BAE looks to US to find new non-execs

BAE Systems, Britain's leading defence contractor, is set to strengthen its board with the appointment of up to three new non-executive directors.

BAE Systems, Britain's leading defence contractor, is set to strengthen its board with the appointment of up to three new non-executive directors.

Dick Olver, the new BAE chairman, said last night that it was looking for two new American non-executives to bolster its US ambitions and one new UK non-executive with a background in big industrial or engineering projects.

Lord Hesketh, the Tory peer and former minister, is expected to step down after 10 years on the BAE board. However, Michael Portillo the former Tory Defence Secretary is expected to remain. Mr Olver described Mr Portillo as "a highly valued" member of the board.

Mr Olver also said he favoured the creation of a single new integrated company to own and operate Britain's warship yards. In return the Ministry of Defence is offering to place a long-term programme of orders with the new company stretching over the next 10 to 15 years.

BAE, VT Group and Babcock are discussing a merger of their naval yards but agreement on a new joint company before Christmas, as had been hoped, appears unlikely, Mr Olver said.

He was speaking as agreement on a £12bn order for a second tranche of Eurofighter jets came a significant step closer.

Eads, which makes the Eurofighter in partnership with BAE Systems and Finmeccanica, said last night that international negotiations had concluded and a final contract for the order could be signed by the end of the year.

Britain, Germany, Italy and Spain have pledged to buy 620 Eurofighter jets for their air forces over three tranches, but the go-ahead for the second has been delayed by negotiations over the different specifications each buyer requires. A Ministry of Defence spokesman reiterated Britain's commitment to the project yesterday.

Deliveries of the first tranche of 148 jets began last year.