BAE Systems, the world’s third biggest military supplier, disclosed last week that it had decided not to sell the technical services businesses of its U.S. subsidiary, despite multiple expressions of interest from potential buyers. It thus is resisting a trend in the U.S. defense sector that has seen companies like L3 and Lockheed Martin announce plans to greatly scale back their services offerings. The reason why seems to be quite straightforward — the operations in question are executing well, scoring major competitive wins, and contributing significantly to the revenues and returns of the British parent. In fact, they are doing so well that they have hired over 1,500 people so far this year, and are continuing to search for additional talent. When combined with the U.S. unit’s diverse portfolio in other tech areas such as electronic warfare, digital flight controls, armored vehicles and naval ship repair, they provide both resilience and opportunity in a rapidly changing defense marketplace. I have written a commentary for Forbes here.
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