SIR CHARLES MASEFIELD, GROUP MARKETING DIRECTOR, BAE SYSTEMS

On the Record with
SIR CHARLES MASEFIELD, GROUP MARKETING DIRECTOR, BAE SYSTEMS

If Not the Biggest, the Most Global

BAE Systems claims it ranks second to Lockheed Martin among the world's defense industries with turnover of $20 billion a year, ahead of Boeing and EADS.

But it claims top position as the world's most global defense company. "We're the only defense company to have a home market in nine different countries-and that means producing for indigenous consumption," group marketing director Sir Charles Masefield told Show News. "We don't consider ourselves to be a British company-we're global." The nine countries are: the UK, the US (with 18,000 employees or one quarter of BAE Systems' global workforce and revenues of $3.5 billion), Canada, Saudi Arabia, France, Italy, Germany, Sweden, and Australia.

And how does BAE compare with the new European EADS? "A lot of people see Europe as split in two, with us and EADS head-to-head, but the facts are totally different," said Masefield.

"The most interesting and revealing statistic of all is that 68% of EADS turnover is in collaboration or joint venture with BAE Systems, but only 25% of our turnover is with them. So we are actually in collaboration with EADS."

After launching itself in Asia last December with a celebratory name change by Malaysian Prime Minister Mahathir Mohamad, BAE Systems returns to the region's air show circuit with a major presence at Asian Aerospace 2000.

That group marketing director Sir Charles Masefield is putting so much emphasis on the region in such a short space of time is no coincidence. Asia is a major market for the newly-combined British Aerospace and Marconi Electronic Systems; plans call for it to become even more so in the future as the new BAE Systems pursues a strategy of long term partnerships and relationships that will help it transcend the role of supplier to become a part of the very fabric of the region.

The world's second biggest defense company embraces a vast range of technologies in sea, air, ground and space. "We're everywhere in Asia," Masefield said, from Hawk aircraft, C4I command and control systems and the world's two most advanced frigates in Malaysia, to Hawks and the world's most advanced command and control combat system in the Korean Navy's two brand new KDX warships. BAE Systems maintains offices in Singapore, Kuala Lumpur, Jakarta, Brunei, Bangkok, Manila, Seoul, Hong Kong, and Beijing.

Masefield believes this commitment to long term relationships and partnerships is the only way to go; while countries have seen BAE Systems (as BAe and Marconi) remain firmly in the region through boom times and recession, so they are now seeing BAE itself grow stronger, more capable, and more able to provide lifetime support.

"The future is not about selling products at all-that's in the past, that's history," said Masefield. "The future is about developing long term partnerships with the armed forces and industries of the countries, and to provide not products but total solutions to the overall requirements.

"The difference between BAE Systems and its predecessor companies is that we now have a capability right across the food chain. We don't just have the ability to provide platforms or electronic systems, we have a total capability right across the spectrum of all defense requirements."

But understanding and developing solutions to overall requirements takes a great deal more time and trust than say, selling another 10 Hawks-hence the importance of long term partnerships. "If you go in and say 'we can do anything, what would you like us to do' you will not get a response," said Masefield. "But if you go in and say 'we have been working with your people for the last three years, and it seems that our combined view is that these are the problems and this is a total solution that addresses them,' then you get attention."

BAE Systems has a three-legged global strategy that is, Masefield says, "absolutely clear."

It will remain very strong in Europe;
expand its already major presence in the US; and
develop more partnerships in other regions, particularly Asia-Pacific and the Middle East.
"Partnerships are no longer an option but an imperative," said Masefield. "It is no longer a supplier-customer relationship."

The latest development in this strategy is BAE Systems' interest in buying 30% of Korean Aerospace Industries. It is studying the investment with Boeing, but there is no agreement to make a combined bid.

By John Morris

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