BAE SYSTEMS VIRTUAL UNIVERSITY ANNOUNCES NEW UNIVERSITY PARTNERSHIPS PROGRAMME

Through the BAE Systems Virtual University (VU) the company has developed a new University Partnership Programme in consultation with EPSRC (Engineering and Physical Sciences Research Council) who is supportive of the approach.

This involves aligning the synergistic requirements of all the company's businesses and investing in University Partnerships to make best use of and further develop academic teams with the skills that are needed to address BAE Systems' requirements in Research and Technology, Training and Education, and Recruitment.

The first two Strategic Partnerships will be in Systems Engineering at Loughborough University and Aeronautical Engineering at Cranfield University. Initially the primary investment will be in research programmes.

BAE Systems will work with each Partner to develop a network comprising groups of academics from other universities, which together will have the capability to address the full range of cross-disciplinary business requirements of the whole company. It is expected that each Partnership will involve a number of other universities. The intent is to concentrate the company's resources into the universities selected. Further Partnerships will be announced next year.

The VU links Research and Technology with Learning and Development, providing a gateway to academia for project managing a world wide network as a part of BAE Systems 'knowledge factory'. The VU team was created to reflect BAE Systems' determination to improve the capabilities of the organisation through the development of its' people.

About BAE SYSTEMS:

BAE Systems is the truly global systems, defence and aerospace company. BAE Systems employs some 100,000 people and has annual sales of around £12 billion. The company offers a global capability in air, sea, land and space with a world-class prime contracting ability supported by a range of key skills.

BAE Systems designs and manufactures military aircraft, surface ships, submarines, space systems, radar, avionics, communications, electronics, guided weapon systems and a range of other defence products.

This press release is not an offer for sale within the United States of securities of BAE Systems plc. or any of its subsidiaries. Securities of BAE Systems plc. or any of its subsidiaries may not be offered or sold in the United States absent registration under U.S. securities laws or unless exempt from registration under such laws.

For further information please contact:
Richard Coltart, BAE Systems
Tel: +44 (0) 1252 384875 Fax: +44 (0) 1252 383947

Issued by:
BAE Systems, Farnborough, Hampshire GU14 6YU, UK
Tel: +44 (0) 1252 384605 Fax: +44 (0) 1252 383947
www.baesystems.com

Ref: 191/2001