September 26, 2018 | International, Aerospace, Naval, Land, C4ISR, Security
By: Martin Banks
BRUSSELS — The European Union security chief Julian King has called for the “closest possible cooperation” on defense and security issues after the U.K. leaves the 28-member bloc.
“On some issues there will be winners and losers, but there is a mutual, shared self-interest when it comes to security and defense,” King said.
Despite the failure of last week's EU summit in Salzburg, Austria, to back British Prime Minister Theresa May's latest Brexit proposals, King remains “optimistic” the U.K. and EU could continue to work together on security and defense.
Some have questioned the effectiveness of European defense and security after the departure of the U.K. Britain is the second-largest net contributor to the EU, and its exit will result in an income shortfall of about €84 billion (U.S. $99 billion) for the EU's next spending period from 2020.
Another problem, according to U.S. President Donald Trump, is the continued “unwillingness of some member states to contribute more” to NATO.
Speaking at a security debate in Brussels, King highlighted cyber and the ongoing threat from terrorism as key areas where the two sides must cooperate post Brexit, which will occur at the end of March 2019.
“Of course, there are still a few things still to resolve between now and March, and the economic side will be tough. But we need the closest possible cooperation in tackling the security challenges we both face, and I am optimistic we can do this,” he said.
“Those people who are trying to harm us do not make a distinction between member states. We are facing shared threats, which are best tackled if we act together. This is true today, and it will be true after March 2019. It is this shared self-interest that I believe will drive cooperation on the security side,” he added.
There was “no dispute” on the need to support member states in the security and defense field, according to King, but rather the challenge is finding ways to strengthen such collaboration.
He praised recent EU investment in new security and defense initiatives, such as the Permanent Structured Cooperation and the Coordinated Annual Review on Defence, which, he pointed out, involve “tens of billions of euros.”
While the EU was “doing OK” in tackling the twin threats posed by cyberwarfare and terrorism, he conceded that there is “an enormous amount still to do.”
One example, he said, involves addressing artificial intelligence. This could be a force for both good and bad, he suggested, but the EU has been “slow” in responding to the challenges posed by AI.
King's comments were echoed by Jaap de Hoop Scheffer, NATO secretary general from 2004-2009, who said he also hopes that, post Brexit, the EU and U.K. will enjoy the “closest possible cooperation” on defense and security issues. “Yes, we all want the EU to take more responsibility in the defense sphere, but you have to ask: ‘What is European defense without the U.K.?' ”
Both were speaking during “A Brave New World,” a debate organized by Friends of Europe, a leading Brussels-based think tank.
Elsewhere, a leading U.K.-based academic warned that the “Salzburg impasse” puts EU-U.K. security cooperation at risk. Last week's summit of EU leaders in Salzburg ended acrimoniously with the EU saying May's trade proposals “would not work.” This has led May to demand “more respect” from the EU side.
Dimitrios Giannoulopoulos, a professor at the University of London, said that “reaching a new security agreement independently of the main Brexit negotiations will be easier said than done.”
“The threat of a ‘no deal' Brexit would seriously disrupt U.K. and EU capabilities in the fight against terrorism and organized crime, at a time when the EU is committed to stepping up its efforts to improve judicial and police cooperation in Europe," he said.
Speaking separately, Gordon Sondland, the new U.S. ambassador to the EU, has pledged to work with the EU “honestly and constructively to address the global security threats that seek to destroy our shared history, values and culture.”
“Whether defeating the Islamic State, countering North Korea's belligerency or ensuring energy supplies will never be used for political coercion, we will stand together," the diplomat said. "There are a wealth of issues we can tackle together. From malign Russian activity (ranging from disinformation campaigns to invasion and occupation of sovereign nations), to data privacy, to Iran — yes, even Iran — we work best when we work in tandem.”
April 26, 2021 | International, C4ISR
The upgrades will modernise the way in which NATO's transportable shelters transmit, relay and receive critical mission data from ally nations by replacing the current communications suite with a future-proof...
