Editing British Aerospace (section)

==History==
===Formation and privatisation===
The company has its origins in the [[Aircraft and Shipbuilding Industries Act 1977]], which called for the [[nationalisation]] and merger of the [[British Aircraft Corporation]], [[Hawker Siddeley Aviation]], [[Hawker Siddeley Dynamics]] and [[Scottish Aviation]]. On 29 April 1977, the new entity was formed in the United Kingdom as a statutory corporation.

{{anchor|British Aerospace Act 1980}}
{{Infobox UK legislation
| short_title           = British Aerospace Act 1980
| type                  = Act
| parliament            = Parliament of the United Kingdom
| long_title            = An Act to provide for the vesting of all the property, rights, liabilities and obligations of British Aerospace in a company nominated by the Secretary of State and the subsequent dissolution of British Aerospace; and to make provision with respect to the finances of that company.
| year                  = 1980
| citation              = [[List of acts of the Parliament of the United Kingdom from 1980|1980]] c. 26
| introduced_commons    = 
| introduced_lords      = 
| territorial_extent    = {{ubli|England and Wales|Scotland|Northern Ireland}}
| royal_assent          = 1 May 1980
| commencement          = 1 May 1980
| expiry_date           = 
| repeal_date           = 
| amends                = 
| replaces              = 
| amendments            = 
| repealing_legislation = 
| related_legislation   = {{ubli|[[Aircraft and Shipbuilding Industries Act 1977]]}}
| status                = current
| legislation_history   = 
| theyworkforyou        = 
| millbankhansard       = 
| original_text         = http://www.legislation.gov.uk/ukpga/1980/26/contents/enacted
| revised_text          = 
| use_new_UK-LEG        = yes
| UK-LEG_title          = British Aerospace Act 1980
| collapsed             = yes
}}
Under the provisions of the British Aerospace Act 1980 (c. 26), on 1 January the statutory corporation was transferred to a limited company, which then re-registered as a [[public limited company]] (plc), under the name "British Aerospace Public Limited Company", on 2 January 1981.<ref>Certificate of Incorporation on Re-Registration as Public Limited Company</ref> BAe was privatised in two main phases, the first in February 1981, involving 51.6% shares of the company, during which the public sale was 3.5 times subscribed and at the end of the first day's trading, share prices were 14% above the original offer price.<ref name=":0">{{Cite web |url=https://www.baesystems.com/en-uk/heritage/british-aerospace-uk |title=British Aerospace UK Heritage }}</ref> The second phase occurred in May 1985, in which 48.4% shares were sold; this sale was 5.4 times subscribed and the first day closing price was 11% above the initial offer price.<ref name=":0" /> The British Government maintained a £1 [[golden share]], which allowed it to [[veto]] foreign control of the board or company.<ref>{{cite web |work=[[Hansard|Parliamentary Debates (Hansard)]] |title=Written Answers&nbsp;— British Aerospace |url=https://api.parliament.uk/historic-hansard/written-answers/1980/dec/17/british-aerospace |date=17 December 1980 |quote=col. 179 |access-date=23 March 2008 |archive-date=14 January 2009 |archive-url=https://web.archive.org/web/20090114023827/http://hansard.millbanksystems.com/written_answers/1980/dec/17/british-aerospace |url-status=live }}</ref>

===Programmes===
[[File:German Panavia Tornado.JPG|thumb|A [[German Air Force]] [[Tornado IDS]] in flight, 2007]]
British Aerospace inherited a number of live development programmes from its predecessors. Scottish Aviation was working on a project for a 19-seat turboprop airliner, an upgraded version of the [[Handley Page Jetstream]]. BAe placed the [[British Aerospace Jetstream|Jetstream 31]] into production after the first flight of the prototype in March 1980. At the same time, production of Hawker Siddeley's [[British Aerospace 125|HS 125]] business jet, [[Hawker Siddeley Harrier|Harrier]] VTOL jet fighter and [[Hawker Siddeley HS 748|HS 748]] turboprop airliner continued under BAe, as did that of the [[Hawker Siddeley Trident|Trident]] jet airliner for a short time. Similarly, low-rate production of the [[BAC One-Eleven]] jet airliner, the [[BAC Strikemaster|Strikemaster]] two-seat military jet trainer/attack aircraft, and the iconic [[Concorde]] supersonic airliner also continued. 

