Business

BAE Systems completes acquisition of Collins Aerospace's military GPS business

United Kingdom-based company keeps about 700 employees in Eastern Iowa

380 Commerce Site front entrance. (Rendering courtesy city of Cedar Rapids)
380 Commerce Site front entrance. (Rendering courtesy city of Cedar Rapids)

BAE Systems’ $1.9 billion acquisition of Collins Aerospace’s military Global Positioning System business is complete, the company announced Friday morning.

“The Military GPS business brings high quality products which complement our Electronic Systems portfolio, strengthening our position as a leading provider of defence electronics,” Charles Woodburn, chief executive of BAE Systems, said in a statement.

The United Kingdom-based aerospace and defense company agreed to purchase the military GPS business in January and will keep about 700 employees in Eastern Iowa.

Those jobs include more than 450 engineers and 200 operations employees.

“We wanted to keep that business intact,” said John Watkins, vice president and general manager of BAE Systems precision strike and sensing solutions division. “We didn’t want to break anything in the integration process.”

Those jobs are moving from Collins Aerospace, Watkins said, so no new jobs are created yet. But Watkins envisions BAE Systems adding more positions soon as the transition progresses.

“Once we better understand what they can do better than what we can do, that’ll bring more opportunity to grow even further out there,” Watkins told The Gazette on Friday.

“Those will be decisions we’ll need to factor in the new facility. It would be very difficult to add more people while we’re still inside the Collins footprint.”

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U.S. Department of Justice regulators asked Collins Aerospace last October to divest itself of the GPS unit as part of the merger between Raytheon Co. and Collins Aerospace’ owner United Technologies Corp.

Watkins said the company became “very interested” in the GPS business once it became available.

“They have been at the forefront of this GPS-receiver technology for over 40 years,” Watkins said. “This has been their bread and butter for a very, very long time.”

This part of Collins Aerospace has installed more than 1.5 million GPS devices since its inception.

Collins Aerospace is the largest employer in Cedar Rapids.

BAE Systems plans to build a $139 million classified defense aerospace facility in southwestern Cedar Rapids, where all 700 area employees will work. Construction is slated to begin in late September.

The employees are working at Collins Aerospace’s facilities in Cedar Rapids and Coralville until the BAE Systems facility is ready.

The military GPS business will now go under the name of “navigation and sensor systems” and be part of BAE Systems’ precision strike and sensing solutions division. That division already makes advanced sensors, helmet and head-up display solutions and missile defense products, among other items.

“We’re really confident this is going to be a smooth transition for us,” Watkins said.

BAE Systems has more than 85,000 employees with operations in more than 40 countries, making it one of the largest defense contractors in the world. Its U.S. operations generated about $11.4 billion revenue in 2019, the company said.

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The sale closing comes the same week as Collins Aerospace’s annoumcement it will lay off an undisclosed number of employees because of lagging sales during the pandemic.

Comments: (319) 398-8394; john.steppe@thegazette.com

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