BAE chairman 'knows nothing about industry' says Turner

Fresh signs of tension have emerged at the top of BAE Systems, Britain's leading defence contractor, after the chief executive Mike Turner appeared to undermine his chairman Dick Olver.

Fresh signs of tension have emerged at the top of BAE Systems, Britain's leading defence contractor, after the chief executive Mike Turner appeared to undermine his chairman Dick Olver.

At a dinner on Sunday on the eve of the Paris Airshow, Mr Turner said that Mr Olver "has a low knowledge base and knows nothing about our industry" and went on to confess: "We have had our moments."

Following a flare-up between the two men this year, prompted by concerns that Mr Olver was involving himself too deeply in areas of the company which were Mr Turner's responsibility, the chairman agreed to confine himself to his non-executive, part-time role at the request of the board.

Mr Turner said: "It's quite difficult for a guy who knows nothing about our industry to come in and know everything on day one." The comments followed Mr Turner's confession in a weekend interview that he would like to succeed Mr Olver one day.

BAE officials denied there was a rift between the men and insisted that while their relationship was "robust" it was also healthy.

Mr Olver was not present at the dinner because he was in Washington lobbying President George Bush over the potential threat to thousands of UK jobs and orders worth billions of pounds unless the US agrees to speed up the transfer of technological know-how on the Joint Strike Fighter - the biggest military programme in history.

Mr Olver made his concerns known to the President at a dinner at the White House attended by senior business figures. BAE executives are worried that unless the pace of technology transfer is quickened it could reach the point where work in the UK on the $100bn programme has to stop.

BAE has won nearly one fifth of the workshare on the JSF from the prime contractor Lockheed Martin. Half of that work will be done by BAE's North American division and half will be done at its Warton and Samlesbury factories in Lancashire, creating 3,500 jobs at the peak of production in 2014 when one JSF a day will be rolling off the production line. The total programme involves 2,593 aircraft, of which the UK is taking 150. BAE will make parts of the fuselage and tail planes for the aircraft.

Mark Hodge, BAE's vice president of marketing for the JSF, said: "Our concern is that as the programme matures and the technological need increases, it will not be released at the required rate. We may get to the point where the technology is needed but is not being delivered."

BAE officials played down reports that Mr Turner had used the dinner to indicate BAE's 20 per cent stake in Airbus and its share in the MBDA missiles joint venture with the Franco-German aerospace group EADS might be sold off.

Mr Turner told reporters that although BAE would have to consider disposing of its Airbus stake if it was no longer producing a satisfactory return for shareholders, this was not the case at present. Speculation that BAE will withdraw further from Europe has intensified after its £2.2bn acquisition of the US tank manufacturer United Defense Industries.

Mr Olver evidently quizzed Mr Turner as to why BAE was buying an American company and not a European one when he arrived at BAE last year and undertook a strategic review of the business.

There are signs that the defence industries of mainland Europe are drawing closer together. Finmeccanica, the Italian defence electronics group, has indicated it could be interested in a merger with its French counterpart Thales.

On the first day of the show there was good news for the UK aerospace industry as a string of deals were announced, includingan $800m (£443m) order for Rolls-Royce's Trent engine from Air China.