On 29 July 1976, less than a year prior to BAe's formation, the contract for production of the first batch of the [[Panavia Tornado]], an advanced [[nuclear weapon|nuclear-capable]] fighter bomber, was signed.<ref name= 'Wellington'>Long, Wellington. [https://news.google.com/newspapers?id=BmAvAAAAIBAJ&sjid=2dwFAAAAIBAJ&pg=5323,4133149&dq=tornado+bomber&hl=en "Swing-Wing Wonder Weapon Is Going Into Production."] ''Ludington Daily News,''24 August 1976.</ref> It was developed and produced via a multinational company, [[Panavia Aircraft GmbH]], of which BAe was one of several companies to be heavily involved.<ref name='segell124'>Segell 1997, p. 124.</ref><ref name= '104replac'>Morris, Joe Alex Jr. "Messerschmitt Back in Business". ''[[St Petersburg Times]]''. 30 April 1969.</ref> On 10 July 1979, the [[maiden flight]] of a production Tornado occurred.<ref name="firstprdctn">{{cite web |url=https://www.panavia.de/nations/united-kingdom/ |title=Nations – United Kingdom |publisher=Panavia Aircraft GmbH |access-date=5 March 2019}}</ref> On 5 and 6 June 1979, the first aircraft were delivered to the RAF and [[German Air Force]] respectively.<ref>Middleton, Drew. [https://www.nytimes.com/1979/09/23/archives/west-germany-is-modernizing-military-forces-military-analysis.html "Military Analysis: West Germany Is Modernizing Military Forces."] ''[[New York Times]],'' 23 September 1979. Retrieved 23 September 1979.</ref> On 25 September 1981, the first Italian Tornado was delivered.<ref>Parsons, Gary. [https://web.archive.org/web/20040718075035/http://www.airsceneuk.org.uk/hangar/1999/TTTE/ttte.htm "TTTEnd of an era."] ''airsceneuk.org.uk''. Retrieved 19 January 2011.</ref> 

The Tornado would be produced in large numbers, the 500th aircraft to be completed was delivered to [[West Germany]] on 19 December 1987.<ref>Taylor 1987, p. 58.</ref> Production of the Tornado ended in 1998, the final batch being delivered to the [[Royal Saudi Air Force]], that had ordered a total of 96 IDS Tornados.<ref name=Janes_241>Jackson et al. 1998, p. 241.</ref> Aviation author Jon Lake noted that "The Trinational Panavia Consortium produced just short of 1,000 Tornados, making it one of the most successful postwar bomber programs".<ref>Lake 2002, pp. 446, 455.</ref>

In 1978, BAe relaunched the [[British Aerospace 146|BAe 146]], a [[short-haul]] [[regional airliner]] that had been previously worked on by Hawker Siddeley. The company marketed it as a quiet and economic [[turbofan]]-powered compact airliner that could replace the previous generation of [[turboprop]]-powered feeder aircraft.<ref name = "Hewish 857">Hewish 1982, p. 857.</ref> In 1982, the first completed aircraft made its first flight.<ref name="Velupillai 1244">Velupillai 1981, p. 1244.</ref><ref name = "Hewish 858">Hewish 1982, p. 858.</ref> Upon its launch into service the following year, it was hailed as being "the world's quietest jetliner".<ref>[https://books.google.com/books?id=yeMDAAAAMBAJ "Coming: Smaller Jetliners."] ''Popular Mechanics'', September 1984. 161(9), p. 98.</ref> In 1993, an upgraded model of the BAe 146, referred to as the ''Avro RJ'' series, superseded the original; changes included the replacement of the original Lycoming [[Honeywell ALF 502|ALF 502]] turbofan engines by higher-thrust [[Honeywell LF 507|LF 507]] turbofan engines, which were housed in redesigned [[nacelle]]s. The Avro RJ series also featured a modernised cockpit with [[EFIS]] replacing the analogue ADI, HSI, and engine instrumentation.<ref name=autogenerated1>{{cite news |url=http://www.vlmmagazine.com/features/2007/may/air_news.html |title=VLM Introduces Jet Aircraft |archive-url=https://web.archive.org/web/20080629062025/http://www.vlmmagazine.com/features/2007/may/air_news.html |archive-date=29 June 2008 |work=Velocity |date=May 2007 |access-date=2 January 2008}}</ref> Production of the Avro RJ ended with the final four aircraft being delivered in late 2003; a total of 173 Avro RJ aircraft was delivered between 1993 and 2003.<ref name = "flight global">[http://www.flightglobal.com/directory/detail.aspx?aircraftCategory=CommercialAircraft&manufacturerType=CommercialAircraft&navigationItemId=389&aircraftId=16&&searchMode=Manufacturer "Commercial Aircraft Directory – Avro RJ-85ER."] ''Flight Global'', Retrieved 14 November 2012.</ref>

