CHAPTER ONE

The Formation of the British Aircraft Corporation

Consolidation of the Aircraft Industry

On 16 September 1957 the senior management of Britain's aircraft industry was called to a meeting in Whitehall at the Ministry of Supply. During these discussions the policy of the Conservative government was outlined in no uncertain terms: if the industry was to be effective and compete as a force in world markets, the large number of British aircraft manufacturers then in existence would need to consolidate to avoid wasteful competition and better manage resources. To underline this policy, the firms were informed that the contract for a new aircraft to meet Operational Requirement 339 - the replacement for the Canberra light bomber - would only be awarded to a consortium.

At the end of the Second World War Britain had a total of twenty-seven air-frame and eight aero-engine manufacturers. Although some consolidation had taken place, the majority of these enterprises were run by powerful figures - some of them founding fathers of the British aircraft industry - who were unwilling to merge and share power with those they had regarded for so many years as the competition.

Earlier in 1957 the industry had been shocked by the 1957 Defence White Paper, which stated that the age of the missile had come and that manned aircraft would no longer be required. As a result, all existing military aircraft projects, some with great potential, were cancelled except for the English Electric Lightning fighter and the Canberra replacement. Though the industry had enough existing military orders to tide it over until the early 1960s, there was a general consensus that now was time to redirect investment toward the civil sector and expand on the 30 per cent of output that it had traditionally provided.

The rationalization policy was officially announced on 13 May 1958 and, to encourage companies to join forces with one another, the Government announced that it would only fund work from those manufacturers who agreed to merge. As the firms were heavily dependent on the Government for both military and civil projects, they had no alternative other than to comply.

English Electric, which manufactured the Canberra, was a clear favourite to win the contract to build OR339 and their impressive proposal offered a delta-winged twin-seater with a futuristic VTOL capability provided by the extraordinary means of a lifting platform (built by Short Brothers) powered by sixty lift-jets with ten additional engines for propulsion. However, Vickers-Armstrongs' submission to OR339 also interested the defence chiefs, who asked the two firms to work together on a revised proposal, OR343. In January 1959 the Government announced the award of the contract to Vickers-Armstrongs with English Electric (to their chagrin) as a sub-contractor. An uneasy relationship then developed between the two companies, with English Electric holding the view that they should have been given control of the project as they had more recent experience with major military projects - the Canberra and the Mach 2 Lightning fighter - while Vickers had never built a truly supersonic aircraft.

English Electric Canberra WH763. The Canberra was a great success for English Electric and 1,376 were built. Its replacement was to be the TSR2, but this was cancelled and the Canberra far outlived it, serving with the RAF until 2006.

BAE Systems via Warton Heritage

As the OR343 contract would be the mainstay of the two firms in the years ahead it was clear that Vickers and English Electric would need to combine their aviation interests. In order to strengthen their position, they sought another major aviation firm with solid contracts for major work. Discussions ensued with de Havilland a strong candidate with its DH121 (later named Trident), which was then regarded as having great potential. But de Havilland was simultaneously talking to Hawker Siddeley about the merger of its Engine Division with Armstrong Siddeley Engines. At the same time the Bristol Aeroplane Company was also discussing the merger of its aircraft and engine interests with Hawker Siddeley, but Hawker Siddeley had no real interest in Bristol other than its SST (later Concorde) design team.

In October 1959 Sir Matthew Slattery, chairman of Bristol, admitted that the aircraft group was virtually in liquidation. Production of the Bristol Britannia turboprop airliner was almost at an end with just one remaining unsold, and the poor sales performance of the Britannia had brought about losses to the firm of £7-8m. There was progress on SST studies and the Bristol 188 research aircraft, and some hope of producing a competitor to the projected Vickers VC11 and DH121 (Trident), but that would need at least 50 per cent funding from the Government, which was very unlikely. The threat of bankruptcy for Bristol was only averted by the sale of the Bloodhound 1 surface-to-air missile system to Sweden, which brought in a substantial advance payment.

