RYCEY Rolls Royce Holdings PLC (PK)

LONDON—BAE Systems PLC on Monday confirmed the appointment of oil-industry executive Charles Woodburn as chief operating officer, making him heir apparent to the company's long-standing Chief Executive Ian King.

BAE Systems, the U.K.'s biggest arms maker and a major Pentagon supplier, has been exploring succession options for some time.

Mr. Woodburn, 44, is also set to join the BAE Systems board in the second quarter, the London-based defense company said in a statement. Mr. Woodburn lacks defense industry experience and would work with Mr. King for a year or more before the handoff takes place.

Mr. Woodburn joins BAE Systems at a delicate juncture for the defense group. Military spending seems to be on the rise again amid rising geopolitical instability after years in which budgets stagnated or shrank in many western countries.

But BAE Systems is struggling to secure export orders to sustain production of the Eurofighter Typhoon combat jet, one of its main weapons programs, while clouds are hanging over some of its shipbuilding activities. The slump in oil prices also could sap demand from countries in the Middle East like Saudi Arabia which are among BAE Systems's biggest customers.

Chairman Roger Carr, who has ties to the energy sector having previously served as chairman of U.K. utility Centrica PLC, said Mr. Woodburn would "bring fresh perspective to the company's operations and board, whilst building a detailed knowledge of the defense industry under the guidance of Ian King."

Mr. Woodburn, who holds a Ph.D. in engineering from Cambridge University, has been chief executive for EXPRO Group International PLC since 2010 and previously worked at oil-services group Schlumberger Ltd.

BAE Systems is paying its news operating chief a base salary of £ 750,000 ($1.1 million). He will also receive a one-time amount of £ 1.62 million as well as BAE shares for incentives earned at EXPRO.

The appointment comes ahead of BAE Systems's full-year results on Thursday. The company warned last November it would fall short of its initial earnings forecast after failing to secure the export orders it had expected.

If Mr. Woodburn becomes BAE's chief executive it would be the second time in recent history that a major British aerospace and defense company has gone outside its own ranks to tap a new boss.

Warren East was named to lead aircraft-engine maker Rolls-Royce Holdings PLC. Mr. East once ran semiconductor-design company ARM Holdings PLC.

Mr. King, a longtime BAE employee, has run the company that makes British warships and combat planes since 2008. He has overseen a period in which BAE Systems had to contend with drastic cuts in military spending, leading to job jobs in the U.S., U.K. and Australia.

Mr. King also made an unsuccessful attempt to forge a merger with Airbus Group SE, then called European Aeronautic Defence & Space Co., or Airbus Group. The deal to create a giant pan-European aerospace and defense group failed amid opposition from the German government.

The appointment of Mr. Woodburn, a British citizen, as CEO-in-waiting comes after the BAE Systems explored the potential appointment of an American to the job. The Pentagon is BAE's single-largest customer. The British government, which holds a so called golden share in BAE that gives it some veto rights, had opposed such a move.

--Ian Walker contributed to this article.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

February 15, 2016 04:05 ET (09:05 GMT)

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