UK defense company changing its stripes?

Stephen Beard Oct 23, 2006


SCOTT JAGOW: You remember a while back, there was that big controversy over a company from Dubai operating U.S. ports? Congress got involved. There was a lot of talk about national security. The deal eventually went through, but the company agreed to sell its U.S. port assets.Well, Britain’s biggest defense contractor could become an American company. So how does the British government feel about that? Stephen Beard reports from London.

STEPHEN BEARD: Most countries might be rather nervous if their main defense company switched its headquarters abroad. But not Britain.

The UK’s defense procurement minister says he would not object if BAE Systems shifted its base to the U.S.

The company is already half American. Fifty percent of its shareholders are U.S. residents. Almost 40 percent of its revenue comes from the Pentagon.

Nevertheless, the British Government’s attitude is remarkable says Andrew Hilton of the CSFI think tank.

ANDREW HILTON: Moving the control and the command structure for your major defense overseas — even to an obvious ally like the United States — has to make it harder for London to control what that company has on offer.

But the minister says that he would insist on the company continuing to supply the UK’s defense needs and without cutting its manufacturing capacity in Britain.

In London, this is Stephen Beard for Marketplace.

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