May 30, 2023 | International, Other Defence
Ukraine "desperately hopes" that South Korea will provide defensive military equipment such as anti-aircraft systems to fend off Russian attacks, President Volodymyr Zelenskiy was cited as saying in an interview with a South Korean newspaper.
April 7, 2023 | International, C4ISR
The Army's capability set venture kicked off in 2021, with special attention paid to infantry. Additional batches of gear are expected every two years.
March 17, 2020 | International, Naval
By: Sebastian Sprenger COLOGNE, Germany — Hervé Guillou, who took the helm at France's shipbuilder Naval Group in 2014, will retire from the company later this month due to an age limit that comes with the job. He made consolidation in Europe's naval sector a key tenet of his tenure, though there has been little movement so far other than Naval Group's cooperation with Italian shipyard Fincantieri and the resulting Naviris joint venture. With fears of demand drying up at home, Naval Group made an aggressive sales push across the world, perhaps most notably with the multibillion-dollar Australian Attack-class submarine program. The project received some criticism in Australia in recent months, though Guillou brushed it aside and said the Australian government remains committed to the program. Guillou spoke to Defense News' European editor, Sebastian Sprenger, by phone on March 10 about the international marketplace and industrial cooperation. With talk of a need for the European naval industry to consolidate, to what extent do you view Naval Group as a European company? We are the European leader of naval defense and as a strategic pillar we are willing to contribute to the building of the Europe of defense. We could not deliver the value to our shareholders if we didn't have a reasonable balance between our national programs like Barracuda or FDI frigates, coupled with a number of significant programs for export. Like Dassault Aviation, we need about 40-60 percent of value added for export if we want to maintain competences and competitiveness on the full scope of our offer. In our effort for internationalization, we have two streams. One is direct sales; we have established 10 new companies outside France. We have seven new customers in seven new countries such as Belgium, Netherlands, Argentina and Romania. That completely changed our international base. The second aspect is Europe, starting with the joint venture with Fincantieri. We have always said other companies can join. The process is slow, but we are absolutely clear that consolidation is needed if we want European sovereignty to be preserved. We are on the way. Naviris is one step. I hope there will be others. But it's a slow move, particularly in the naval industry because of the political visibility and because of the huge differences between the operational concepts of the European navies. Today, the closest to the French Navy would be the British Navy. But the British are on another agenda after Brexit [Britain's exit from the European Union]. On the submarine side, our closest partner in terms of worldwide, expeditionary capacity for oceanic operations are the Netherlands. On surface ships, because we have done Horizon and FREMMs together, it is Fincantieri. Today, Italy and the Netherlands are the likely first steps in our European road map, but others are welcome to join. In late 2018, you said you would make an overture to Germany's ThyssenKrupp Marine Systems for some kind of cooperation agreement once the Australian submarine deal is settled. Did that happen? No. You need two to tango. I don't know yet what is the consensus — or not — between the ThyssenKrupp leadership, government policies and parliament. It's not for me to interfere in that. I have been sending clear and open messages, and [Fincantieri CEO] Giuseppe Bono did the same, publicly. But today, we have no real answer. Germany and France have a land project together, the European battle tank, and two air projects, the Eurodrone and the Future Combat Air System. Do you think a naval project besides those is feasible? I think you cannot copy the aircraft or the land model to the naval sphere. Again, there are no likely bilateral or trilateral programs with Germany in the naval business because Germany has very different operational needs for their Navy than France or Italy. Their submarines are more coastal submarines, geared toward the Baltic Sea. Their surface ships — for example, when you look at the MKS 180 — are of a total different specification than the FREMM or the FDI, which are heavy, weaponized, combat-focused frigates. The Germans have no need for anything like an aircraft carrier, and they are not going to build SSNs [attack submarines]. So today, in my view, if we do something with Germany, it would be more of an industry agenda, as we did first with Italy, to be able to add and find synergies in our international presence, rather than relying on a bilateral program. And the way our industry consolidates is very different. But we have a survival issue in industry, to be able to find volumes, procurement synergies, export opportunities