The sale of the aerospace division of UK engineering group Smiths to the US industrial behemoth GE has reignited fears among some commentators that Britain is slowly but surely seeing its technological crown jewels fall into foreign hands.
In business terms the £2.4bn deal made good sense for Smiths Group, its shareholders and the aerospace business, which will enjoy all the advantages of scale that come from being part of one of the world’s largest companies. And as part of the agreement, Smiths Group secured the lead role in a new joint venture with GE focusing on detection and homeland security systems, one of the world’s fastest-growing technology sectors.
This has not stopped the murmurings of unease, however. The reason for the disquiet is Smiths Aerospace’s position right in the middle of the high-tech end of the aerospace and defence sectors.
It is a fair assumption that if the deal had involved, for example, a food business, there would have been less soul searching in the newspapers.
Aerospace and defence, however, are two of the areas in which the UK can still justly claim a position among the world’s elite. To some, seeing £2.4bn worth of the sector pass into US control makes that position seem less secure than it did a week ago. Speculation duly followed over which of ‘our’ medium-sized aero and defence businesses would be snapped up next.
Fortunately, the UK still has two very big and successful beasts indeed in the aerospace and defence sectors in the forms of BAE Systems and Rolls-Royce.
And in reality, the location of the head office brass plate matters less than the fact that the high-value jobs and skills stay in the UK. They are the big prize, and securing them requires the investment of time, effort and money in our national high-technology infrastructure.
Get that right, and the investment will flow in from around the world. To see this effect in action you only have to look at another part of the GE empire, its Healthcare division, which is based in the UK.
Who owns the deeds is less important than where they spend their money. The challenge is to make sure they do it here.
Andrew Lee
Editor
The Engineer & The Engineer Online
Wrong, seriously unwise move, but probably unstoppable. UK must stop selling off it’s primary intellectual engineering assets like Smiths, especially in all defence and high-tech industries. Our long term aim must be to keep ahead, or at least abreast of our competitors, whilst enjoying international participation. I mean the Far East. The great US hardly rank above them as having the UK’s interests at heart – or am I wrong?
This is a wrong, seriously unwise move but probably unstoppable. The UK must stop selling off its primary intellectual engineering assets like Smiths, especially in all defence and high-tech industries. Our long term aim must be to keep ahead or at least abreast of our competitors, whilst enjoying international participation.
“Keep your friends close, but your enemies closer” doesn’t mean you have to give up the keys to the family vault/laboratories/design studios.
Does anyone remember any details of the deal we did with the US over “Lend-Lease” when we gave full, uncensored and unrestricted access to the all the archives in the British Library? Those shameful few survivors will have tried to forget that this exercise effectively gave the US all of our secrets. Not just defence, for they didn’t stop there!
My late father (a clever Post Office engineer) handled Winston Churchill’s personal communications for the duration and was appalled to witness just took place!
I’m sure there are countless similar stories yet to be told. Perhaps it’s about time we heard some of them.
Sincerely, Alan W
The point is surely that whoever owns the deeds can determine where they spend their money in future?
Why must British companies sell out rather than compete effectively? It’s simply that our national strategy is still tacitly based on exploitation of land rather than IP.
http://iotd.patrickandrews.com
Our Government needs to state where it stands on defence. GE is in it to make a profit. We could be paying a lot more for it or say we can’t afford it. Already Halliburton controls Devonport Dockyard and we have not been told the increase in costs of refits. Could a consequence of this be that we scrap half our Navy? How can we stop GE seeing Smiths technical reports and transferring key personnel to the US? Slowly, Qinetiq is transferring its business to the US as there’s more profit there. Allow the sale and lose.
In this instance I see only risks. Security is a national concern dictated by borders and supported by intellect. GE will be under pressure from congressmen to safeguard its own and its aquired intellectual property. Imagine if MI5 was a regional organisation within the CIA. Would we have access to all the secrets?
I’m not British, but I have worked for two former British engineering giants in the UK, Lucas Aerospace and Marconi. It’s a shame that the UK is losing its engineering status and it’s due to management incompetence, greed and government indifference.