[[File:DN-SC-87-05770.JPEG|thumb|A [[800 Naval Air Squadron|800 NAS]] Sea Harrier FRS1 from HMS ''Illustrious'' in post-Falklands War low-visibility paint scheme.|alt=Grey jet aircraft with black radome and large engine inlet hovering with undercarriage extended. It is obscuring another identical jet in the distance. Near the bottom of the photograph, taken out at sea, is the horizon]]
BAe developed several advanced models of the [[Harrier jump jet|Harrier]] family. In 1978, the [[Royal Navy]] received the first [[British Aerospace Sea Harrier|BAe Sea Harrier]] of an initial order for 24.<ref name="Bull 120">Bull 2004, p. 120.</ref><ref name="Grove">Grove 1987, pp. 319–320.</ref> The Sea Harrier was declared operational three years later, being initially embarked on both the first ''Invincible'' class aircraft carrier [[HMS Invincible (R05)|HMS ''Invincible'']], and the older [[HMS Hermes (R12)|HMS ''Hermes'']].<ref>{{cite journal |first= Terry |last= Ford |url= http://www.emeraldinsight.com/journals.htm?articleid=1683027&show=pdf |title= Sea Harrier – A New Dimension |journal= Aircraft Engineering and Aerospace Technology |location= Bradford, England |publisher= Emerald Group Publishing |volume= 53 |issue= 6 |pages= 2–5 |year= 1981 |issn= 1758-4213 |doi= 10.1108/eb035729 |url-status= live |archive-url= https://web.archive.org/web/20120405152509/http://www.emeraldinsight.com/journals.htm?articleid=1683027&show=pdf |archive-date= 5 April 2012 |df= dmy-all}}</ref> Following their decisive role in the 1982 [[Falklands War]],<ref>{{cite news |url= https://news.google.com/newspapers?id=T3MhAAAAIBAJ&pg=3796,8465827&dq=sea+harrier&hl=en |title= Sea Harrier changes face of air warfare |newspaper=Tri City Herald |first= Patrick J |last= Sloyan |date= 23 May 1982}}{{dead link|date=January 2014}}</ref> several of the lessons learnt from the conflict shaped a new upgrade programme for the fleet authorised in 1984, resulting in the ''Sea Harrier FRS.2'' (later known as ''FA2''). The first flight of the prototype took place in September 1988 and a contract was signed for 29 upgraded aircraft in December of that year.<ref name='janesx'>{{cite journal|url=http://defense-archive.teldan.com/Article/First-Flight-for-Sea-Harrier-FRS.aspx?sID=277683 |title=First Flight for Sea Harrier FRS2 |publisher=Janes Defense Weekly |volume=10 |issue=13 |page=767 |date=1 November 1988}}{{dead link|date=June 2016|bot=medic}}{{cbignore|bot=medic}}</ref> The Sea Harrier FA2 was fitted with the [[Blue Vixen]] radar, which was described as one of the most advanced [[pulse doppler radar]] systems in the world.<ref>{{cite web |url= http://www.flightglobal.com/news/articles/harrier-high-206520/ |title= Harrier high |first= Craig |last= Hoyle |work= [[FlightGlobal]]|date= 9 May 2006 |access-date= 31 December 2013 |url-status= live |archive-url= https://web.archive.org/web/20140101052343/http://www.flightglobal.com/news/articles/harrier-high-206520/ |archive-date= 1 January 2014 |df= dmy-all}}</ref>

