BAe axes 1,500 as Marconi merger is finalised

Click to follow
The Independent Online
AROUND 1,500 management posts are to be axed following the completion yesterday of the merger between British Aerospace and GEC's Marconi defence electronics arm to create a new company known as Baesystems.

John Weston, the chief executive of Baesystems, defended the decision to abandon the word British in the company's name, saying it was no longer appropriate now that 85 per cent of its sales and a third of its workforce were outside the UK.

He also reiterated Baesystems' hopes of concluding a major transatlantic defence merger, which would turn it into a global company with even less emphasis on Britain.

Baesystems is the latest in a long line of companies to drop the word British from their names or play down their British origins. British Steel has been renamed Corus while British Telecom is now mainly known by its initials only.

Mr Weston disclosed that Baesystems had rejected a short list of four new names by its corporate image consultants. These were Archant, Alligard, Signant and Gardant. The new name is a combination of the abbreviated version of the old British Aerospace and Marconi Electronic Systems.

The job losses, which will reduce the management ranks of the new organisation to about 3,000, are part of the pounds 275m cost savings identified when the merger was announced in January.

John Weston, chief executive of Baesystems, said about half the savings would come from lower purchasing costs and the other half from job reductions and plant closures.

Baesystems has promised to give an update on additional cost savings next spring with most analysts expecting it to achieve at least pounds 400m.

The new company will rank as the world's second-largest defence contractor after Lockheed Martin with sales of pounds 12.3bn, an order book of pounds 37.5bn and 115,600 employees. It also owns 20 per cent of Airbus Industrie.

Outlook, page 19

Business Review, page 3

Comments