BAE Systems Appoints Charles Woodburn as New CEO -- Update
22 February 2017 - 10:13PM
Dow Jones News
By Robert Wall
LONDON--British weapons maker BAE Systems PLC (BA.LN) appointed
Charles Woodburn as its next chief executive to replace Ian King in
a long anticipated leadership reshuffle at one the Pentagon's top
arms contractors.
Mr. Woodburn, a former oil and gas industry executive, joined
BAE last year in the newly created role of Chief Operating Officer.
It effectively made him the heir apparent to industry veteran Mr.
King, who became CEO in 2008. Mr. Woodburn is set to take the top
job on July 1.
Mr. King's most ambitious move as CEO was the proposed merger in
2012 of BAE with Airbus SE, then still called European Aeronautic
Defence & Space Co. The deal would have brought BAE back into
the booming commercial plane making business after it sold its 20%
stake in Airbus in 2006. The merger faltered on opposition of the
German government that worried about losses in local defense
jobs.
Mr. Woodburn inherits an improving budget environment for
defense companies after Mr. King navigated a period of contracting
or low growth in some of BAE's most important markets. The U.K. is
boosting military spending and the defense budget in the U.S., a
major market for BAE, also is poised to grow more strongly. Other
European states also have signaled they would bolster military and
security spending amid concern of Russian military activity and
unrest in the Middle East.
BAE could be an early winner from efforts in the U.S. to repair
and overhaul warn out equipment from decades of war, analysts
believe. BAE revenues from ship repair could move "materially
higher" if U.S. Navy maintenance spending rises, Bernstein Research
said in a note.
The British manufacturer is also a major partner on the Lockheed
Martin Corp. F-35 Joint Strike Fighter program, the Pentagon's
largest acquisition project that has drawn scrutiny from President
Donald Trump. BAE is expected to benefit from a planned boost in
production of the radar-evading combat plane.
Mr. Woodburn faces some headaches too. A long-sought follow-on
order for Eurofighter Typhoon combat jets from Saudi Arabia has
failed to materialize in recent years. Some lawmakers in Britain
have tried to curtail arms sales to Saudi Arabia over concern about
the country's actions during the war in Yemen. Saudi Arabia is one
of BAE's largest markets. BAE's costs on some big British submarine
programs have risen too, the government's National Audit office
said last month.
Before joining BAE, Mr. Woodburn was chief executive for Expro
Group International PLC since 2010 and previously worked at oil
services group Schlumberger Ltd. BAE said Mr. Woodburn's base
salary as chief executive would be 875,000 pounds ($1.1
million).
BAE is slated to report 2016 full-year results on Thursday, with
net profit expected to advance to GBP997 million from GBP918
million in the previous year, according to analysts surveyed by
Thomson Reuters. The company is expected to report a 3% rise in
sales to GBP18.44 billion.
--Razak Musah Baba contributed to this article.
-Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
February 22, 2017 05:58 ET (10:58 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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