In August 1981, BAe and the American aircraft manufacturer [[McDonnell Douglas]] signed a [[memorandum of understanding]] regarding the [[McDonnell Douglas AV-8B Harrier II]].<ref name=Wilson_p26>Wilson 2000, p.&nbsp;26.</ref> Under this agreement, BAe was effectively a [[subcontractor]] rather than a full partner, receiving 40 per cent of the airframe's work-share in terms of man-hours.<ref name=Wilson_p26/> Production took place at McDonnell Douglas' facilities in suburban [[St Louis]], [[Missouri]], and manufacturing by BAe at its [[Kingston upon Thames|Kingston]] and [[Dunsfold]] facilities in [[Surrey]], England.<ref>Gaines 1985, p.&nbsp;148.</ref> The variant procured for the RAF, which was known as the [[British Aerospace Harrier II|BAe Harrier II]], featured many differences, including avionics fit, armaments and equipment; the wing of the GR5 featured a stainless steel leading edge, giving it different flex characteristics from the AV-8B.<ref>"Aerospace, Volume 20." ''Royal Aeronautical Society,'' 1993, p. 14.</ref> In December 1989, the first RAF squadron to be equipped with the Harrier II was declared operational.<ref name ="Nordeen 68">Nordeen 2006, p. 68.</ref>

In 1979, BAe officially joined the multinational aircraft manufacturer [[Airbus]] and acquired a 20% share in the venture,<ref>{{cite news |url = http://seattletimes.nwsource.com/news/business/757/ |work=[[The Seattle Times]] |title = A special report on the conception, design, manufacture, marketing and delivery of a new jetliner—the Boeing 757 |first = Peter |last = Rinearson |date = 19 June 1983}}</ref><ref name="airbus5">{{cite web |url = http://www.airbus.com/company/history/the-narrative/technology-leaders-1977-1979/ |publisher = Airbus |title = History – Technology leaders |access-date = 30 September 2009 |archive-url = https://web.archive.org/web/20150925104335/http://www.airbus.com/company/history/the-narrative/technology-leaders-1977-1979/ |archive-date = 2015-09-25 |url-status = dead }}</ref> the move effectively reversed a decision made ten years prior in which the UK government had withdrawn its support for the Airbus consortium. Airbus' first aircraft, the [[Airbus A300|A300]], had been received with little initial demand,<ref>{{cite magazine|url = http://www.time.com/time/magazine/article/0,9171,915633,00.html |archive-url = https://web.archive.org/web/20081215112454/http://www.time.com/time/magazine/article/0,9171,915633,00.html |url-status = dead |archive-date = 15 December 2008 |title = Now, the Poor Man's Jumbo Jet |magazine=[[Time (magazine)|Time]] |date = 17 October 1977}}</ref> but orders for the airliner had picked up in the late 1970s.<ref>{{cite news|url = http://select.nytimes.com/gst/abstract.html?res=F50B11F93F5513728DDDAE0894DC405B888BF1D3 |title = Eastern accepts $778&nbsp;million deal to get 23 Airbuses |work=[[The New York Times]] |date = 7 April 1978 |first = Richard |last = Witkin}}</ref><ref>{{cite web|url = https://news.google.com/newspapers?id=DXgQAAAAIBAJ&pg=2954,5223070&dq=a300+airbus&hl=en |title = Airbus funds flow on |work=The Age |location=Australia |date = 11 December 1979 |first = Gerry |last = Carman}}{{dead link|date=June 2011}}</ref> By 1979, the consortium had 256 orders for A300,<ref>{{cite news|url = http://news.bbc.co.uk/2/hi/business/802741.stm |title = The Airbus fight to stay ahead |work=[[BBC News]]|date = 23 June 2000 | access-date=4 September 2011}}</ref> and Airbus had launched its second airliner, the [[Airbus A310|A310]], less than 12 months prior to BAe formally joining the consortium.<ref name="airbus5"/> As time went on, it was becoming clear that Airbus was no longer a temporary collaboration to produce a single design as per its original mission statement; it had become a long-term brand for the development of further aircraft. By the late 1980s, work had begun on a pair of new wide-body airliners, the biggest to be produced at this point under the Airbus name; these would be launched in the 1990s as the [[Airbus A330]] and the [[Airbus A340]].<ref>Frawley, Gerald. "Airbus A330-200". "Airbus A330-300". ''The International Directory of Civil Aircraft, 2003/2004''. Aerospace Publications, 2003. {{ISBN|1-875671-58-7}}.</ref><ref>{{cite news  |title=Airbus faces critical decision in coming months  |agency=Reuters  |date=26 December 2001  |url=http://nl.newsbank.com/nl-search/we/Archives?p_product=CSTB&p_theme=cstb&p_action=search&p_maxdocs=200&p_topdoc=1&p_text_direct-0=0EB36D3CA3B32C67&p_field_direct-0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM  |archive-date=8 June 2011  |access-date=8 November 2020  |archive-url=https://web.archive.org/web/20110608191523/http://nl.newsbank.com/nl-search/we/Archives?p_product=CSTB&p_theme=cstb&p_action=search&p_maxdocs=200&p_topdoc=1&p_text_direct-0=0EB36D3CA3B32C67&p_field_direct-0=document_id&p_perpage=10&p_sort=YMD_date:D&s_trackval=GooglePM  |url-status=dead  }}</ref>