A Bloodhound 1 surface-to-air missile ready to leave for public display outside the Bristol factory.

Bristol Aero Collection

Meanwhile, Vickers/English Electric talks with de Havilland foundered when it was bought by Hawker Siddeley. With this purchase Hawker Siddeley no longer had any interest in Bristol, which sought refuge with the new grouping of Vickers and English Electric.

The British Aircraft Corporation

The British Aircraft Corporation (BAC) came into being in June 1960 when the Boards of Vickers-Armstrongs, English Electric and Bristol agreed to set up a joint company. Vickers and English Electric each had a 40 per cent holding and Bristol 20 per cent in the new concern. BAC was to consist solely of their collective aircraft manufacturing companies, while their non-aviation sections would remain wholly with the parent companies. As a further part of the consolidation of the aircraft industry, Bristol's Engine Division joined with Armstrong Siddeley, de Havilland Engines and Blackburn Engines to form Bristol Siddeley Engines. Bristol's Helicopter Division became part of Westland Helicopters.

The other major British aircraft manufacturer was Hawker Siddeley, which had existed as a loose grouping since 1935 when Hawker took control of Avro, Armstrong Whitworth and Gloster. Although much work sharing had taken place between these firms they had maintained considerable independence. With the need to adhere to the Government's dictum, in 1959 Hawker Siddeley acquired Folland Aircraft followed in 1960 by de Havilland Aircraft Company and Blackburn Aircraft; in 1963 the different company names were dropped, all the aircraft and missiles in the group now being branded as Hawker Siddeley products.

Ceremonial handover of the first VC10 for the RAF at the Wisley Flight Test Centre on 30 September 1966. BAC's first Chairman, Lord Portal, is addressing the audience.

BAE Systems

Sir George Edwards (1908-2003). In 1948 he became Vickers' Chief Designer, leading the team that designed the Viking, Viscount and Valiant. As Chairman and Managing Director of BAC (Operating) Ltd from 1961 to 1968 and later (1968-75) of the whole organization, he was intimately involved in all aspects of its projects during BAC's short history.

BAE Systems

Handley Page declined to join either of the two major groups, and Shorts in Belfast was a special case as it was a nationalized company. Two major aeroengine manufacturers, Bristol Siddeley and Rolls-Royce emerged from the consolidation process and all UK helicopter work was centralized under Westland, which took over the helicopter interests of Bristol, Fairey and Saunders-Roe.

BAC's first press release in May 1960 announced its new name, the shareholdings, the names of the board of directors and the capital of £20m. The combined grouping had 30,000 employees. The same release announced that the first act of the new Corporation was to buy the aircraft interests of the Hunting Group for £1.3m.

Lord Portal, renowned as Chief of the Air Staff during the Second World War, became non-executive Chairman with two Deputy Chairmen from the majority partners: Sir Charles Dunphie from Vickers and Lord Nelson from English Electric. Sir George Edwards was appointed Executive Director (Aircraft) and Lord Caldecote Executive Director (Guided Weapons). Just over a year later Sir George became Managing Director (Aircraft) with Lord Caldecote as his deputy but with sole responsibility for Guided Weapons. Edwards later became BAC's chairman, resigning in 1975.

BAC formally came into existence on 1 June 1960. It was to have a short but impressive seventeen-year life.

BAC's Companies in June 1960

Bristol Aeroplane Company

Bristol came into being in 1910 as the British & Colonial Aeroplane Co. Ltd, leasing premises from Bristol Tramways at Filton, Bristol. By the end of that year Bristol Boxkites were in production at Filton and during the First World War the company built large numbers of aircraft, most notably the Bristol Fighter. During 1918 alone Bristol constructed 2,000 aircraft, but with the Armistice in November, Bristol along with other aviation companies had to adjust to much reduced demand. In 1920 the firm was renamed the Bristol Aeroplane Company.

Rearmament began in the late 1930s and during the Second World War Bristol aircraft included the Blenheim and Beaufort bombers and the highly successful Beaufighter fighter/torpedo bomber. After the war Bristol built...