Dutch deliver three more F-16s for training Ukrainian pilots in Romania

On the same subject

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  July 4, 2023 | International, C4ISR

  Nordic firms ride wave of cyber M&A activity

  The mergers and acquisitions are taking place as Sweden seeks NATO membership, and neighboring Finland this year joined the alliance.

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  October 16, 2020 | International, Aerospace

  A&D Industry And The Chinese Conundrum: Get In Or Out?

  Michael Bruno Western airlines are begging for more government aid, the International Air Transport Association does not expect the industry to see positive cash flow before 2022, and credit agency analysts forecast depressed aerospace and defense business activity for up to another 1.5 years. Meanwhile, data continues to portray China as the lone bright spot in the aviation world. By August, Chinese domestic flights had recovered to about 90% of 2019 levels. “China has been effectively controlling the spread of COVID-19, limiting cases to less than 100 a day. Combined with a large domestic market, the recovery in commercial aviation is expected to outpace the rest of the world,” Jefferies analysts Sheila Kahyaoglu and Greg Konrad noted in late September. “Right now, really, the two areas of traffic that are close to normal are domestic China and the roughly 2,000 all-cargo aircraft out there today,” echoes AeroDynamic Advisory Managing Director Kevin Michaels. Otherwise, “it's a bloodbath, and we're all aware of that,” he told an Aviation Week SpeedNews conference in September. For aerospace and defense (A&D) suppliers, the dichotomy sets up a critical decision: Should suppliers and servicers run toward China—or run away? It is easy to understand why they are debating the question. Long before COVID-19 gutted commercial air traffic and kick-started what is expected to be the greatest makeover of aircraft manufacturing and the maintenance, repair and overhaul industries since the dawn of the jet age, there were already good reasons to debate being in China. Topping the list was the Trump administration's trade war with the world's second-largest economy. Ongoing questions lingered about intellectual property rights and the specter of inadvertently creating future competitors in Avic, Comac and other Chinese companies. Proponents of reshoring industry to the U.S.—or “nearshoring” to Canada or Mexico—are certainly touting potential opportunity. “The logical thing is to fill longer-term and COVID-revealed supply chain gaps,” Reshoring Initiative President Harry Moser told an Aerospace and Defense Forum audience on Oct. 6. Others agree that conditions are ripe for reshoring, not least because automation and advanced technologies that replace humans can offset North American costs. Also, A&D has been deemed a critical part of U.S. infrastructure. And Chinese unit labor costs have risen fivefold in recent decades. This summer, site-selection consultant Duff & Phelps identified A&D as a top candidate for moving to America (see chart). But siting decisions are complex, and supply chain moves are even more so. Not only is commercial aviation looking strongest in China now and in the near future, but it could accelerate a long-expected toppling of the U.S. as the world's leading aviation market, possibly as soon as 2025. Increasingly, Beijing officials talk about relying on domestic supply instead of imports. Indeed, the “Sleeping Giant” could boast a future estimated aviation market value of more than $1 trillion, according to Yi Zhang, general manager of OCO Global China. That catches suppliers' attention. Zhang spoke in June to a well-attended webinar hosted by Washington state economic development officials about aerospace opportunities in China, and that was a month before Boeing revealed it was even thinking about scrapping 787 production in Puget Sound, Washington. Now China's opportunities beckon brighter with no snapback in Western air traffic. Still, in his Sept. 24 report titled “Caveat Venditor,” or “seller beware,” Vertical Research Partners analyst Rob Stallard cautions Western A&D companies against rushing toward China. “We see the Chinese government leveraging its position of relative post-COVID strength in coming years, and no doubt aerospace will see some of the fallout,” Stallard says. “As the biggest show in town, we would expect to see more quid pro quo in China's relationship with what is still very much a Western aerospace industry. Price, supply chain and technology transfer could be on the table, as could politics. “Aviation could conceivably suffer collateral damage as part of a broader trade war,” Stallard writes. “So while investors will probably see good news in a Chinese-led aero recovery, we would be looking for any strings attached.” https://aviationweek.com/aerospace/manufacturing-supply-chain/ad-industry-chinese-conundrum-get-or-out

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  May 5, 2020 | International, Naval

