BAE is 'not for us', says Boeing boss

Harry Stonecipher explains why he's anti-merger, hates opulence and would like to sell Clayton Hirst a luxury jet
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The Independent Online

Harry Stonecipher, the chief executive of US aerospace giant Boeing, has ruled out a merger with BAE Systems.

Harry Stonecipher, the chief executive of US aerospace giant Boeing, has ruled out a merger with BAE Systems.

Britain's largest arms company has long-held ambitions to form a transatlantic tie-up, and Boeing has been tipped as one of its favoured partners. In the past, Boeing has cited BAE's shipbuilding business as the reason for not conducting a merger. But now BAE is considering selling its shipbuilding interests, there has been renewed speculation it may seek talks with Boeing.

However, speaking to The Independent on Sunday, Mr Stonecipher said that he was not interested in buying BAE - even if it sold its shipyards.

"BAE is not for us. We have no interest in acquiring the company because it is vertically integrated ... The company has been busy acquiring [businesses] over the last four years. It has bought a business [Commercial Electronics Unit] from us, so why would we want to buy it back? BAE is in all kinds of businesses we don't want to be in."

Referring to BAE's rocky relationship with the Ministry of Defence, Mr Stonecipher said: "BAE seems to have made a lot of its big customers awfully angry."

This is something Mr Stonecipher knows about himself. He was drafted in to run the company after the sudden resignation of Phil Condit amid an ethics probe. Boeing was rocked after it emerged that it had offered a job to a Pentagon official who was in a position to influence the government on a defence project. Since arriving, Mr Stonecipher has been weeding out what he describes as "excess" within the company. "I hate opulence," he said.

In a symbolic move, Mr Stonecipher is now planning to sell one of the company's two private 737 jets. Fitted out with two bedrooms and containing panelled walls painted to look like a library, the jet is expected to fetch up to $50m (£27m). "Do you want to buy it? We have two so you can have a choice," said Mr Stonecipher.

The Boeing boss will not be attending the Farnborough Air Show, the biennial aerospace and defence get-together which starts tomorrow. But he has deliberately timed an attack on Boeing's biggest rival, Airbus, over the level of government subsidies it receives.

Mr Stonecipher said: "If Airbus thinks it has got it right [with the A330 super-jumbo] then why send a truck around the treasuries of Germany, the UK and France ... It is not appropriate for Airbus to receive launch aid."

But EADS, which owns 80 per cent of Airbus, has hit back, pointing out that Boeing received funding for its new 7E7 jet from the Japanese government and from Washington State. "We just hope that Boeing's stance is related to the US being in a pre-election period," said an EADS spokesman. When asked about aid for the 7E7, Mr Stonecipher said: "If Airbus have a problem with that, they should take it up with the Japanese."