[[File:British_Aerospace_EAP_at_the_Farnborough_Air_Show,_1986.jpg|thumb|A [[British Aerospace EAP]] at the [[Farnborough Air Show]], 1986]]
During the 1983 [[Paris Air Show]], the launch of the ''[[British Aerospace EAP|Experimental Aircraft Programme]]'' (EAP) to develop and fly an advanced fighter technology demonstrator was announced; at this point, the effort was intended to be a partnership between Britain and several of its European neighbours, including West Germany and Italy.<ref name = "cos timeline">[https://www.rafmuseum.org.uk/documents/collections/X005-5992-BAe-EAP-ZF534.pdf "BAe EAP ZF534: Museum Accession Number X005-5992."] ''Royal Air Force Museum Cosford'', Retrieved: 22 June 2019.</ref><ref name = "bae hist">[https://www.baesystems.com/en/heritage/british-aerospace-eap----experimental-aircraft-programme "BAe EAP."] ''[[BAE Systems]]'', Retrieved: 22 June 2019.</ref> The resulting aircraft, the [[British Aerospace EAP]], ended up being primarily developed by BAe as a private venture; it formed the basis for the multinational [[Eurofighter Typhoon]]. In 1986, in conjunction [[Alenia Aeronautica]], [[Construcciones Aeronáuticas SA|CASA]] and [[DaimlerChrysler Aerospace AG|DASA]], BAe formed [[Eurofighter GmbH]] for the development and production of the Eurofighter.<ref>Cowton, Rodney (7 June 1986). "Eurofighter partners: West Germany, Britain, Italy and Spain". ''[[The Times]]''.</ref> The multinational organisation's head office was established in [[Hallbergmoos]], Bavaria, Germany.<ref>{{cite web|url=http://www.eurofighter.com/impressum0.html |title=Impressum: Eurofighter Jagdflugzeug GmbH Am Söldnermoos 17 D-85399 Hallbergmoos Germany |publisher=Eurofighter |access-date=17 September 2011}}</ref> The [[maiden flight]] of the Eurofighter prototype took place in Bavaria on 27 March 1994, flown by DASA chief test pilot Peter Weger.<ref name="maiden">[http://news.bbc.co.uk/onthisday/hi/dates/stories/march/27/newsid_2531000/2531051.stm "1994: Maiden flight for future fighter jet."] ''BBC News'', 27 February 1994. Retrieved: 19 March 2008.</ref> On 30 January 1998, the first production contract for the Eurofighter was signed between Eurofighter GmbH, engine manufacturer [[EuroJet Turbo GmbH|Eurojet]] and the [[NATO Eurofighter and Tornado Management Agency]], the organisation set up to manage the procurement of the aircraft.<ref name="BBC">[http://news.bbc.co.uk/1/hi/world/europe/52066.stm BBC "Euro-fighter contracts signed."] ''BBC News'', 30 January 1998. Retrieved: 18 September 2007.</ref>

