|The government of Spain has selected General Atomics Aeronautical Systems, Inc. (GA‑ASI) to deliver Predator B/MQ-9 Reaper Remotely Piloted Aircraft (RPA) systems to the Spanish Air Force. The aircraft will support the nation’s airborne surveillance and reconnaissance requirements.The Spanish Ministry of Defense has awarded GA-ASI the delivery of one Predator B RPA system for the Spanish Armed Forces|
Airbus Military has launched a new member of the C295 medium transport and surveillance aircraft – the C295W. The company will make its public debut at the Paris Air Show later this month. The new model, equipped with uprated engines and winglets...
Spanish Army Selects Critical Solutions International’s Husky Mounted Detection System As Their Threat Detection Solution — Press Release
Filed under: Business Line, Companies, Countries, Events, logistics, Press Releases, Spain
CARROLLTON, Texas, Jan. 28, 2013 /PRNewswire/ — Critical Solutions International (CSI) announced today that the Spanish Army has procured the Husky Mounted Detection System (HMDS™) with ground penetrating radar as their Vehicle Mounted Mine Detection (VMMD) solution. This is the first acquisition of the HMDS by Spain and represents a critical enhancement in the mine clearance capability of the Spanish deployed force. Known for its survivability, the Husky combines advanced ground penetrating radar and sensors to detect buried mines and Improvised Explosive Devices (IED’s).
CSI has delivered six Husky vehicle systems as well as spare parts and training support for fielding in 2013. The contract was awarded to CSI and its supply chain partners DCD Protected Mobility, a division of DCD (Pty) Ltd., NIITEK, part of the Chemring Group PLC, and Eleycon 21 of Spain. The program is valued at more than $20 million and will support Spanish combat engineers as well as NATO soldiers deployed to Afghanistan.
Two operators. Longer missions. Sophisticated sensors.
Prompted by the need for longer mission duration and enhanced detection capability, the two-operator Husky MK III landmine and IED detection vehicle was originally developed and delivered to the U.S. Army. The two-operator Husky vehicle is built with the same protection, survivability, and mobility characteristics as the renowned single-operator Husky vehicle. The addition of a second on-board operator allows the Husky driver to focus on vehicle control and situational awareness, while the second operator monitors and analyzes the advanced sensor systems and the operational environment. The U.S. Army recognized this life-saving vehicle design with an Innovation of the Year Award for 2010.
“By choosing the Husky Mounted Detection System, the Spanish Government has made a significant investment in saving lives and enhancing the capability of the Spanish Army,” said Mike McCormack, CEO of CSI. “With two operators, increased mission capability, and the most advanced sensors available today, the Husky platform equipped with NIITEK’s ground penetrating radar provides the essential technology for route clearance and helps protect the lives of service members and civilians who live in combat environments. We are honored to have been awarded this contract and are looking forward to working with the Government of Spain and the Spanish Army.”
About Critical Solutions International (CSI) – CSI is a world leader in the development, manufacturing, and service support of blast-protected vehicles with land mine, improvised explosive device, and unexploded ordinance detection capability. An essential supplier of the U.S. countermine and humanitarian demining community, CSI’s products lead the way in the safe detection and identification of hidden threats. For more information, please visit www.c-s-i.com.
About Eleycon 21 – Founded in 2002, Eleycon 21 is a provider of Electronics and Telecommunications solutions leveraging best of breed solutions to the Spanish Ministry of Defence, Guardia Civil (Spanish Gendarmerie), local Police, Servicio de Vigilancia Aduanera (Customs), and the Centro Nacional de Inteligencia (National Intelligence Center).
Filed under: Boeing, Business Line, Companies, Contract Additions, Contract Awards, Countries, development program, Events, Federal Budget Process, Japan, Lockheed Martin, logistics, Military Aviation, missile defense, production program, Proposal, Raytheon, Restructuring, Spain
It is possible if a Service does not change a basic system or design for several decades for one company to dominate that program receiving the majority of the revenue and earnings from it. The U.S. Navy introduced anti-air warfare cruisers in the late 1970’s equipped with the new AEGIS weapon system as a major upgrade to its ship based air defense network. The AEGIS weapon system comprises the radars, software, command and control system as well as the missile and its launcher. The original version of the AEGIS was developed and produced by General Electric (GE).
