GEC in Italian job to boost defence

GEC in Italian job to boost defence
?1bn link up with Italian defence firm Alenia strengthens GEC’s European lead. Richard Wilson. GEC has clinched a ?1bn European link-up for its Marconi defence business. A joint venture company between GEC-Marconi and Italy’s largest defence firm Alenia could prove the trigger for GEC to form a wider international defence grouping. The plan brings together the two firm’s radar and electronic warfare system activities into a 50-50 Anglo-Italian joint venture that will have sales approaching ?1bn. It will involve 6,000 staff at Chelmsford and Donibristle. The deal will strengthen GEC-Marconi’s position as Europe’s leading supplier of military radar systems to defence projects such as the ?40bn Eurofighter 2000. One of the deal’s chief architects is Peter Brown, managing director of GEC-Marconi Radar and Defence Systems, who is expected to take a leading role in the new Marconi Alenia Defence business. In addition to military radar there are also electronic warfare activities such as missile guidance systems to be wrapped up into the new business. It is the first international partnership forged under the reign of GEC’s managing director Lord George Simpson. An earlier tie-up with Thomson-CSF never got off the drawing board. Although smaller, the Alenia deal marks the first step towards reconstructing the GEC group of companies, which has been subject to sell-offs over the past 18 months. While speculation has centred around a “mega-UK” defence tie-up between GEC and British Aerospace, the Alenia deal could signify that Simpson favours several smaller strategic alliances worldwide to build up Marconi’s presence in specific foreign markets. Industry sources suggest that GEC is lining up further partnerships for the defence business, and these are most likely to be in the US. GEC would also inevitably be involved in any “super-Euro” defence grouping which is now the subject of government discussions around Europe. Last week the big three defence and aerospace manufacturers of BAe, Aerospatiale of France, Dasa of Germany made positive noises about the European link up, but state-control of Aerospatiale is still seen as a major obstacle.


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