Gripen team supports major investment in Skoda Plzen engineering division

GRIPEN TEAM SUPPORTS MAJOR INVESTMENT IN SKODA PLZEN ENGINEERING
DIVISION

The SAAB-BAE SYSTEMS Gripen team, which is working to develop industrial
partnerships in the Czech Republic to support the Gripen new-generation
multi-role fighter, has provided important support for the acquisition
of the Skoda Electrical Machinery Division of Skoda Energo by FKI
Rotating Machines Division, part of FKI plc, the UK engineering group.

Steve Jackman, vice president economic strategy at BAE SYSTEMS said:
"Our partnership with FKI to support this investment in the Czech
Republic will generate millions of dollars in export revenues and secure
hundreds of engineering jobs in Plzen. This is another first class
example of our ongoing pre-contract offset programme for the Czech
Republic. It was as a direct result of our "Partnerships for Prosperity"
tour of nine Czech cities, including Plzen, last summer that we were
able to assist FKI."

The NATO-interoperable Gripen is the world's first fourth-generation
swing-role fighter in operational service and is being promoted, by Saab
Aerospace in partnership with BAE SYSTEMS, to meet 21st century defence
needs of the Czech Republic.

The Gripen team has partnered FKI through consultancy services and
relationship building in the Czech Republic. "The Gripen team's steering
and guidance has helped our acquisition of Skoda Electrical Machinery
Division," said Reg Gott, Managing Director of FKI Rotating Machines
Division, "and we are very happy to support the Gripen team through
offset."

FKI plc is a significant and long-established supplier to BAE SYSTEMS,
providing propulsion and power generation equipment to its submarine and
naval divisions. FKI has traditionally supplied propulsion equipment to
NATO-country navies, including the United Kingdom Royal Navy, the US
Navy and the Royal Netherlands Navy. FKI's acquisition of Skoda
Electrical Machinery Division could lead to an "exchange of defence
cooperation," said Mr Gott.

Steve Jackman, BAE SYSTEMS vice president economic strategy, said: "FKI
now has a significant footprint in the Czech Republic. As one of our
established suppliers, this could lead to collaborative defence projects
between the UK and the Czech Republic in a number of programmes,
including naval projects."

FKI's acquisition of Skoda Electrical Machinery Division, which makes
large generators for gas, steam, hydro-electric and nuclear-based power
turbines, has secured the future of the 850 employees of the Plzen-based
company.

"Skoda Electrical Machinery Division has super facilities, good people
with excellent skills and a very good design capability," said Mr Gott.
"In a 'try-before-buy' exercise, the company produced excellent quality
45 megawatt and 50 megawatt generators for us in orders worth some $30
million. By the end of this year, Skoda Electrical Machinery Division
will be putting out product with 80 per cent own content, and we have a
solid order book going forward with multiple year supply agreements."

"Our partnership with FKI is yet another example of the broad programme
of economic compensation which supports the Gripen fourth-generation
swing-role fighter," Steve Jackman concludes.

"The fact that one of BAE SYSTEMS' key suppliers has made such an
investment underlines the depth and breadth of the global industrial and
commercial relationships that Gripen team can introduce to the Czech
Republic."

Notes to editors:
Saab-BAE SYSTEMS Gripen, a joint venture company in which Saab of Sweden
and the United Kingdom's BAE SYSTEMS have equal shares is responsible
for the manufacture, marketing and support of the Gripen fourth-
generation multi-role/swing-role fighter internationally. It combines
the product strength of Gripen with BAE SYSTEMS's extensive experience
of supplying NATO and other markets.

The joint venture brings together Europe's most powerful industrial team
which, together with key partners in the United States, has created a
truly European/transatlantic fighter that will remain at the forefront
of combat aircraft technology for decades to come.

The team is committed to establishing long-term industrial partnerships
with all Gripen customers. These relationships, which have the ability
to generate jobs and long/term growth through inward investment, export
promotion and technology transfer among others, cover a wide spectrum of
industry and are not limited to the defence and aerospace business
sectors.

FKI plc is major UK engineering group that employs more than 15,000
people around the world and has annual revenues in excess of $2.3
billion. FKI Rotating Machines Division owns and operates seven major
manufacturing facilities in England, Italy, the Netherlands and the
Czech Republic, producing a total range of Rotating Machines, from one
kilowatt motors to over 200 megawatt turbo generators. FKI plc is quoted
on the London Stock Exchange.

For further information please contact:

John Neilson, Vice President Communications, SAAB-BAE SYSTEMS Gripen
Tel.: + 44 1252 384795
Mobile: + 44 802 337704
Email: John.n...@baesystems.com

www.gripen.se

FKI Rotating Machines. www.fki-eng.com


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