  Fincantieri CEO on winning the US Navy’s frigate competition

  By: Tom Kington ROME — As CEO of Italy's state-controlled Fincantieri since 2002, Giuseppe Bono, has built cruise, merchant and naval vessels, including the FREMM frigate, for the Italian navy. Last week the type was picked by the U.S. sea service for its newest frigate, the FFG(X), in a deal worth $5.58 billion if options for nine vessels are exercised after the first ship. The FFG(X) will be produced at Wisconsin's Marinette Marine shipyard, which Fincantieri bought in 2008 and where it already builds Freedom-class Littoral Combat Ships for the U.S. Navy and Saudi Arabia with Lockheed Martin. In an interview with Defense News, Bono explained why FREMM beat off the competition, why shipyards should always be prime contractors, and why building cruise ships makes you punctual. What are the reasons you won this competition? In the U.S., more than elsewhere, the quality-price ratio was crucial. And our vessel fit the requirement. The U.S. wanted a ship with anti-submarine capability and this ship is unique in its class because it has that capability. The other competitors offered ships derived from other designs. The customer also wanted a ship which was already at sea. In a way we were lucky. On paper, the other offerings might have been great, but we are operational. Our proposal was also more complete because the design is extremely flexible thanks to the possibility of fitting different defense systems. We had also studied an AEGIS version of the FREMM with Lockheed Martin and knew it would not need large, structural work. What was your reaction when you heard you had won? My colleagues were more emotional about than me. I pursue objectives and strategy. You teamed with Lockheed Martin on the LCS program but here you went alone. We never considered a U.S. partner. This bid was different to the past, with a new approach. In this case the shipbuilders were candidates to be prime contractors. And with a track record with 16 LCS orders for the U.S. and four for Saudi Arabia we are an American shipyard, this time with an Italian design. We have worked very well with Lockheed Martin, but as prime contractor on the Littoral Combat Ship it was the point of contact with the customer, meaning the yard was a step back and that sometimes led to a short circuit. When the shipyard is speaking to the customer as prime, it facilitates the relationships and leads to a better product and lower prices because certain decisions can be made faster. You will, however, work with U.S. firm Gibbs and Cox on the FFG(X). Gibbs and Cox frequently works with the U.S. Navy and knows its needs perfectly. We have a long and positive experience working with them on the LCS and we teamed with them to adapt the FREMM for the U.S. Navy. As work gets underway at Marinette will you need to hire new workers and make further infrastructure improvements? A lot of the work we needed to do at Marinette has already been done. When we first took over, in a springtime, we were shocked to find that the forecourts were muddy due to snowmelt. Now we have paved them over and increased efficiencies in terms of the yard's layout. We will need to find extra space because the FFG(X) will overlap with LCS construction, but we have shown we can build two FFG(X) vessels simultaneously as well as LCS vessels at Marinette. That said, depending on future programs, if the opportunity arose to buy a new yard, we will consider it. We would not be against the possibility, but it is not an issue now. There have been some legislative provisions requiring Buy American for certain FFG(X) components. How will this affect you going forward on this ship? On the LCS there are a number of Italian components, albeit a very limited number. The vessel also has Rolls Royce gas turbines, not GE, showing that price and quality always win out. On the LCS, the four diesel sets for power generation were built by our subsidiary Isotta Fraschini Motori. They are also on the Italian FREMMS. Now we will see if they can be used on the U.S. vessels. The Freedom LCS class experienced delays at the outset. How are you going to try and avoid that for FFG(X), understanding that there are always challenges with a first-of-class ship? There is a difference between a ship and other platforms like an aircraft or an helicopter. A ship does not have a prototype, only the first in class. The prototype of a ship becomes operational. This means the first vessel needs more time than the successive ships. On the LCS program the construction time sped up and prices fell as it accelerated. Is this the biggest ever win for an Italian firm in the U.S. defense market? Yes, I think so. It the result of working well and showing you are serious, of delivering on time and on budget. All these aspects are strongly taken into account by the customer and they give you an advantage. This is fundamental and one of our characteristics, derived in part from our work on cruise ships, which are built on a turnkey basis. The discipline there is unique. You need to deliver on a specific day which is established years earlier, otherwise the penalties never stop. Being punctual is in our DNA. Add to that we are always prime contractor, and a cruise ship is no less complex than a naval ship. In the military sector, delivering on time happens rarely. There are many examples of delays in some countries which can be almost infinite. Turning to Europe, there is ongoing consolidation in the German shipbuilding sector. How does that affect your plans to launch a type of European naval Airbus with French yard Naval Group? With Germany we have a consolidated and long-standing partnership related to the submarine sector. Consolidation must happen in Europe if it wants to count for something in the world, for this reason our goal must be a common defence. There are four of five major yards in the U.S. We cannot think of having more than that in Europe. We must consolidate. https://www.defensenews.com/global/europe/2020/05/04/interview-fincantieri-ceo-bono-on-winning-the-us-navys-frigate-competition/