In the early 1990’s Martin Marietta purchased that part of GE when the system had been in production and use for almost twenty years. By that time the Navy had completed production of the CG-47 class cruisers and was installing the system onto the DDG-51 destroyers. Martin Marietta was soon merged with Lockheed to form Lockheed Martin (LMT) who have been the prime contractor ever since. The U.S. Navy has purchased over 40 CG-47 and 50 DDG-51 although not all remain in use. The DDG-51 remains in production.
The AEGIS systems has also been sold to Japan and Spain.
The AEGIS weapon system has undergone incremental upgrades over the years most importantly to integrate Ballistic Missile Defense (BMD) capability and using the STANDARD Missile-3 designed to conduct exp-atmospheric intercepts of missiles. All of this has added up to years of funding worth tens of billions of dollars for Lockheed.
Now the Navy is considering opening up the core contract to competition so that Lockheed may lose its hold on the business. This of course is attracting a great deal of interest from other large defense contractors as the initial contract will be worth a decent amount but down the road the contract could be worth billions.
Boeing (BA) and Raytheon (RTN) reportedly are considering submitting bids for the contract. Both have expertise in radar and missiles from a variety of other programs although Raytheon makes the STANDARD Missile used by U.S. Navy and other countries for the air and ballistic missile defense program which is part of the AEGIS system. Boeing has experience designing, integrating and operating the Ground Based Missile Defense (GMD) system based in Alaska.
The Navy of course is hoping for a better price for its support believing that competition will aid them in getting this. In the time of projected massive defense cuts competition will help the military save money in the future.
This will be major win for the company that either keeps the contract or acquires the work from Lockheed. Competition if the other companies believe they can do the work and win it should be quite fierce.
Photo from Surface Forces Flickr photostream.
Filed under: Business Line, Companies, Countries, Events, Military Aviation, Press Releases, production program, Spain
Eurofighter delivers to the Spanish Air Force Typhoon nr. 300
The 300th Eurofighter Typhoon produced by the four partner companies of the European consortium, was delivered today by Cassidian to the Spanish Air Force, Ejercito del Aire. This milestone makes the Eurofighter Typhoon the only new generation multi-role aircraft to reach the impressive figure of 300 examples in service.
The Eurofighter Typhoons – developed and manufactured by Cassidian in Germany and Spain, BAE Systems in the UK and Alenia Aeronautica in Italy – are now in service across the globe with 16 units in six air forces replacing 11 aircraft types. This confirms Eurofighter as not only the best performing multi-role aircraft available on the world market but also the most effective and best value solution to meet the air defence requirements of air forces and nations worldwide.
To date, the fleet has completed over 130,000 flying hours with well above average operational availability and unmatched operational performance which was demonstrated recently during operations over Libya.
Eurofighter Typhoon is the aircraft of choice for the United Kingdom, Germany, Italy, Spain, the Kingdom of Saudi Arabia and Austrian Air Forces.
The event coincides with the Seoul Air Show 2011 where Eurofighter is exhibiting its capabilities to support the campaign for the FX-III acquisition project where the South Korean Defence Ministry is seeking to purchase some 60 next-generation fighters with the target of having them delivered for operational service in 2016.
Enzo Casolini, Eurofighter GmbH CEO, said: “Today’s milestone is another important example of how successful this joint European consortium is. The programme, the largest industrial collaboration in Europe, is a shining example of what can be achieved through cooperation, bringing together European capabilities; securing thousands of long-term jobs and generating a positive economic impact for the customer nations”.
