Head of BAE’s US division retires

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Linda Hudson, head of BAE Systems Inc, is to retire in March, leaving a gap in the critically important autonomous US division of Europe’s biggest defence company.

It is the first big management change since the recent appointment of Sir Roger Carr, as BAE Systems’ new chairman, and BAE’s unsuccessful attempt last year to tie-up with pan-European aerospace company EADS.

Despite being American, Ms Hudson, 62, had in the past been considered for BAE’s chief executive’s position. Even as head of the US division, some within and outside BAE saw her as the company’s most powerful executive.

BAE Systems Inc is run as its own company, giving Ms Hudson full autonomy and her own all-American board. The arrangement, which is prompted by strict US national security regulations, made the already politically challenging €36bn tie-up with EADS even more difficult.

The group accounts for about 45 per cent of BAE’s total revenue and is the Pentagon’s biggest foreign-owned defence contractor.

Ms Hudson, who intends to stay on as non-executive director at the US division until the end of April 2015, became the first woman to lead a major US defence contractor when she was promoted to president and chief executive in 2009. This year she was joined by two other women at the top of the defence industry: Marillyn Hewson, chief executive of Lockheed Martin, and Phebe Novakovic, chief executive of General Dynamics.

Ms Hudson, who came to BAE from General Dynamics, ran BAE’s Land and Armaments division before becoming US chief executive.

Since then, she has mainly had to deal with the slowdown in business caused by the end of a decade of war in Iraq and Afghanistan and the fiscal downturn, which has prompted the US government to slash its defence budget.

In her note to staff Ms Hudson acknowledged the challenges of the past year, noting the company had become “more agile and efficient.”

“We are more focused than ever, even in a time when the dysfunction in Washington has created a cloudy and uncertain environment. As a melting pot of legacy companies brought together by different circumstances, we have broken down the barriers to collaboration and united around a common inspiration for the work we do,” she wrote.

That description of the US government lies in stark contrast to the start of her career, which she says was inspired by the US’s emerging space programme.

Ian King, BAE’s chief executive, focused on a similar theme, noting that Ms Hudson had “led the transformation of BAE Systems, Inc. by streamlining the organisation, reducing costs, increasing efficiency and speed to market, and diversifying the company’s portfolio of products and services.”

This article has been amended since its original publication to correct the name of Sir Roger Carr. We apologise for the error.

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