On 26 September 1985, the UK and Saudi Arabian governments signed the [[Al-Yamamah arms deal]] with BAe as prime contractor. The contracts, extended in the 1990s and never fully detailed, involved the supply of [[Panavia Tornado]] strike and air defence aircraft, [[BAe Hawk]] trainer jets, [[Rapier missile]] systems, infrastructure works and naval vessels.<ref>{{cite news | first = Michael | last = Donne | title = BAe Hands Over First Part of Saudi Aircraft Order | work = [[Financial Times]] | page = 6 | date = 12 August 1987}}</ref> The Al Yamamah deals are valued at anything up to £20 billion and still continue to provide a large percentage of BAE Systems' profits.<ref>{{cite news | first = Nic| last = Fildes| url =http://business.timesonline.co.uk/article/0,,13130-2319186,00.html | title =BAE confirms £5bn Eurofighter sale to Saudi Arabia | work =The Times| date =19 August 2006 | access-date =19 August 2006 | location=London}}{{dead link|date=September 2024|bot=medic}}{{cbignore|bot=medic}}</ref><ref>{{cite news | last = Steiner | first = Rupert | title = BAE clinches new £2.5bn Tornado deal with Saudis | work= [[The Business (magazine)|The Business]] | date = 10 September 2006 | url = http://www.thebusinessonline.com/Stories.aspx?BAE%20clinches%20new%20%C2%A32.5bn%20Tornado%20deal%20with%20Saudis&StoryID=CCB0F5FD-9EAB-4177-ACEE-4288DA084899&SectionID=F3B76EF0-7991-4389-B72E-D07EB5AA1CEE | access-date = 12 September 2006 }}{{Dead link|date=September 2018 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

===Acquisitions and restructuring===
BAe acquired [[Royal Ordnance]], the British armaments manufacturer, for £190&nbsp;million on 22 April 1987. The German armaments specialist [[Heckler & Koch]] was folded into this division after BAe acquired it four years later.

In 1988, BAe purchased the [[Rover Group]] from the British government of [[Third Thatcher ministry|Margaret Thatcher]] for £150 million. The sale was controversial due to opaque financial arrangements between the government and BAe; however the House of Commons [[Business and Enterprise Select Committee|Trade and Industry Committee]] was said to believe that "in spite of a catalogue of complaints, the committee concludes that the sale to BAe may well have been the best solution for the government."<ref>Cassell, Michael (February 22, 1991). "The Rover Report; 'British Aerospace drove a hard bargain{{'"}}. ''Financial Times''.</ref>

In 1991, BAe acquired a 30% interest in [[Hutchison Telecommunications]] through a [[stock swap]] deal, where Hutchison was given a controlling stake of 65% in BAe's wholly owned subsidiary [[Microtel Communications Ltd]].<ref name=BAE-H-33>{{cite news |title=The Facts : 2004 |url= http://www.na.baesystems.com/PressKit/Facts.pdf |publisher =na.baesystems.com|page =107|access-date =9 June 2012|url-status =dead|archive-url = https://web.archive.org/web/20070125134301/http://www.na.baesystems.com/PressKit/Facts.pdf |archive-date =25 January 2007|df =dmy-all}}</ref><ref name=BAE-H-38/><ref name=OBS-H-04>{{cite web |url=http://licensing.ofcom.org.uk/radiocommunication-licences/mobile-wireless-broadband/cellular-wireless-broadband/policy-and-background/history-of-cellular-services/ |title=History of Cellular services |access-date=9 June 2012 |publisher=licensing.ofcom.org.uk |url-status=dead |archive-url=https://web.archive.org/web/20130205065028/http://licensing.ofcom.org.uk/radiocommunication-licences/mobile-wireless-broadband/cellular-wireless-broadband/policy-and-background/history-of-cellular-services/ |archive-date=5 February 2013}}</ref> In August 1991, BAe formed a naval systems joint venture, [[BAeSEMA]], with the [[Sema Group]].<ref name=BAE-H-33/> BAe acquired Sema's 50% share in 1998. That year also saw BAe begin to experience major difficulties. BAe saw its share price fall below 100p for the first time. On 9 September 1991, the company issued a profits warning and later that week "bungled" the launch of a £432 million [[rights issue]].<ref>{{cite news |first = Paul |last = Betts | title = Leader toppled by unstoppable momentum | work = Financial Times | page = 28 | date = 26 September 1991 <!--| access-date = 7 December 2006 -->}}</ref> On 25 September 1991 BAe directors led by CEO [[Richard Evans (businessman)|Richard Evans]] ousted the Chairman Professor Sir Roland Smith in a move described by ''[[The Independent]]'' as "one of the most spectacular and brutal boardroom coups witnessed in many years."<ref>{{cite news |first = Michael |last = Harrison |title = Roland Smith ousted by boardroom coup at BAe |work =[[The Independent]]|publisher=Newspaper Publishing plc |page = 1 |date = 26 September 1991 <!--|access-date=7 December 2006 -->}}</ref> Evans described the troubles as a confluence of events:<ref>Evans, Richard (1999). ''Vertical Take-off'', p. 2. London: Nicholas Brealey Publishing. {{ISBN|1-85788-245-8}}.</ref>
<blockquote> "our property company [Arlington Securities] was hit with a lousy market. Sales of the Rover Group sank by about a fifth and losses mounted. The government's defence spending volumes underwent a major review. Losses in our commercial aerospace division increased dramatically with the recession in the airline industry."</blockquote>