Filed under: Australia, Business Line, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, Massachusetts, MDA, Military Aviation, missile defense, Northrop Grumman Corp., production program, Raytheon, S&T, Services, Spain, States, U.S. Army, U.S. Navy
Raytheon (RTN), the Massachusetts based large defense contractor, is a key contributor to the U.S. missile defense systems. It manufactures the radar and other parts of the Army’s PATRIOT air and missile defense system. It provides the Navy’s STANDARD Missile (SM)-3 interceptor for their AEGIS Weapon System based ship board system and it is heavily involved in Research & Development for the next generation of weapons being planned. Recently it continued this contribution in different ways.
First, it was awarded a contract by the Missile Defense Agency (MDA) to produce more SM-3 missiles for the Navy and select U.S. allies who operate the AEGIS system. The contract modification was for about $285 million and will buy a further 23 SM-3 and associated engineering services and support. These are the Block IA variant of the missile. Raytheon also recently began construction of a new manufacturing facility at Redstone Arsenal, Huntsville, AL to build the SM-3 and the improved version of the STANDARD Missile called the SM-6.
Raytheon also announced that last month it continued testing its new radar for a competition that MDA and the Navy is having to develop a new radar that could ultimately replace the AEGIS’s SPY-1 made by Lockheed Martin (LMT). The Air and Missile Defense Radar (AMDR) will go on the DDG-1000 and DDG-51 destroyers. MDA had awarded contracts to Raytheon, Lockheed and Northrop Grumman (NOC) to do basic development of the radar. Raytheon said that new Gallium Nitrade transmit/receive modules had completed over 1,000 hours of testing in support of the program.
The AMDR will combine S and X band radars for search and fire control. The current AEGIS radar is S band with separate radars that provide illumination and terminal guidance for missile interception. Systems like the Army’s THAAD land based missile defense system utilize a X band radar for its missions. The higher wavelength provides better target discrimination and precision for the high velocity intercepts required by missile defense.
Despite the coming cuts in U.S. defense spending the combination of a new radar and interceptor for U.S. Navy air and missile defense will be developed and produced. The only question is how fast and in what numbers. The MDA is looking at making a land based version of the AEGIS / SM-3 combination and Raytheon has propose that over the years as well. There are also several countries that operate the system for air defense and they could be upgraded to carry out the missile defense mission. Japan already does but countries like Spain and Australia also could. This foreign market could help Raytheon offset U.S. market changes.
The AMDR winner is also looking at steady business for several decades. The AEGIS has been used now for almost forty years from one source. The company that gets the contract for the AMDR at the end of the development phase should expect a similar situation providing a steady stream of revenues and earnings.
Filed under: Business Line, Companies, Countries, Events, General Dynamics, logistics, Press Releases, production program, Spain
General Dynamics Awarded Four-year Ammunition Contract by Spanish Army
VIENNA, Nov. 3, 2010 /PRNewswire-FirstCall/ — The Ministry of Defense of Spain has awarded General Dynamics European Land Systems, through its Spanish subsidiary Santa Barbara Sistemas S.A., a four-year contract for the supply of 5,56×45 mm NATO ammunition for the Spanish Army, Air Force and Navy. The contract has a maximum potential value of approximately 20 million euros ($27.9 million) if all options are exercised.
The 5,56x45mm ammunition, officially referred to as “5.56 NATO,” is the standard ammunition for the armed forces of all NATO members and many other countries around the world. The ammunition will be manufactured in Palencia, in the center of Spain.
With this contract, General Dynamics European Land Systems Santa Barbara Sistemas reaffirms its leadership in Spain as manufacturer of small- and medium-caliber ammunition.
General Dynamics European Land Systems, headquartered in Vienna, Austria, is a business unit of General Dynamics and conducts its business through four European operating sites located in Spain, Germany, Austria, and Switzerland. With more than 3,150 highly skilled technical employees, General Dynamics European Land Systems companies design, manufacture and deliver to global customers land systems, including wheeled (PIRANHA, PANDUR, DURO, EAGLE), tracked (ASCOD), and amphibious vehicles and bridging systems (M3, IRB, REBS), and other military goods. More information is available online at www.gdels.com.
General Dynamics, headquartered in Falls Church, Va., employs approximately 90,000 people worldwide. The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. More information about General Dynamics is available online at www.generaldynamics.com.
