BAE Systems

6 The Aircraft of British Aerospace and BAE SYSTEMS 1977 - 2017

The formation of British

Aerospace - Europe’s largest

aerospace company

Today’s BAE Systems is a very different

business to the British Aerospace that was

formed by the UK Government in 1977

and was then Europe’s largest aircraft,

missile and space manufacturer. It was

only briefly state-owned and by 1985 it

was entirely in private ownership. Today’s

BAE SYSTEMS is a defence contractor

providing aircraft, warships, tanks,

electronics, cyber security and

intelligence. Its key markets are Australia,

the UK, India, Saudi Arabia and the USA. It

also has a substantial holding in MBDA, a

multi-national missile manufacturer.

From nationalisation

to privatisation

The Nationalisation Bill had a stormy

passage through Parliament but came

into force on 29 April 1977 with the

formation of state-owned British

Aerospace encompassing the British

Aircraft Corporation (BAC), the aviation

and dynamics divisions of Hawker

Siddeley and Scottish Aviation (SAL) in its

entirety.

Just like Hawker Siddeley with its large

portfolio of aircraft and guided missiles,

Vickers and GEC, which jointly owned

BAC would have preferred to retain

ownership of their highly profitable

organisations. The directors and

shareholders of these companies were

aggrieved when they received

compensation they regarded as grossly

inadequate.

Scottish Aviation based at Prestwick

was far smaller than these two giants. It

From British

Aerospace to BAE

SYSTEMS 1977- 2017

had a dwindling amount of work and the

workforce had been virtually halved to

1,400 just prior to nationalisation. So,

except for Scottish Aviation the other

companies taken over were showing a

profit and had healthy order books.

The new grouping had 59,

employees working in aircraft

manufacture and 17,000 working on

missiles and space products.

From part to full-privatisation

In May 1979, the Labour Government was

replaced by a Conservative Government

led by Margaret Thatcher which had

pledged to privatise British Aerospace. In

January 1980, the company was made a

public concern and the following month

the state sold 51.25% of the shares. To

general surprise in January 1985 the

Government announced that the

SYSTEMS 1977- 2017

… British Aerospace

logo 1977-1999.

(BAE SYSTEMS)