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Bae Systems: Operating Amidst Defense Spending Cuts
BAE has been actively searching for alternative revenue streams from other governments. However, BAE recently lost bids for an $8 billion Japanese and a $15 billion Indian air defense contract. The company also brought in LEK Consulting in order to conduct a review of its shipbuilding division, as work at its UK shipbuilding yards has started to dry up. http://www.bharatbook.com/market-research-reports/defense-market-research-report/bae-systems-operating-amidst-defense-spending-cuts.html
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Highlights
UK defense cuts are set to reduce spending by 8% across four years whilst the US announced cuts of $487 billion across 10 years. BAE's UK shipyards ...
... are under review due to a lack of large-scale projects, the Royal Navy's Type 26 frigates being the only major project on the horizon. BAE recently entered the critical infrastructure market.
Your key questions answered
* How reliant is BAE Systems on the US and UK for sales and is the company capable of surviving their defense cuts?
* What other revenue streams does BAE have, and will they be sufficient to replace lost revenue caused by defense cuts?
OVERVIEW
Catalyst
Summary
ANALYSIS
BAE Systems, Europe’s leading defense contractor
A major contractor to the US and UK militaries
The US and the UK begin implementing the announced defense cuts
US defense cuts to begin in 2013
UK defense cuts
BAE Systems' naval shipyards are at risk
As military spending cuts continue, BAE’s shipbuilding division is being placed under review
BAE turns to foreign buyers to sustain sales
In order to negate UK and US defense cuts, BAE is turning to foreign governments
CONCLUSIONS
Despite defense cuts BAE continues to secure contracts
APPENDIX
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