SOURCE General Dynamics European Land Systems
Filed under: Australia, Business Line, Companies, Contract Awards, Countries, Events, Lockheed Martin, missile defense, Navantia, production program, Services, Spain
The Australian government has awarded Lockheed Martin (LMT) a contract to provide engineering services for their AEGIS weapons systems for their new anti-air warfare destroyers. The AEGIS weapon system has been in use with the U.S. Navy and Japan since the late 1970’s. It is an integrated suite of search and fire control radars, other sensors, data links and software used to detect, track and identify targets and engage them with missiles, guns and other ship based weapons. The contract is worth almost $200 million.
The AEGIS system was originally developed by part of RCA which was acquired by General Electric (GE). Ultimately this business unit was sold to Martin Marietta who merged with Lockheed in the 1990’s. The system has been installed on CG 47 and DDG 51 class surface warships. The system has been further modified to conduct anti-ballistic missile missions using variants of the STANDARD Missile originally designed for anti-air missions.
The new SEA 4000 Hobart Class Air Warfare Destroyers will be made by Spain’s Navantia in a contract valued at around $8 billion (AUS). They will represent a significant upgrade to the Australian Navy’s existing air defense assets. They will be manufactured in Australia and are part of a general investment in upgrading the Australian military that includes the F-35 Joint Strike Fighter (JSF) and new armored vehicles. The design is based on the F100 platform already in use by Spain with the American SPY-1D (V) radar and AEGIS Weapon System.
As the U.S. defense budget declines American contractors are going to look for contracts like this overseas. U.S. Allies will remain a potent source of work although this system like many other new investments shows the diversity of the world’s defense industry. In the past it would have been difficult to put a system like AEGIS on a non-U.S. ship but it has already been installed on Spain’s F100 class ships making integration and the sale to Australia easier.
Certainly Lockheed Martin will hope that other countries invest in the system.
April 13, 2010
MADRID,-- The Boeing Company [NYSE: BA] today announced that it has successfully completed its industrial cooperation program for the third phase of the CH-47D Chinook rotorcraft upgrades performed for the Spanish Army's Airmobile Force, FAMET. Boeing finished the industrial cooperation program on schedule while exceeding the $80 million requirement, demonstrating the company's continued success in meeting its commitments.
Over the 10-year program, Boeing completed 75 projects with 20 Spanish companies and institutions. All projects were coordinated through Isdefe, the company that negotiates and manages industrial cooperation agreements on behalf of the Spanish Ministry of Defense's Armament and Material General Directorate.
"In cooperation with Isdefe, Boeing is bringing high-value opportunities to Spanish industry," said Gwen Kopsie, director of International Industrial Participation for Boeing Defense, Space & Security. "Spanish companies of all sizes were an integral part of the global supply base that brought state-of-the-art upgrades to the Spanish Army's Chinook fleet. Many more Spanish companies also benefited from Boeing's advanced technology transfer and training programs."
Boeing also supports Isdefe's efforts to develop Spanish industry through a $13 million industrial cooperation program for the Harpoon advanced weapon control system. That program is on track for completion in 2012.
"Boeing has been a partner to Spain for more than 75 years, serving the needs of both its commercial airplane customers and Spain's military," said Pedro Argüelles, president of Boeing Spain. "Today, Boeing's presence in Spain remains strong thanks to our collaboration with airlines, government, academic institutions and industry. Through our Research & Technology Center in Madrid, we work with our partners in Spain to develop solutions for the environmental, safety and reliability, and air-traffic-control needs of today and tomorrow."
Boeing has successfully implemented industrial participation programs totaling more than US$41 billion in nearly 40 countries over the past 30 years.
The Chinook is a true multi-role, vertical-lift platform. The primary Chinook mission is transport of artillery, troops, ammunition, fuel and supplies within military theaters of operation. CH-47s also have performed humanitarian-support, disaster-relief, rescue, firefighting and nation-building missions on six continents in all climates and conditions. The Chinook is currently in service with more than 18 countries worldwide.