March 16, 2020 | International, Aerospace
By Antoine Gelain Behind the big aerospace and defense (A&D) primes like Boeing and Airbus and the “Super Tier-1s” such as United Technologies (UTC) and GE, a very different type of company is shaping the global A&D industrial landscape in a way that may be even more impactful than high-profile UTC-Raytheon-type mergers. Companies such as Teledyne, TransDigm and Heico are the spearheads of a breed of A&D players dedicated to “components and subsystems,” with explicit and perfectly executed “horizontal” external growth strategies. Their track records are impressive: These three companies—with combined revenues of more than $10 billion—have collectively made close to 200 acquisitions and delivered more than 20% average annual growth rate in either profitability or share value over the last 20 years. Thanks to such returns and skyrocketing market valuations, they are able to outbid most other contenders when going after an acquisition target by leveraging the so-called “accretive effect.” This effect boosts the acquiring company's earnings per share, as long as the price paid for the target as a ratio of the enterprise value (EV) over its earnings before interest, taxes, depreciation and amortization (EBITDA) is lower than that of the acquiring firm. As it happens, the current EV/EBITDA ratio of the three above-mentioned companies stands at more than 18 (see graph). By comparison, most other A&D companies have an EV/EBITDA ratio in the 9-13 range. Such “buying power” is enhanced by operational synergies (for instance, in corporate overheads, sales and marketing), which immediately boost the profitability of the acquired company and can therefore be factored in the offer price. This gives them an additional edge against pure financial investors like private equity (PE) funds, which have historically been strong buyers of such component and subsystem businesses. Two recent deals in Europe (one still ongoing) illustrate this new balance of power. The first concerns Souriau-Sunbank, a $360 million-revenue specialist in interconnection technology for harsh environments. After being owned successively by two PE funds and bought by Esterline (now TransDigm) in 2011, it was again put up for sale last year. While expectations were that a PE fund would grab it, another industrial buyer, Eaton Corp., won the contest, paying the hefty price of $920 million (an EV/EBITDA multiple of 12). The second deal relates to a French company called Photonis, a world leader in night-vision technology for defense and space applications, for which Teledyne is apparently bidding—and offering a price 30% higher than the highest PE bid! These deals highlight the limits of the traditional private equity model (too short-term and too short-sighted) and why the “new predators”—all publicly listed companies—are in a much better position to continue to thrive. In fact, by combining “private equity-like growth in value with liquidity of a public market,” as TransDigm puts it, they are not only beating PE players at their own game, but they are also capturing a significant share of the A&D capital market by offering investors an attractive alternative to the traditional vertically integrated groups such as UTC, Thales or Safran. These groups are typically too busy focusing on large systems and equipment to realize that they would actually benefit from articulating a proper “component and subsystem” strategy. They would benefit not only because their portfolios are still full of such businesses, but also because their long-term competitiveness largely depends on their ability to nurture a strong network of strategic suppliers, in terms of both criticality for their own systems and national sovereignty. As it happens, Photonis seems to be such a strategic supplier, since the current French government just announced it would veto the Teledyne deal, hoping to give other French or European companies or investors time to make a competitive offer for the business. But because PE funds, at least in Europe, are somewhat faint-hearted when it comes to ambitious sector-specific “horizontal” portfolio strategies, and because Europe has no industrial player able to compete with the likes of Teledyne, the outcome of the process is still highly uncertain. In any case, Teledyne, Heico, Transdigm and similar companies are surreptitiously reshaping the A&D industrial landscape by buying technological nuggets and component businesses left and right, on both sides of the Atlantic. In the process, they are boosting their shareholders' returns and changing the balance of power with both traditional private equity investors and large vertically integrated A&D groups. As the saying goes: One man's meat is another man's poison. https://aviationweek.com/aerospace/manufacturing-supply-chain/opinion-how-new-predators-are-reshaping-aerospace-landscape
September 22, 2020 | International, Land, C4ISR
Jen Judson WASHINGTON — Army Futures Command has given the green light to the Maneuver Capabilities Development and Integration Directorate to move forward on developing a plan to equip tactical and combat vehicles with electric power, according to a Sept. 21 statement. The directorate will begin drafting a requirements document for Tactical and Combat Vehicle Electrification (TaCVE) and will host an industry day Oct. 20 to share its electrification initiatives with industry. CALSTART, an organization that focuses on clean technology transportation, and the Ground Vehicles Systems Center will cohost the event. The electrification effort aims to decrease the Army's reliance on fossil fuels. “The requirement also aims to increase operational reach across all maneuver formations through electric propulsion, which offers a variety of operational and tactical benefits,” a statement from the directorate read. “These include the potential to double operational duration, implement silent mobility, increase silent watch, and potentially reduce the Army's logistical burden by nearly half when fully implemented,” it stated. The Army launched an earnest effort into electrifying the brigade earlier this spring. Lt. Gen. Eric Wesley, then-director of the Futures and Concepts Center within AFC, told Defense News at the time that the effort is easier said than done and doesn't just just focus on simply powering a vehicle electrically. Instead, it would attempt to work out how an entire enterprise that would support those electric vehicle fleets and other capabilities could work. “Let's be clear. We're behind. We're late to meet on this thing,” Wesley said. “If you look at all of the analysis, all of the various nations that we work with, they're all going to electric power with their automotive fleet, and right now, although we do [science and technology] and we've got some research and development going on and we can build prototypes, in terms of a transition plan, we are not there.” Army officials know there will likely be a time where vehicles that use fossil fuel and ones that are all-electric share the battlefield. “What is the distribution plan that enables that?” Wesley wondered. “That is much more complex when you look at the implications for an entire enterprise.” Wesley was preparing a proposal for the head of Futures Command on how the service might accomplish such an endeavor that could change the paradigm of the logistics and sustainment tails as well as enhance force mobility. The proposal was intended to make a business case for the Army electrifying the formation, discuss the technical feasibility and describe a transition process. The MCDID requirements development process gives the overall effort traction to move out quickly. https://www.defensenews.com/land/2020/09/21/army-gives-green-light-to-shape-vehicle-electrification-requirements/