Simpson tipped for chief executive's job at Lucas

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The Independent Online
LUCAS INDUSTRIES, the automotive and aerospace engineering group, is expected to announce a new chief executive in the next two weeks, with British Aerospace's deputy chief executive George Simpson the strong front-runner.

BAe is understood to be mounting a fierce rearguard action to try to persuade Mr Simpson to stay. He is given much of the credit for the turnaround at its subsidiary Rover, and his defection would be seen as a considerable coup for Lucas, which has been battered both by the recession and by senior management problems.

It has been seeking a chief executive for a year since the decision by Sir Anthony Gill, chairman, not to give the job to its former head of aerospace, Tony Edwards.

If Lucas does not succeed in luring Mr Simpson away, Sir Richard Giordano, formerly of BOC, could take the job as an interim measure, or it may be offered to John Grant, finance director, or Frank Turner, head of the aerospace division. Both have joined the company in the past two years.

There has been speculation that Mr Simpson would be offered the chief executiveship of BAe by its chairman, John Cahill. However, at 51 he is 10 years older than the incumbent, Dick Evans, and is thought to believe that he has gone as high as he can within the company.

Lucas, which announces its annual results today, is finally starting to recover from the recession. Pre-tax profit, including gains from disposals, is likely to be more than pounds 45m, above most analysts' forecasts. Lucas has cut costs by pounds 60m in the year, mainly through the loss of 4,000 jobs, and has raised pounds 100m through disposals.

Sir Anthony is expected to tell shareholders that the disposal programme is not yet over, although its shape will be determined by the new chief executive. Lucas will hold its dividend against some City expectations.

The group was heavily criticised for not cutting its capital and development expenditure sufficiently during the downturn. Sir Anthony is expected to point out that much new business has been gained in the past year as a direct result of that investment.

The truck-making divisions of Mercedes and Volvo have agreed to buy advanced electronic controllers for diesel engines made at Lucas factories at Gloucester and Blois, France, both of which were built up during the recession.

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