Globalizing aerospace Sanders and other Lockheed Martin units to join BAE Systems

By John McHale

BETHESDA, Md. — Sanders, the Nashua, N.H.-based portion of Lockheed Martin Corp., is set to change hands, which experts say will bolster Sanders's prowess as a merchant supplier in high-technology areas such as electronic warfare.

BAE Systems North America of Rockville, Md., will acquire Lockheed Martin's Aerospace Electronics Systems (AES) business, which includes Sanders, Fairchild Systems, and Space Electronics &#amp;Communications with facilities in New Hampshire, New York, and Virginia.

"BAE systems North America may not be the most dominant player in electronic warfare, but with the purchase of AES," it has become one of the major forces, says Robert Hoffman, director of corporate communications for BAE Systems North America. Before the AES purchase BAE Systems North America had approximately 18,300 employees and $2.5 billion in business, Hoffman continues, and with the acquisition BAE's numbers improve to about 25,000 employees and $4 billion in business.

The main customer in North America, the U.S. Department of Defense is looking to industry to provide a system of systems made up of commercial-off-the-shelf (COTS) technology whenever and wherever possible, and with the acquisition of companies like Sanders BAE is a step ahead, he adds.

The sale includes the radiation-hardening integrated circuit fabrication facility in Manassas, Va. BAE purchased the units for $1.67 billion in cash.

Responding to rumors that BAE would shut down Lockheed's Manassas fabrication facility, Hoffman says discussion of any facility closures or layoffs at this time is premature and inappropriate considering final government approval of the transaction has not been completed. Such topics have not been discussed at BAE where it is company tradition to grow the units it purchases, he adds. For example, two years after BAE purchased Tracor in 1998, the company has gone from a 9 percent investiture in jobs to 20 percent, he claims.

The parent company, BAE Systems Plc. of Farnborough, England, is a combination of British Aerospace and Marconi Electronic Systems. The sale to BAE Systems is one of the first moves in what many experts consider to be the globalization of the aerospace industry.

However, Hoffman emphasizes there is a firewall with regards to security clearance between BAE Systems North America and the parent company, BAE Systems Plc. — the North American subsidiary, a separate U.S. company with a separate board of directors, has security clearance with the U.S. Government to work on classified military platforms while the English parent does not, Hoffman continues.

BAE Systems has a strong record on security with U.S. government going back 10 years due to its Marconi connection [BAE Systems merged with Marconi Electronic Systems during the late 1990s], Hoffman says., he adds. The agreement was resigned with the AES transaction, he adds.

The sale of the Lockheed Martin units to BAE also will move Lockheed Martin back to its core competencies as a platform provider, says Rob McDaniel, director of program operations at Sanders Advanced Systems &#amp;Technologies Division in Nashua, N.H.

Sanders made its name providing electronic warfare systems and will continue to support all its programs despite the ownership change, McDaniel says. Sanders will also retain the name it has earned for now, but as a BAE Systems company, he adds.

However, it is still too premature to discuss the long-term future of the Sanders name, Hoffman says. Once all the details of the transaction have been completely settled, the company's nomenclature will be decided by BAE together with Sanders management, he adds.

Sanders works with BAE on the Joint Strike Fighter and the United Kingdom AH-64 Apache helicopter program, says a Sanders representative.

Major Lockheed Martin AES products include aircraft self-protection systems, tactical surveillance and intelligence systems, reconnaissance and navigation systems, automated mission planning systems, microwave electronics, infrared sensors, and radiation-hardened digital components and systems for space applications. The AES businesses, with approximately 5,300 employees, had equivalent 1999 revenues of $1.2 billion, Lockheed officials say.

The transaction will also promote improved interoperability and cooperation between the armed forces of the U.S. and its allies, says Robert B. Coutts, executive vice president of the Lockheed Martin Systems Integration business area. "By advancing transatlantic industry consolidation, as U.S. defense leaders have recently urged, we are confident we will receive all necessary government approvals in a timely manner," Coutts adds.

The proposed transaction, which is subject to regulatory approvals, is expected to close around year-end 2000. The deal will yield approximately $1.3 billion in cash to Lockheed Martin after transaction costs and associated federal tax payments. Lockheed Martin expects to apply the bilk of this cash to debt reduction, Lockheed officials say AES was among several operations identified by Lockheed Martin as candidates for potential divestiture in September 1999, Lockheed officials say. Lockheed Martin divested its Hanford Corp. subsidiary in December 1999, announced the proposed sale of its Control Systems business to BAE Systems North America in April 2000, and currently is evaluating other divestiture candidates, including its state and local government services business.

Easily post a comment below using your Linkedin, Twitter, Google or Facebook account.

The Innovation That Matters™ Quiz

Innovation is one of the key drivers in the Defense industry. View this short video of Leon Woo, VP of Engineering at Mercury Systems, on the role of innovation. Then, answer 3 simple questions correctly to be entered into a drawing to win an Eddie Bauer fleece jacket!


Military & Aerospace Photos

Related Products

RR2P Removable Canister RAID System

Transportable data storage for mobile field use aboard planes, ships and ground transport. 2U, du...

API DC Link Power Film Capacitors

High reliability DC link capacitors for power inverter applications which require superior life e...

XPort9200 Conduction- or Air-Cooled 12-Channel High-Speed CAN Bus XMC or PMC

The XPort9200 is a conduction- or air-cooled 12-channel CAN bus XMC or PMC module. Each high-spee...

Related Companies

Winchester Systems Inc

At its founding in 1981, Winchester Systems introduced its first 5 MB disk system for Intel development system users....

API Technologies Corp

Who We Are API Technologies is a dominant technology provider of RF/microwave, microelectronics, and security technol...

Extreme Engineering Solutions Inc (X-ES)

 Extreme Engineering Solutions, Inc. (X-ES) is a leader in the design, manufacture, and support of standard and ...
Wire News provided by   

Most Popular Articles


Meeting the Gen3 backplane challenge with OpenVPX and COTS

Tight Pentagon budgets mean military systems must stay in the field for longer than ever before. This doesn't mean obsolete technology, however. Today's military electronics are being upgraded constantly, an...
Sponsored by:

Digital signal processing for signals intelligence and electronic warfare

Military & Aerospace Electronics presents an expert Webcast on the design considerations for blending general-purposes processors (GPUs), general-purpose graphics processors (GPGPUs), field-programmable ...
Sponsored by:

Advantages of Intel Architecture Products and Wind River Solutions in Military & Aerospace Applications

This webinar explains the individual advantages of the Intel Architecture hardware, available for long-life supply, and the WRS software portfolio.  There are extraordinary advantages of combining such ...
Sponsored by:

social activity

All Access Sponsors

Mil & Aero Magazine

February 2014
Volume 25, Issue 2

Download Our Apps




Follow Us On...


Military & Aerospace Electronics

Weekly newsletter covering technical content, breaking news and product information

Defense Executive

Monthly newsletter covering business news and strategic insights for executive managers

Embedded Computing Report

Monthly newsletter covering news on embedded computing in aerospace, defense and industrial-rugged applications

Unmanned Vehicles

Monthly newsletter covering news updates for designers of unmanned vehicles