In mid-1992, BAe wrote off £1 billion of assets, largely as part of [[Layoff|redundancies]] and restructuring of its regional aircraft division.<ref name="BAe soars">{{cite news |url=http://www.heraldscotland.com/sport/spl/aberdeen/bae-soars-out-of-the-red-1.741912 |first = Chris |last = Stone |title = BAe soars out of the red |work=The Herald |publisher=Caledonian Newspapers Ltd. |pages = 3, 7 |date = 16 September 1993 |access-date = 7 December 2006}}</ref> This was the largest asset write-off in UK corporate history. [[General Electric Company]] (GEC), later to sell its defence interests to BAe, came close to acquiring BAe at this time.<ref name="BAe soars"/> BAe cut 47% of its workforce (60,000 out of 127,000), 40,000 of which were from the regional aircraft division.

Evans decided to sell non-core business activities, which included the Rover Group, Arlington Securities, BAe Corporate Jets, BAe Communications and [[Ballast Nedam]]. Although the rationale of diversification was sound (to shield the company from cyclical aerospace and defence markets) the struggling company could not afford to continue the position: "We simply could not afford to carry two core businesses, cars and aerospace. At one point Rover was eating up about £2 billion of our banking capacity."<ref>Evans, Richard (1999). ''Vertical Take-off'', p. 6. London: Nicholas Brealey Publishing. {{ISBN|1-85788-245-8}}.</ref> BAe Corporate Jets and Arkansas Aerospace were sold to [[Raytheon]] in 1993. In 1994, the Rover Group was sold to [[BMW]] and [[British Aerospace Space Systems]] was sold to [[Matra Marconi Space]]. In 1998, BAe's shareholding of [[Orange SA|Orange plc]] was reduced to 5%.<ref name=BAE-H-38>{{cite news |title = BAe's record-breaking sterling Eurobond issue |url = http://www.treasurers.org/system/files/TTOct99Brake14-15.pdf |date = 22 June 1999 |access-date = 11 June 2012 |archive-url = https://web.archive.org/web/20130507093254/http://www.treasurers.org/system/files/TTOct99Brake14-15.pdf |archive-date = 7 May 2013 |url-status = dead }}</ref> The Orange shareholding was a legacy of the 30% stake in Hutchison Telecommunications (UK) Ltd.

In 1994, BAeSEMA, [[Siemens Plessey]] and [[Marconi Electronic Systems|GEC-Marconi]] formed UKAMS Limited as part of the [[PAAMS|Principal Anti-Air Missile System]] (PAAMS) consortium. UKAMS would become a wholly owned subsidiary of BAe Dynamics in 1998. In 1995, [[Saab AB|Saab Military Aircraft]] and BAe signed an agreement for the joint development and marketing of the export version of the [[JAS 39 Gripen]]. In 1996, BAe and [[Matra Defense]] agreed to merge their missile businesses into a joint venture called [[Matra BAe Dynamics]].<ref>BAe confirms Matra venture, ''Financial Times'' (London), August 17, 1996</ref> In 1997, BAe joined the [[Lockheed Martin]] [[F-35 Lightning II|X-35 Joint Strike Fighter]] team.<ref>August, Oliver (June 19, 1997). "BAe in JSF link with Lockheed". ''The Times''.</ref> The following year, BAe acquired the UK operations of [[Siemens Plessey|Siemens Plessey Systems]] (SPS) from [[Siemens]], while DASA purchased SPS' German assets.<ref name=SP-H-01/><ref name=SP-H-02/>

In the 1990s, BAe was the largest exporter based in the United Kingdom; a [[Competition Commission]] report released in 2005 calculated a ten-year aggregate figure of £45 billion, with defence sales accounting for approximately 80%.<ref>Competition Commission (1995) {{usurped|1=[https://web.archive.org/web/20050302075701/http://www.competition-commission.org.uk/rep_pub/reports/1995/fulltext/364c3.pdf British Aerospace Public Limited Company and VSEL Plc: A report on the proposed merger]}} p. 28.</ref>

