BAE Systems, VT Group in Talks About Combining Shipbuilding Ops
According to reports, shipbuilding companies BAE Systems PLC and VT Group PLC are in talks about merging their naval shipbuilding businesses into a new UK shipbuilding giant. The statement said the discussions were entirely in line with UK government ambitions, and that sustaining shareholder value remained a key consideration. Ministers and firms are examining ways to bring the UK\'s shipbuilding operations together to eliminate peaks and troughs in order cycles and improve efficiency and job security. A VT spokesman said the joint venture was likely to involve the creation of a new company that VT and BAE would jointly own. There would likely be rationalisation of back office functions to eliminate duplication, but existing shipyards would remain open and it was too early to say whether there would be job losses, the spokesman said.The combination of the two companies naval shipbuilding operations would bring together the yard at Portsmouth in England with those at Govan and Scotstoun in Scotland, and their workforces. VT employs about 1,000 people in its shipbuilding operations. UK defense minister Lord Drayson has reportedly set the end of this year as the deadline for the UK's naval shipbuilders to come up with proposals for consolidation of the industry. BAE Systems said its submarines business was not included in the discussions. Source: AFX