'Intelligent discontent is the mainspring of civilization.' -- Eugene V. Debs

Sunday, January 30, 2005

Train wreck, Thy Name is Halliburton 

So last week we learned from the business press that Halliburton subsidiary Kellogg Brown & Root may have won a contract to manage the construction of two new aircraft carriers for the British navy, because, you know, no one knows more about ship building than a Houston-based oilfield service contractor, and, afterall, KBR's forays into cross-disciplinary pursuits have gone so well in the past; see, for example, here or here.

Unfortunately the UK’s biggest defense contractor isn't playing nice. It claims that putting Halliburton in charge will lead to "a train wreck":

BAE Systems, Britain's largest defence contractor, has warned the Government that it will pull out of an alliance building two aircraft carriers if Halliburton, the controversial US defence contractor, is awarded the role to manage their construction.

Mike Turner, BAE's chief executive, and Dick Olver, the chairman, issued the threat at a meeting on Wednesday with Geoff Hoon, the Secretary of State for Defence, Lord Bach, his deputy, and Sir Peter Spencer, the chief of defence procurement.

Olver – the respected former deputy chief executive of BP – told Hoon that the way the Ministry of Defence was planning to manage the £4bn contract would precipitate "a train wreck".

BAE has also informed Hoon that unless the crisis is averted soon, there will be politically embarrassing job losses at BAE's three shipyards: Govan and Scotstoun on the Clyde, and Barrow-in-Furness.

[Hat tip to Intl News]

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