Page 57 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

The UK Defence Industry in the 21 Century
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The Five Forces of Americanisation

Look at how many Hawks we have sold overseas, how successful we have been as a business in exporting. I
believe we are the number one manufacturing exporter from the UK. We only export because we are
competitive. We are competitive in world terms”. He should know: before becoming CEO, he took on the
role of running the Kingston business unit, bringing the Hawk production line up to modern standards of
efficiency.
(Author’s notes)

5. Bribery Allegations and BAE
“BAE Systems was accused of corruption, specifically making bribes, in regard to the Al Yamamah arms
agreement with the Saudi Arabian Government. This was investigated by the Serious Fraud Office (SFO)
following the leaking of a letter from the then Director of the SFO to the former Permanent Secretary at the
Ministry of Defence. The SFO discontinued its inquiry in December 2006, citing the need to safeguard
national and international security, a move which was supported by the then Prime Minister, Tony Blair. A
legal challenge that the SFO's decision was unlawful was not successful.
“In addition to the allegations surrounding Al Yamamah, parallel SFO investigations were also conducted
into a number of other BAE defence contracts in South Africa, Chile, the Czech Republic, Romania, Tanzania
and Qatar. In February 2010, BAE Systems reached a settlement with the US Department of Justice (DoJ) to
plead guilty of conspiring to make false statements to the US Government in connection with certain
regulatory filings and undertakings, including the Al Yamamah agreement as well as contracts with the
Hungarian and Czech governments.
“In March 2010, BAE Systems pleaded guilty to conspiring to defraud the United States by impairing and
impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act compliance
program, and to violate the Arms Export Control Act and International Traffic in Arms Regulations. It was
given a $400 million fine and agreed to take measures in order to stay within US and foreign laws concerning
corruption and the exports of arms. The company also agreed to retain an independent compliance monitor
for three years to assess its compliance program and to make a series of reports to the company and the
DoJ.”
rd
(House of Commons Library, 3 March, 2010)
6. Prime Minister Margaret Thatcher was particularly receptive to sales campaign briefings prior to meetings
with foreign leaders, from President Reagan at Camp David (on the Rapier Air Defence System) to President
Mikhail Gorbachev at dinner in Downing Street (regarding BAe 146 Regional Aircraft assembled and
operated across the emerging new Russian Federation), where Robert Maxwell, then owner of the British
Printing Corporation and said to be a confidant of Gorbachev, also received a pre-dinner briefing from BAE
CEO Sir Raymond Lygo. (Author’s notes)

7. “The Westland Affair”: the UK’s Westland Helicopters, bidding to meet the
MoD’s requirement for a new helicopter, was in financial difficulties. Defence
Secretary, Michael Heseltine, favoured a European solution, integrating
Westland with a consortium including British Aerospace (BAe), Italian
(Agusta) and French companies. Prime Minister Thatcher and Trade and
Industry Secretary Leon Brittan, while ostensibly maintaining a neutral
stance, wanted to see Westland merge with Sikorsky, an American company.
The disagreement became increasingly heated, with BAe CEO Sir Raymond
Lygo a central figure, and ultimately caused the resignations of both
Heseltine and Brittan
(Less than a year later, Sir Raymond confided “if you’d been there with me,
taking notes, ****(he)***** wouldn’t have tried it on in the first place!”)

8. Inside the company, BAE’s position was less clear. The two military aircraft business units, Warton (formerly
part of British Aircraft Corporation) appeared to favour a European solution since it had developed
associations with European partners on the Panavia Tornado programme. The Kingston site, with its
avionics, final assembly and flight test airfield at Dunsfold, had the capability of designing and building a
complete aircraft. Both part of a former Hawker-Siddeley Aviation business unit, they had a history of
funding their own design and development of new aircraft in anticipation of orders. Both the Harrier and
Hawk successfully entered service in the USA.

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07/07/2025 Richard Hooke 2025