50 SKY SHADES - World aviation news

BAE calls for anti-monopoly controls on it to be removed after 17 years

Download: Printable PDF Date: 30 Jul 2016 14:40 category:
Publisher:
BAE calls for anti-monopoly controls on it to be removed after 17 years - Manufacturer publisher
Krista Kuznecova
Country: United Kingdom Aircraft: Airplanes
Source: The Telegraph

BAE Systems has asked to be freed from anti-monopoly controls it signed up to when the defence giant was created through the merger British Aerospace and Marconi Systems 17 years ago.

The FTSE 100 business was saddled with a list of undertakings at the time of the 1999 tie-up as regulators sought to ease concerns about the new company’s dominance of the UK defence market.

These restrictions have since been whittled down, with just two remaining: to have a compliance officer who checks that BAE abides by the controls, and that the company gives other potential prime contractors access to its capabilities “on fair, reasonable and non-discriminatory terms” so they can bid for Ministry of Defence work.

It was feared the merger would see BAE take control of such a large portion of the UK's defence production capacity that other bidders who might have formed alliances with British Aerospace or Marconi previously to win military contracts would effectively be squeezed out of the market.

Typhoon

The Competition & Markets Authority (CMA) has now agreed to review whether the undertakings are still relevant, saying that BAE is arguing that the defence industry has changed since the merger and that the compliance costs “stifle its competitiveness”.

A review in 2006 by the CMA’s predecessor decided that it was still necessary to keep the controls in the production of warships, combat aircraft and general munitions.

In documents explaining the reasoning behind the review, the CMA says BAE argued the MoD no longer uses the prime contractor model and has no foreseeable demand for new equipment  that might be affected beyond existing orders.

The annual £400,000 to £500,000 cost of compliance is also an unnecessary drain on resources of the company,which had £17.9bn of revenues last year.

The CMA is now asking for interested parties to contribute evidence on whether or not the restrictions should be kept in place.

A spokesman for BAE said: “We believe there have been a number of significant changes of circumstances in UK defence procurement and to BAE Systems’ business which mean that the retention of the undertakings is unnecessary and inappropriate.”



Loading comments for BAE calls for anti-monopoly controls on it to be removed after 17 years...


Recommended

Bell to showcase vertical lift innovations at HAI Heli Expo 2018

Bell Helicopter will display its new air taxi cabin, along with the Bell 505 Jet Ranger X and Bell 525 Relentless from booth # C5122 at Heli Expo 2018, which takes place at the Las Vegas Convention Ce...

The H160 lands in Las Vegas, kicking off Airbus’ presence at Heli-Expo

H160 prototype, H145, H135 and H125 alongside a full range of updated HCare digital solutions The H160 prototype has landed in Las Vegas and will be headlining Airbus Helicopters’ presence fo...

SIGNALIS becomes Airbus

SIGNALIS, now Maritime Surveillance, is the Airbus Centre of Competences for Maritime Safety and Security A subsidiary of Airbus since its creation in 2011, SIGNALIS has now been fully integrated...

hullo Aircrew celebrates online platform launch at London Oxford Airport

New technology will save operators time and money when sourcing crew Following the successful introduction of the hullo Aircrew brand at EBACE last year, the technology start-up has officially laun...