among ourselves and being mindful that the real competitor is more China and Russia and not Germany, Italy or the Netherlands. We continue to explain that, but we need to be patient. I understand well where the Germans come from. With three German yards — TKMS, Lürssen, and Blohm and Voss — it's more fragmented and difficult for them. What about the argument that it would be hard to mix a former state-owned company like Naval Group with shipyards who don't share that kind of heritage? That is totally wrong, and it's totally badmouthing. We are a company with a private status and an independent board even if we have a French government shareholder. Governance guidelines apply to Naval Group like they apply to all French industry in the market. The government does not interfere with the social interests of the company, and my board would not accept it. The same applies to the false charge that we get government subsidies. It is totally untrue. If it was the case, everybody could file claims against us in the European courts. Some of your competitors have argued that Naval Group is too diversified to be compatible with firms that do nothing but shipbuilding. Again, this is not true. Diversification has been put under control. During my time at Naval Group, I closed two big projects in the nuclear area, which were losing money. I have restricted hugely the area of marine energy production, concentrating on offshore wind and geothermal. We are 98 percent focused on naval business. This is not a good subject for our competitors to argue about. What are your expectations of the new French aircraft carrier and Naval Group's role in the program? Naval Group's role is very clear: We shall be the prime contractor for such program. We are the only one capable of designing and integrating such a warship, which includes the concurrent engineering of the combat system and of the platform, including aircraft, drones, the new electromagnetic catapult from the U.S. — more than 200 functions in all. The hull will be built in St. Nazaire, at Chantiers de l'Atlantique, where the big dock for cruise ships will be used. We expect a decision on the future aircraft carrier program sometime this year. I cannot predict the exact timing, but I am optimistic that the decision will be made this year. We have delivered to DGA [the French defense procurement agency] our preliminary studies, our cost-capability tradeoffs; we have given a lot of details as well on the timing of the possible entry into service of such a new aircraft carrier. The government now has all the information they asked to make their decision. Naval Group has been criticized in Australia about the Attack submarine program recently. Did that catch you by surprise? I must say I'm more disappointed than surprised. We have very, very strong support from our customer and from the Australian government. We know where these attacks come from, and we know how it is used in Europe to damage our reputation for ongoing and upcoming competitions. The first crisis was about postponing by five weeks a design review for a 30-year program. The attacks around that are unfair. The other controversy was about including local industry. What is the official plan on workshare for Australian companies? There is no contractual obligation. But we are in a strategic partnership, and there is a clear commitment from Naval Group to reach 60 percent of local content, which is more than the Collins class. And based on our experience in Brazil or in India, we truly believe that at the end of the day we will reach it. It will take time. It is a long, long way to train new industries, to train people, to transfer technology. But we are absolutely committed to Australia, to this partnership to deliver sovereignty, and to deliver this very, very significant percentage of Australian contracts. Do you think the EU is on a good trajectory to foster defense cooperation? I don't know yet. There are two sides of the coin. On the defense side, I would say the progress made in the last three years is absolutely huge. The European Defence Fund and the European Defence Industrial Development Programme, for example, are significant achievements of the previous commission. Is it due to U.S. new policies? Is it due to Brexit? I don't know. It's probably a mix of a lot of things. With the new commission, my understanding is that there is a clear intention to continue in this direction. Nevertheless, there is the budget discussion, which is not completely finished, and where the budgets dedicated to defense are still under threat. We need time to see what the results will be. I'm rather optimistic. The second issue is more in the civilian-economic area, where we still have a significant issue with the rules for anti-trust in European rules. Those are currently preventing European industry to consolidate at a time when we see the Chinese, Korean and U.S. industries are consolidating. In that context, in the shipbuilding sector, we're not hearing good things about the Fincantieri/Chantiers de l'Atlantique case. This is a big worry for us, as this would prevent European players to turn into world players. How will the European Patrol Corvette become a truly European program? Of course, it cannot be a 27-country project. So Europe has to start with two, three or four. This is a Franco-Italian initiative, which is supported by our two navies and our two governments. It was initiated by Fincanteri and Naval Group, and is carried out by Naviris, our joint venture. Greece has declared their interest formally to join the program. Spain is starting to study the case, though they have not declared officially. If we are three, four countries, it's good enough to start. https://www.defensenews.com/global/europe/2020/03/16/you-need-two-to-tango-naval-group-ceo-herve-guillou-on-business-in-europe-and-down-under/
