BAE Systems Inc. scored a major coup on Tuesday with the announcement that industry powerhouse Lawrence B. Prior III would depart the number-two position at ManTech International to become BAE’s Executive Vice President for services. Prior will oversee all of BAE’s U.S. intelligence and support services, a sprawling enterprise likely to grow further as the British-based company seeks to diversify away from traditional metal-bending activities. The appointment appears to position Prior as a potential successor to BAE Systems Inc. President & CEO Linda Hudson at a time when Hudson is working to transform what is already one of the world’s biggest defense enterprises.
The United States is one of several countries that parent company BAE Systems plc regards as a home market, but it is by far the biggest market for security-related products and services. Under a recent reorganization plan implemented by Hudson, the U.S. arm — often referred to within BAE simply as “Inc.” — will have three product sectors reporting to EVP Robert Murphy and two service sectors reporting to the second EVP position to which Larry Prior has now been named. The two EVP’s and Hudson will serve on the BAE Systems Executive Council, placing all three at the most senior level of management.
Prior’s appointment is somewhat ironic in that he was deprived of elevation to the top job at SAIC two years ago by the designation of former BAE Systems executive Walt Havenstein as heir apparent to CEO Kenneth Dahlberg. However, SAIC has not been faring so well since Prior departed, and he now is positioned to play a central role in a much bigger enterprise. BAE Systems plc is the second-largest defense company in the world, after Lockheed Martin. Prior has a reputation as a meticulously focused and aggressive competitor, but what BAE Systems leaders no doubt saw as most appealing about him was his extensive knowledge of the intelligence community. That knowledge is derived from decades of experience beginning as a Marine intelligence officer and ending as head of SAIC’s huge Intelligence, Security and Technology Group.
BAE Systems is the only foreign-based company that plays a major role in developing and supporting technology for the U.S. intelligence community. It works extensively on collection systems, information networks, and other highly classified projects. ManTech International, the company where Larry Prior most recently was employed, has collaborated with BAE Systems on cyber-security projects and is itself uniquely positioned in intelligence-related cyber activities. However, Prior’s expertise extends well beyond the cyber arena, to the entire array of intelligence organizations and missions. His selection thus helps BAE Systems adjust to the blow of losing Sheila Cheston, a lawyer highly regarded in the intelligence community, who left to become general counsel at Northrop Grumman.
The entire defense sector is entering a period of reorganization as demand for military goods and services softens, but intelligence spending is expected to hold up reasonably well in any downturn. By selecting Larry Prior at this point in the sector’s evolution to oversee her intelligence unit, CEO Hudson has positioned BAE Systems Inc. to take business from faltering competitors — a goal Prior repeatedly achieved while at SAIC. His long experience with the secretive federal customer, combined with an energetic management style, reinforces the widespread belief that BAE will be one of the survivors in the coming sector shakeout.
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