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US war system reaps $2bn for BAE

David Gow
Saturday July 19, 2003
The Guardian

BAE Systems, Britain's biggest defence manufacturer, yesterday secured its place at the heart of the
Pentagon's visionary new electronic warfare programme, with a contract from Boeing worth up to $2bn.

Two north American businesses of hard-pressed BAE are among 15 partners chosen by Boeing, leader of
the US Army's Future Combat System (FCS), linking ground and airborne units.

It is seen by the Pentagon as capable of delivering a precise firepower that will dwarf the "shock
and awe" seen in Iraq this year.

The new "network-centric" system, which effectively gets rid of the tank and other hardware
developed since the first world war, is meant to transform the US Army into a highly manoeuvrable,
high-speed force.

BAE's selection, along with Lockheed Martin, Northrop Grumman and Raytheon, America's biggest
defence contractors, buttresses its ambition to become a substantial US military supplier.

The company, at loggerheads with the British government, has made no secret of its ultimate plans
for merger with the big US players such as Boeing or Lockheed, though talk of an imminent deal is
too premature.

The highly classified work of BAE's two US units, one of them acquired from Lockheed and both run by
US citizens, will be kept secret from the company's main British businesses under US laws, which
forbid such technology transfer - a restriction that Tony Blair asked to be lifted in his Washington
visit this week.

In the UK, up to 4,000 jobs, the bulk of them in Wales, are at risk because of secret government
plans to scrap its scheme to repair military jets and hand the work over to BAE Systems, unions and
MPs claimed yesterday.

Jack Dromey, chief defence industry negotiator at the TGWU, said the plans would mean the end of a
£70m project, known as Red Dragon, to build a repair facility in the centre of a new aviation park
at RAF St Athans, near Cardiff.