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Filed under: Business Line, Companies, Contract Additions, Contract Awards, Countries, England, Events, Germany, Italy, Military Aviation, production program, Spain
9 billion euro contract for 112 Eurofighter Typhoons signed
NETMA (NATO Eurofighter and Tornado Management Agency), Eurofighter Jagdflugzeug GmbH and EUROJET Turbo GmbH signed today the production contract for a further 112 aircraft, including 241 engines, for the four partner Nations: Germany, Italy, Spain and the United Kingdom.
The Tranche 3.9 billion contract confirms Eurofighter Typhoon as the best selling defence aircraft on the market with 559 units under production contract, including 15 for Austria and 72 for Saudi Arabia.
Eurofighter Jagdflugzeug GmbH CEO Enzo Casolini commented: “This is a major achievement in the Eurofighter programme and serves to reaffirm the importance and the independence of the defence sector of the European industry. The agreement, achieved in conjunction with NETMA and the four Nations involved in the programme, will provide the Air Forces with the best asset available to address their requirements for both air-to-air and air-to-ground roles”.
EUROJET Managing Director Hartmut J. Tenter commented: “This is an outstanding success for the EUROJET programme and a clear signal to the international community endorsing the quality of the product. The EJ200 stands for leading-edge technology, including advanced integrated Health Monitoring to deliver class-leading reliability, maintainability and Through Life Cost—the benchmark of excellence”.
NETMA’s General Manager, Lt.Gen. Antonino Altorio remarked that “the capabilities of Tranche 3 aircraft consolidate the already excellent performances of Tranche 1 and 2 aircraft and will enable the Air Forces to carry out primary air defence in NATO missions as well as maintaining air superiority in theatres of operations and, if necessary, providing support in the air-to-ground role. This contract sets the baseline for consequent contracts for logistic support which is fundamental to keeping fleets available while reducing, significantly, the cost of in-service support”.
Today the Eurofighter programme not only represents the largest European industrial programme, supporting 100,000 jobs in 400 companies across Europe, but it is also the most advanced example of technology within the European industry base. It sets the standard in terms of best value for a new generation defence aircraft programme.
With the production of Eurofighter Typhoon, now being confirmed until well into the next decade, the future of the programme is assured and will maintain and develop the current technological capability in Europe, enhancing future export opportunities and giving the four partner Nations a significant return on their investments. Having already secured two export contracts with Austria in 2003 and the Kingdom of Saudi Arabia in 2007, Eurofighter Typhoon will continue to follow up all export opportunities.
Eurofighter and Eurojet Turbo consortia and their partner Companies are actively pursuing campaigns in Switzerland, India, Japan, Romania, Greece, Turkey and exploring possible opportunities in South Korea, Bulgaria, Croatia and other Nations.
Eurofighter Typhoon is the world’s most advanced new generation real multi-role/swing-role combat aircraft available on the market and has been ordered by six nations (Germany, Italy, Spain, United Kingdom, Austria and the Kingdom of Saudi Arabia). With 559 aircraft under
production contract, it is Europe’s largest military collaborative programme and delivers leadingedge technology, strengthening Europe’s aerospace industry in the global competitive market.
More than 100,000 jobs in 400 companies are secured by the programme. Eurofighter Jagdflugzeug GmbH manages the programme on behalf of the Eurofighter Partner Companies: Alenia Finmeccanica, BAE Systems, EADS CASA and EADS Deutschland, Europe’s foremost aerospace companies with a total turnover of approx. 88 billion Euros (2008).
The EUROJET consortium is responsible for the management of development, support and export of the new generation EJ200 engine system, installed in the Eurofighter Typhoon aircraft. EUROJET’s shareholders comprise Avio (Italy), ITP (Spain), MTU Aero Engines (Germany) and Rolls-Royce (UK). The EJ200 engine, with its unprecedented performance record combined with multi-role capability and highest availability at low life-cycle costs, is perfectly set to meet the air forces’ demands of today and the future.
NETMA was formed on 1 January 1996 by the merger of two previously separate NATO agencies which had been established to manage Tornado and Eurofighter (EF2000) programmes.