November 14, 2018 | International, Aerospace
By: Valerie Insinna WASHINGTON — The two companies responsible for producing chaff and flares for U.S. military aircraft could be poised for a major shakeup, and the Pentagon and congressional critics have begun sounding the alarm about this small, vulnerable segment of the defense-industrial base. In an October report to the White House on the health of the defense-industrial base, the Pentagon relayed concerns about the small number of domestic chaff and flare producers, and stated that weakened demand — especially for flares — could leave companies little incentive to make internal investments. Only one producer of chaff exists in the United States: Esterline Defense Technologies, also known as Armtec. Esterline, which also makes flares, is joined by one other domestic flare manufacturer: Kilgore Flares Co., a part of Chemring Countermeasures USA, which itself is a subsidiary of a firm based in the United Kingdom. This already precarious industrial situation may be further rattled by TransDigm Group Inc.'s proposed acquisition of Esterline, two lawmakers said. In an Oct. 29 letter to Defense Secretary Jim Mattis, Reps. Jackie Speier, D-Calif., and Walter Jones, R-NC, called on the Defense Department to block the deal until its inspector general completed an investigation into TransDigm's business practices. The letter was first reported by The Capitol Forum. “TransDigm has repeatedly purchased companies that are the sole providers of Department of Defense items and engaged in price gouging,” Speier and Jones wrote. “The abuses have been sufficiently common and severe enough to warrant a DoD inspector general investigation. Unsurprisingly, Esterline is the sole DoD chaff provider and one of two flare providers. The alarm bells should be ringing.” The industrial base issues, however, extend far beyond TransDigm's proposed acquisition. A small but critical market Chaff and flare are countermeasures used by military planes and helicopters to help evade a missile attack by an enemy aircraft. For the non-stealthy fourth-generation assets that make up the bulk of the services' inventory, these systems are pivotal to that aircraft's defense. Chaff — which comprises “millions of tiny aluminum or zinc-coated fibers” — is stored onboard an aircraft in tubes and ejected behind the plane to confuse radar-guided missiles, the Pentagon's defense-industrial base report stated. Meanwhile, flares distract heat-seeking, infrared-guided missiles “by ejecting magnesium pellets from tubes to ignite in the wake behind an aircraft,” the report states. Those pellets are so hot — more than 2,000 degrees Fahrenheit — that the temperature exceeds that of the aircraft's engine or exhaust, tricking an infrared-guided missile about the path of the aircraft. According to the industrial base report, “defense unique requirements and decreasing DoD demand drove out other suppliers, leaving a single qualified source for chaff.” Peter Navarro, the White House's director of the Office of Trade and Manufacturing Policy, called attention to the fragile chaff supply base during a Nov. 9 speech at the Center of Strategic and International Studies, calling it a “single point of failure.” Meanwhile, the outlook for flare companies seems even more grim, with the report noting a number of explosions that had plagued both Esterline and Kilgore over the past several years, often leading to factorywide shutdowns that delayed deliveries of product to the Defense Department. “Both companies have experienced quality and delivery problems since the accidents,” the report stated. “As program offices look to improve quality and cost, they are beginning to look offshore at more modern facilities, where there are fewer quality and safety concerns.” One of the biggest problems facing chaff and flare manufacturers is the fluctuating demand signal from the Defense Department — their only customer for the product — based on the military's operational needs, the Association of Old Crows, a professional organization centered on electronic warfare and other countermeasures, said in a statement to Defense News. “Spending on countermeasures flares in the U.S. and among several NATO allies surged during Operation Enduring Freedom and Operation Iraqi Freedom and then dropped sharply as these conflicts reduced their operations tempo or wound down,” the organization stated. “The