As reported on www.prweek.com (Monday 17.2.03), the company drafted in Bell Pottinger's financial PR and public affairs teams last week after a pitch believed to have been against Brunswick and The Maitland Consultancy.
BAE has just emerged from a bruising encounter with the Ministry of Defence over the procurement contract for UK aircraft carriers. The company, created from the merger three years ago of British Aerospace and the defence interests of the old GEC, competed with French contractor Thales to win the right to build two aircraft carriers for the MoD.
Although it won lead contractor rights two weeks ago, it suffered a snub as the basic design of the ships is to be handled by Thales UK.
The company will continue to use its long-term City PR adviser CardewChancery, whose chairman Anthony Cardew has a relationship with the company stretching back many years.
The Bell Pottinger financial team is led by chairman Piers Pottinger and board director Charlotte Lambkin, while public affairs MD Peter Bingle will handle the lobbying side.
Fees have yet to be worked out in detail but are likely to hit £300,000 in the first year.
Ten days ago the company was pushed into denying media reports of boardroom splits and dissent among non-executive directors.
Bell Pottinger sources said 'the perception of soured relations with the MoD' - over the aircraft carriers and this week's renegotiation of contracts on Nimrod surveillance planes and Astute Class submarines - were a core issue for BAE.
The 950-foot aircraft carriers will be the largest ships the Royal Navy has ever owned and are designed to replace HMS Invincible, HMS Illustrious and HMS Ark Royal.
Pottinger said: 'The company faces a lot of challenges in communications terms.'
The account team reports to BAE director of corporate comms Hugh Colver.