What To Do When A Government Contracts With Itself?
In England the Government was forced to bail out the Royal Bank of Scotland and became the majority shareholder. Now it is part of one team...Afghanistan Eating Into British Investment In Defense And U.S. May Follow
England's Royal Air Force is supposedly preparing a list of suggested cuts to existing forces and bases to get ahead of the next budget. The idea...BAE Systems Bribery Scandal Spreading?
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BAE Systems is under investigation in England for several different contracts with foriegn companies where it has been accused of giving bribes to...RAF Merlins headed to Afghanistan
BENSON, England, Oct. 1 (UPI) -- With its Merlin helicopters pulled out of Iraq, the British Royal air force said it was preparing to deploy the transport vehicle and its crew to Afghanistan.
RAF updates Puma fleet
BENSON, England, Sept. 30 (UPI) -- A $479 million upgrade to the Puma helicopter fleet in the British Royal Air Force improves its power and extends its life cycle, the Ministry of Defense said.
Britain’s BAE Systems axes 1,000 jobs
LONDON, Sept. 16 (UPI) -- British military equipment company BAE Systems will cut more than 1,000 jobs in Britain and close a facility in England.
British, French to develop new missile
LONDON, Sept. 11 (UPI) -- France and England announced plans to jointly develop an anti-surface missile for use with the British Lynx Wildcat and the French NH90 and Panther helicopters.
SDS partners on hotel security courses
LONDON, Aug. 24 (UPI) -- Frost & Sullivan has partnered with England-based SDS Group Ltd. to offer custom training courses for hotel personnel to better respond to terrorist attacks.
Israel Procures New Trainer Aircraft
Filed under: Business Line, Companies, Contract Awards, Countries, Elbit Systems, Events, Israel, commercial aviation, logistics, training
The Israeli Air Force has procured Beechcraft T-6 trainers. These will replace the old Fouga Magistar aircraft used for the last several decades to start the training of Israeli pilots. The Israeli defense contractor Elbit Systems was awarded a contract to provide for the support of these new aircraft.
These two events mirror a trend in the U.S. and England where the trainers used are turbo-prop rather then jets. The use of Contractor Logistics Support (CLS) for training fleets has also gained ground in these two countries. This is because you have a fixed fleet in a non-combat location. There are many benefits to CLS in the areas of cost and reduction in the support tail. Israel has used Elbit for support of training systems for the last seven years. Elbit hopes like all defense contractors to be able to use this experience to win contracts overseas.
European Customers Continue To Dither On A400M
Filed under: Business Line, Companies, Contract Awards, Countries, EADS, England, Events, France, Military Aviation, Restructuring, Spain, development program, logistics, production program
The various defense ministers and their staffs of the seven European countries buying the EADS developed A400M transport continued to punt on a decision. They now will wait another month before deciding whether to restructure, end or demand their money back on the troubled program. The orignial decision date was March. That was extended three months to the end of June and now it will be in July when the “terms of the negotiation” are to be defined. Then there will be some period of negotiation with EADS on what to do with the aircraft.
Some countries have been outspoken in support of the very late program while others have discussed ending their participation due to the cost and schedule problems. England who is in the worst position budgetary wise is reevaluating all of their defense spending and looking at areas to cut costs. They have been the most vocal about ending their participation and perhaps getting the upfront money back from EADS.
The company has been stockpiling cash in case there will be a need to give some of the money back already received for the aircraft. A decrease in the number to be purchased will also lead to higher prices for the remaining customers unless some other deal can be reached. It is obviously in the best interest of the company and perhaps the countries involved to complete the program but now these talks have been ongoing for six months or so. At some point some decision will have to be made.
A400M Talks Continue
Filed under: Boeing, Business Line, Companies, Congress, Contract Awards, Countries, EADS, England, Events, Military Aviation, Restructuring, Spain, Turkey, commercial aviation, development program, logistics
With the Paris Airshow coming up there is a great deal of pressure on EADS to be able to announce some good news at the premier showcase for their products. The company is looking at some severe issues on the military side with their major program the A400M facing push back from its customers.
This medium transport program is at a critical juncture as the nations looking to buy it have the right to end their deals and demand several million dollars worth of payments back from the company. England has been the most negative on the project as their budget problems overall are forcing an entire re-look at military procurement. Some of the other smaller countries such as Spain and Turkey have been more positive.
Now it is reported that talks between EADS and its customers have been extended once again to try and work something out. The hope is that more defense work will be able to balance off the decline in the civil aviation market driven by the world’s recession. Unfortunately like Boeing is facing EADS may have to deal with some major cuts to plans for U.S. defense spending. The FY 2011 budget may continue the large cuts to defense programs that Obama’s first one did.
England To Proceed With Eurofighter Order
Filed under: Business Line, Companies, Contract Awards, Countries, England, Events, Military Aviation, Restructuring, development program, production program
England has decided that the costs associated with canceling the next order for the advanced Typhoon fighter aircraft are such that they will go ahead with the buy. There were costs that would be paid in penalties and cancellation fees as well as those related to all the jobs being lost in England from the manufacture and assembly of the multi-national aircraft.
