Outlook: Only a name

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The Independent Online
SIR DICK Evans says that Pineapple was his favoured name for the defence and aerospace monster created yesterday out of the British Aerospace- Marconi merger. At least pineapples bear a passing resemblance to the grenades that the company makes and if the shares perform as well as Orange then investors will be laughing all the way to the next Farnborough Airshow.

Unlike the other half of GEC, which has taken off like a rocket since the demerger was unveiled in January, Baesystems will have to work harder to get itself into orbit. The defence procurement industry is only just recovering from the shell shock that followed the end of the Cold War. Moreover, the cost-plus contracts of old are as much a piece of military history now as the Vulcan bomber.

The synergy savings of pounds 275m targeted by Baesystems look modest compared with the inherited cost base, and for all the talk about what its Airbus stake might be worth, the mooted figure of $3bn-5bn will remain pie-in- the sky until the day the consortium publishes proper accounts.

Sir Dick's co-pilot on this trip into the unknown, John Weston, is promising to produce some juicier synergy numbers next spring. But having watched the BAe share price head south more or less since the day the merger was announced, it may take something more explosive to capture the imagination. If only he could square the regulators and Capitol Hill, Mr Weston would drop Bae as fast as he has dropped British from the corporate identity in doing a deal with the Americans.