German jobs guaranteed in BAE/EADS merger talks

The political manoeuvring around BAE Systems' proposed £30bn merger with EADS continued yesterday as the European aerospace giant assured the German government that it would guarantee about 20,000 jobs at its military industrial unit in the country for two years.

The guarantee, made by EADS chief executive Tom Enders, is thought to cover most, if not all, of its Cassidian defence and security unit, which employs 12,000 of the group's 49,000 staff in the country.

It comes a year after EADS guaranteed until 2020 the jobs of the 20,000 staff it employs in Germany to make its Airbus aircraft to help settle a dispute with staff. EADS is not able to offer such a long guarantee to its defence workers because the contracts they fulfil tend to be shorter term. A spokesman for EADS declined to comment on any discussions with the German government.

The political negotiations also continued elsewhere, as the US Defence Department said it needed more information about the deal before it could assess its security implications and give it the green light.

BAE has a strong presence in the US, where it is a key supplier to the giant F-35 stealth fighter jet programme. However, while the US enjoys a strong military relationship with the UK, analysts say it is less close to France, Germany and Spain, which own stakes in EADS.

"I don't think we know the BAE-EADS final configuration," said US Air Force Secretary Michael Donley.

"We just have to wait until they're done, until the Department of Defence can assess what the conditions [or] the governance for such a merger would be," Mr Donley added.

The US Government had agreed special security arrangements with foreign-owned companies in the past that allowed them to work on sensitive military and intelligence contracts.

BAE Systems employs 83,600 people globally, including in Australia, Saudi Arabia, India, UK and US, but the majority are in the latter two.