The Agency is responsible to the partner Nations (Germany, Italy, Spain and the United Kingdom) for all the aspects of the programme covering development, procurement and inservice support of Eurofighter and Tornado aircraft weapon systems. NETMA provides partner Nations with an efficient, effective and coherent management service for these two major international programmes.
Photo courtesy of Eurofighter.com.
Filed under: Business Line, Companies, Contract Awards, Countries, development program, EADS, England, Events, France, logistics, Military Aviation, production program, Restructuring, Spain
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.
Filed under: Boeing, Business Line, commercial aviation, Companies, Congress, Contract Awards, Countries, development program, EADS, England, Events, logistics, Military Aviation, Restructuring, Spain, Turkey
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.
The Airbus Military A330 MRTT Has Successfully Performed First Contacts Using A New Generation Of Under-wing Hose And Drogue Refuelling Pods — Press Relase
Filed under: Australia, Business Line, Cobham Defense Electronic Systems, Companies, Countries, development program, EADS, Events, Germany, logistics, Military Aviation, Press Releases, Spain
The Airbus Military A330 MRTT Has Successfully Performed First Contacts Using A New Generation Of Under-wing Hose And Drogue Refuelling Pods
The Airbus Military A330 MRTT (Multi Role Tanker Transport) has completed another major milestone performing successfully a series of dry contacts using the new generation Cobham 905E hose and drogue refuelling pods, located under the wings. The receiver aircraft was a Spanish Air Force F/A-18A+ fighter.
The system performed well in hose extension and retraction, and showed good hose response in the contact as well as stability during pre-contact and when connected.
This new refuelling pod is a development of the 907E pod already in service with the Canadian and German air forces on their A310 MRTTs. The pods can each deliver up to 420 US gal/min (1600 litres/min) through a 90 ft (27.4 m) hose, and are controlled from a state-of-the-art Fuel Operator Console located in the cockpit.
“The next steps in the flight test program involve more contacts with the new hose and drogue refuelling pod and the advanced Aerial Refuelling Boom System (ARBS), refuelling a variety of receivers that will include French, Portuguese and Spanish small and large receiver aircraft. This flight test phase will lead us to the completion of military certification, and final qualification with our customer” said Miguel Morell, Vice President Airbus Military Derivative Programmes.
The A330 MRTT has been selected by the air forces of Australia, the United Kingdom, Saudi Arabia and the United Arab Emirates, and was chosen last year by the U.S. Air Force for its recapitalization of the service’s aging tanker fleet.
José María Palomino Communications Airbus Military Tel.: +34 91 585 77 89
Barbara Kracht Communications Airbus Military Tel.: +34 91 585 77 89
Eduardo Galicia Communications Airbus Military Tel.: +34 91 585 77 89
Filed under: Business Line, Companies, Contract Additions, Countries, EADS, England, Events, Germany, Military Aviation, production program, Restructuring, Saudi Arabia, Spain
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.
Filed under: BAE Systems, Business Line, Companies, Contract Additions, Contract Awards, Countries, development program, EADS, England, Events, Germany, Italy, Military Aviation, production program, Restructuring, Spain
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.
Filed under: Business Line, Companies, Contract Awards, Countries, development program, EADS, England, Events, France, Germany, logistics, Military Aviation, production program, Restructuring, Spain, Turkey
The Guardian is reporting that these two countries have affirmed their support for their orders from EADS for the new transports. Unlike France, the UK and Germany who have openly discussed canceling or modifying their orders Spain and Turkey have said that they still want the new aircraft. The A400M will be assembled in Spain. There two orders make up about 25% of the planned fleet of the aircraft. It has been decided that the seven NATO countries who have bought the plane will talk every two weeks or so to review the status of the program. The decision on whether EADS would have to pay back the customers due to the two year delay in the program has been extended to May 1st. EADS feels that they need relief both in time and price and really need to renegotiate the contract to account for this long delay. Either canceling the contract or making EADS pay the penalties would be a great blow to the company.