Paris Air Show

BAE looks to break U.S. technology barriers

 - December 12, 2006, 8:53 AM

BAE Systems has all but abandoned Europe. The British defense conglomerate is putting its money into North America, where the budgets are large and the risks are low. But the U.S. government has imposed major bureaucratic controls on all foreign entities that seek to share defense technology. So can BAE ever become a truly integrated transatlantic company?

The answer may lie in the progress of BAE’s Platforms Solutions Sector. The division, or sector, was formed two years ago when the company merged three UK and 10 U.S. locations, which together produce revenues of $1.2 billion and employ more than 6,500. “It is the first transatlantic entity in BAE,” said sector spokesman Larry Stone. The sector is one of four now managed by BAE North America–but it is the only one where British BAE locations report to managers in the U.S.

Platform Solutions offers electronic flight and engine controls, mission computers, cockpit displays and navigation systems. This equipment can be found on most U.S. combat aircraft, and the Eurofighter, Gripen, Hawk and Tornado in Europe.

The sector is also a major supplier to Airbus and Boeing, and has installed new technology on six U.S.-led helicopter programs. Platform Solutions traces its heritage to GEC-Marconi in the UK and Lear Astronics in the U.S. Its headquarters is at Johnson City, New York, formerly home to Lockheed Martin Control Systems.

“We’ve been very successful in integrating. We operate as one enterprise,” said Mike Austill, the sector managing director for avionics systems. One example is flight controls, where expertise resides not only in Johnson City, but also at Rochester (ex-Marconi site in the UK) and Los Angeles (ex-Lear). Another is inertial sensors, an activity that takes place at four sites in the U.S., and at Plymouth in the UK.

According to Stone, the benefits of these transatlantic combinations “outweigh the procedural hardships” caused by U.S. technology controls. One of the sector’s British marketers said that when BAE established Platform Solutions, there were problems in dealing with the ITARs (international trafficking in arms regulations). “We learned that you really have to think ahead to clear the bureaucratic hurdles,” he explained.

But problems remain, according to another British employee, who related his experience in attending meetings in the U.S., where “the discussion suddenly goes quiet, and I am asked to leave.”

Joe Parker, vice president for business development, listed nine areas where Platform Solutions expects to boost future sales. They include digital fly-by-wire for helicopters (notably via the Sikorsky S-92); day/night all-weather (DNAW) vision for landing and tactical flying (see box below); navigation (a silicon gyro “no bigger than a fingernail” that is already in mass production for ground vehicles) and helmet-mounted displays. As the chosen supplier to the Eurofighter and Gripen programs, Platform Solutions is hoping to leverage its binocular technology to provide an alternative to the monocular system developed by Rockwell Collins and Elbit for the Joint Strike Fighter.

Networkcentric Warfare

Like many other defense contractors today, Platform Solutions calls itself a leading player in networkcentric warfare. One of its specialties is in merging inputs from multiple sources into digital displays that can be easily comprehended by aircrews. “We’re shifting vast amounts of data. The clever stuff is to maintain the image quality,” noted one BAE manager. As a transatlantic company, BAE’s UK-based developers can take full advantage of leading-edge U.S. concepts, such as the global information grid.

Last August, BAE bought Boeing’s Commercial Electronics unit. Based in Irving, Texas, the division manufactures flight deck and data/electrical control systems. Platform Solutions already supplied flight control and other systems to Boeing, and the new acquisition “gives us a huge capability in commercial aviation,” Parker said. The sale terms do not preclude BAE from selling items produced at Irving to other airliner OEMs, such as Airbus, Bombardier or Embraer, he added.

Parker was speaking at the Rochester facility, which has been the world’s leading supplier of head-up displays for more than 30 years. Thousands of those HUDs fly on Lockheed Martin F-16s, which are good for many more years of service, and BAE is proposing an upgrade program that promises increased reliability, enhanced performance and reduced life-cycle costs. The up-front optics would be unchanged, but the analog back-end consisting of the cathode-ray tube and high-voltage power supply would be replaced by a digital light engine, that is, a laser illuminator.

BAE Platform Solutions will absorb some additional avionics facilities in the UK this year, as a result of the revised agreement between BAE and Finmeccanica, reached last January. But the bulk of BAE’s UK Avionics Group–including the key radar, electronic warfare, electro-optics and communications capabilities–are being sold to Finmeccanica, and will become part of Galileo Avionica. BAE will keep a 25-percent stake in the business for the time being.

Rochester’s success on the F-16 encouraged GEC-Marconi to expand in the U.S., just as BAE Systems has since done. But Peter Hearne, a key leader of the company in those days, recently had some harsh words to say about the U.S. attitude to transatlantic defense cooperation.

“There’s no special relationship in technology between the U.S. and the UK,” he told a Royal Aeronautical Society Annual Conference in April. “I spent a great deal of time on the subject. Every barrier was put up, and we weren’t allowed to direct our U.S. companies. The American managers tried to thwart the will of the British management. I believe that BAE is suffering from the same thing today.”

BAE Systems said recently that progress is being made–albeit slowly–on U.S. technology-sharing agreements. But CEO Mike Turner’s dissatisfaction with the ITAR system and other U.S. bureaucratic impediments is on the record.