===Transition to BAE Systems===
In the late 1990s, European defence consolidation became a prevailing practice; European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.<ref>{{cite news|title=Business: The Company File: Defense merger on the radar |url=http://news.bbc.co.uk/1/hi/business/the_company_file/130305.stm |work=BBC News |date=10 July 1998 |access-date=15 September 2007}}</ref> This ambition led to numerous reports linking various European defence groups – mainly with each other but also with American defence contractors. In July 1998, merger discussions began between BAe and DASA.<ref>{{cite news|title=BAe and Dasa discuss proposals for merger: Aerospace groups still have 'important issues to resolve'|work=Financial Times |page=1 |date=24 July 1998}}</ref> Terms for such a merger had been reportedly agreed between British Aerospace Chairman [[Richard Evans (businessman)|Richard Evans]] and DASA CEO [[Jürgen E. Schrempp|Jürgen Schrempp]] in December 1998.<ref name="ftBAeDASA">{{cite news |first=Peter |last=Spiegel|title=The largest aerospace companies gather next week for the Farnborough air show but the event will be without its long-time unofficial host|work=Financial Times|page=11|date=17 July 2004}}</ref><ref>{{cite news |last=Spiegel |first =Peter |title=End of an era at BAE: how Sir Richard Evans changed the UK defence industry |newspaper=Financial Times |date =17 July 2004}}</ref> However, when the British [[General Electric Company plc|General Electric Company]] (GEC) put its defence electronics business [[Marconi Electronic Systems]] (MES) up for sale on 22 December 1998, BAe's management opted to abandon the DASA merger in favour of purchasing its British rival.<ref>BAE Systems Annual Report 1999 22. BAE Systems plc (2000). Retrieved on 27 October 2006.</ref><ref name="scotsman2000">{{cite news|first=Andrew|last=Turpin|title=BAE eyes US targets after profit rockets|work=The Scotsman|publisher=The Scotsman Publications|page=26|date = 4 March 2000}}</ref> During 2004, Evans stated that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.<ref name="ftBAeDASA" />

Schrempp was angered by BAe's reversal, and opted to pursue other partner companies for DASA to merge with. On 11 June 1999, the Spanish aircraft company [[CASA (aircraft manufacturer)|CASA]] signed a memorandum of understanding for such a merger.<ref>{{cite news |first=David |last=White|author2=Nicoll, Alexander |title=DaimlerChrysler wins fight for Spain's Casa: Deal boosts aerospace industry consolidation in Europe|work=Financial Times|date=1999-06-12}}</ref> On 14 October 1999, DASA agreed to merge with Aérospatiale-Matra to create the [[European Aeronautic Defence and Space Company]] (EADS).<ref>{{cite news |first=Alexander |last=Nicoll |author2=Skapiner, Michael |title=Flying in formation: The merger of DaimlerChrysler Aerospace and Aérospatiale-Matra may pave the way for a larger European grouping or the first transatlantic defence tie-up, argue Alexander Nicoll and Michael Skapinker |work=Financial Times|date=1999-10-15}}</ref> 10 July 2000 was "day one" for the new company, which became the world's second-largest aerospace company after [[Boeing]] and the second-largest European [[arms industry|arms manufacturer]] after BAE Systems.<ref>{{cite web|url=http://www.eads.eu/1024/en/eads/history/chronos/2000.html |title=History of EADS |publisher=EADS |access-date=2009-10-07 |url-status=dead |archive-url=https://web.archive.org/web/20080603121737/http://www.eads.eu/1024/en/eads/history/chronos/2000.html |archive-date=3 June 2008 }}</ref>

The GEC merger to create a solely British company, compared to the prospective Anglo-German company that would have resulted from merging with DASA, was promoted as having superior prospects for further penetration of the lucrative defence market of the United States. The newly combined company, which was initially referred to as "New British Aerospace", was officially formed on 30 November 1999; it is named [[BAE Systems]].<ref>{{cite web |url=https://www.theguardian.com/business/1999/jan/19/7 |title=BAe set to sign A8bn GEC deal with merger |work=The Guardian |date=19 January 1999}}</ref>