The nation’s budgetary problems were leading it to try and get out of the purchase due to the high cost of the aircraft. As it is if the purchase is executed the English government will look to somehow reducing the cost of the aircraft, and possibly selling some to other countries to offset their costs.
England Looking At Harder Line On Typhoon Buy
Filed under: Business Line, Companies, Contract Additions, Countries, EADS, England, Events, Germany, Military Aviation, Restructuring, Saudi Arabia, Spain, production program
Update — It was reported on Monday that the expected penalties and cancellation fees related to the UK’s buy in this round for the advanced aircraft will be over two billion pounds ($3 billion or so). This amount of money may make it more feasible to purchase the aircraft. While penalties are capped at the two billion figure there would still be termination fees. The economic effect of ending the program would also be substantial as there are several thousand jobs in the UK that rely on the program. The decision on this effort will not be easy for the Brown Government already facing a dire financial situation.
As we wrote about previously England’s budget struggles are causing it to rethink the upcoming contract buy of Typhoon fighters. If England does not participate fully in the third option then either the other countries will have to renegotiate the prices most likely to a higher number. England does have the option of ending their participation in the multi-national contract but would have to pay substantial termination fees that might end up higher then the cost of buying the aircraft.
The interesting thing is that it was England worried that some of the other participants may have left the contract that worked to have the high fees put in the contract. England is trying a third option where most of there scheduled buy will go to Saudi Arabia rather then to them allowing some savings. The Brown government like Obama in the U.S. is facing trying to pay for a large economic stimulus package as well as increased social spending. This has put pressure on a military budget already suffering from the combined campaigns in Iraq and Afghanistan. Like Obama is doing one way to save money is to end large procurement programs to save defense spending. They can either be stopped in development or less units can be bought, like the F-22. Unfortunately the less you buy the more they cost so total savings may be limited.
If England does renege on this contract there will be significant future issues with their partners and for the Eurofighter consortium.
UK Budget Woes Affecting Eurofighter
Filed under: BAE Systems, Business Line, Companies, Contract Additions, Contract Awards, Countries, EADS, England, Events, Germany, Italy, Military Aviation, Restructuring, Spain, development program, production program
The Eurofighter program is coming up for the next production buy. England, Germany, Italy and Spain are all planning to buy new aircraft with this batch. The original plan was to buy just over one hundred aircraft for about $180 billion. England was expected to buy sixteen. Now England’s budget problems is leading the Brown government to consider not participating in this purchase.
This decision is being fought by the other nations as a reduction in the quantity will increase the price for all of the them. England wants to negotiate a cheaper price for the aircraft. It doesn’t help that a great deal of high quality manufacturing jobs are based on this program across Europe. Few countries can face more unemployment in the current world economic situation.
The Eurofighter TYphoon is facing much of the same opposition that the F-22 is with some saying it is not the type of aircraft needed for today’s war on terror. The fact that it is the most expensive aircraft in Europe also is not helping. The European aviation industry is struggling right now with the A400M program and a possible cancellation of that. For England to back out of its Eurofighter commitment would only add to the problems.
New British Aircraft Carriers Have Trickle Down Effect
Filed under: Business Line, Companies, Contract Awards, Countries, England, Events, Scotland, Thales, production program
Even though you can project the Royal Navy at being two carriers and twenty or so escorts the most expensive ship building contract in the UK’s history is having an economic effect. The Engineer Online reports that three major sub contracts were awarded worth over $130 million to support construction of the two new ships. The contracts are for insulation, water management systems and command and control systems. Thales will provide the internal ships communication system as well as an HF long range radio. Ormandy Group will build the system for treating and providing hot and cold water for the ship. Finally Ticon Ltd UK will supply various types of insulation for the ship. These two large warships will continue to generate revenue and jobs for a variety of companies across England.
US buys more artillery
Filed under: BAE Systems, Canada, Contract Awards, England, U.S. Army, production program
BAE Systems received a contract for M777 howitzers. See a story here. The M777 is a light weight towed piece that is used by the US, England and Canada. These countries have ordered 700 of the weapon. The contract is worth over $80 M.
Concern UK may back out of Eurofighter contract
Filed under: BAE Systems, England, Military Aviation, Restructuring, development program
The UK government is currently planning on buying Eurofighters and F-35 JSF aircraft to modernize their fixed wing aviation force. There are rumors that the Eurofighter buy may be canceled as a cost savings. See an article here. Eurofighter is built by a multi-nation consortium in Europe with BAE being the most important UK participant. If the contract is canceled, with the Government paying termination fees, that means no major aircraft will be built by BAE. They build parts of the JSF but do not assemble the final aircraft. This would be the end of fighter production in England if it happens until a more advanced aircraft then the F-22 or F-35 comes along.
UK moves forward with carrier construction
Filed under: Contract Awards, England, McTaggert Scott, production program
The Royal Navy let a contract to buy the elevators, or “lifts” in England, as part of the overall construction program for the two new large deck aircraft carriers it intends to build. See a story here. The contract was awarded to the engineering firm McTaggert Scott. The elevators will be used to move aircraft, ordnance and equipment from the hanger deck to the flight deck. While there have been stories of slow down in the work on the two ships this contract indicates that the Navy is starting to move forward.
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