Robbie Williams, Kate Moss, numerous City bankers and financiers, consultants by the score, lawyers in their droves and the odd grandee just to show some reverence to the past. No industrialist in sight and a few months later the public spat with Britain’s biggest manufacturing business and an arms company to boot began – Mike Turner won his spurs in defending his Company but, like all spats the customer won, in the short term, but in the process destroyed a prize U.K. technology asset.

But as the new century dawned it became clear that industry, engineering and technology were not part of Tony’s agenda. Rover collapsed around the Government’s ears with Patricia Hewitt fiddling while Rome burnt and the Company crashed into administration in 2005. The argument was that the U.K. economy could not support low margin, low paid industrial jobs and should concentrate on high-margin (non-unionised!) financial jobs; strange that the world’s largest economy, the USA has a huge manufacturing sector? Could it be that previous Governments’ mismanagement of industrial policy with the resulting strikes meant that it was easier not to have this problem? Or had a deal been done with Europe to ensure that London remained the financial centre of the New Europe at the expense of our industries and fishing interests? Sources suggest that Mrs Thatcher sacrificed our fishing fleets for her Rebate.

One only had to listen to Samuel Brittan of the FT at the Policy Exchange Think Tank in September 2004 which said, ”Far from providing jobs, UK Government support for arms exports divert investment away from more effective job-creating economic activity.” The Panel then went on to crucify the Hawk aircraft, the U.K.’s only military aircraft project and a best seller at a time when BAE was fighting for a multi-billion dollar order in India. Gordon Brown and his advisers were on record as preferring another option. Brittan went on to say that’ “Blair would die with Hawk printed on his heart.”

One of the options discussed was that foreign defence companies wi

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