industrial base is small, yet it must be able to meet big fluctuations in customer demand. This creates a tremendous challenge that could be managed more successfully with better coordination among U.S. military customers or even between NATO partners." A history of safety issues and scandal Though chaff and flare companies usually fly under the radar of the defense trade press, when they do appear in the media, it's usually related to life-threatening accidents at manufacturing facilities or the like. In May 2016, Esterline was forced to temporarily halt operations at its plant in East Camden, Arkansas, after an explosion injured two employees. Local newspaper El Dorado News Times reported that one of the victims suffered “a blast to the face,” which left burns on the hands, chest and face, and took shrapnel to the elbow, according to a Facebook post by the victim's relative. Kilgore Flares also sustained several high-profile accidents in recent years, most notably a 2014 explosion that killed one employee at its factory in Toone, Tennessee. The same plant was the site of a 2016 explosion where no one was injured, according to WBBJ 7 Eyewitness News. According to the Occupational Safety and Health Administration investigation of the 2014 incident, the worker had been removing residual flare materials that ignited, prompting the explosion. “The investigation identified noncompliance in process safety information, process hazard analysis and ... operating procedures. The employee suffered severe burns on multiple areas of his body and was transported to a hospital, where he received medical treatment and burn therapy, but died from his injuries,” the administration had said. Kilgore also came under the scrutiny of the U.S. Justice Department in 2016 for selling the Army flares made with magnesium that a supplier — ESM Group Inc. — illegally imported from China. The company was fined $8 million for violating a requirement that all magnesium used to make flares be sourced from American or Canadian suppliers, reported the Memphis-based CBS affiliate WREG. Kilgore and Esterline did not respond to multiple requests for comment. Pat Kumashiro, former head of the maintenance division for the Air Force's Logistics, Engineering and Force Protection Directorate and currently director of the Air Force market at LMI, said China is paying attention to weaknesses in the American defense-industrial base. “They are pretty savvy as it relates to understanding global supply chains, and when they have opportunities to buy mineral rights — and you see them doing a lot of work and being very aggressive in Africa — they are doing it for a reason,” he said. If an adversary such as Russia or China identifies that there are a limited number of sources for chaff and flare, they can find ways to impact U.S. suppliers — which in turn degrades the mission capability of fourth-generation planes, Kumashiro said. “Operational pilots are not going to go into harm's way without an operational chaff [and] flare system,” he said. The evolving landscape for chaff and flare Big changes appear to be coming down the pipeline for both Esterline and Kilgore Flares. For the former, the question is whether the Defense Department allows TransDigm to acquire Esterline. "Our general goal in this area is to promote competition among contractors but also ensure that DoD is paying fair prices for the best, most usable products that it can get,” a staff member of Rep. Speier told Defense News. But Speier and his colleague Jones believe TransDigm could artificially inflate prices by claiming there is a commercial market for those products, which would limit the ability of Defense Department procurement officers to have full access to pricing data, the staffer said. Should the Defense Department decide to allow the TransDigm deal to go forward, Speier may push to add language to next year's defense authorization bill that would pose additional limitations on what products are deemed “commercial,” or it could call on the Pentagon to study the level of competition throughout the industrial base, the staffer said. For Kilgore Flares, the changes appear to be more conventionally positive. This May, Chemring Group said it would spend $40 million to expand Kilgore's production facility in Toone and grow the plant's employment numbers from about 280 to 375 people. From 2018-2022, the company plans to improve existing facilities, construct new buildings and buy modern equipment, including a new flare extruder and assembly facility, the company said in a news release. In total, those expenditures will triple the plant's production capacity. Kilgore's investment may indicate that chaff and flare manufacturers see some relief on the horizon. Industry officials who spoke to Defense News about this sector said they were hopeful the Defense Department's industrial base report could indicate a heightened level of Pentagon interest. The department already has certain levers it can pull to address problems in its supply base. One such effort, called the Industrial Base Analysis and Sustainment program, involves targeted investments to sustain certain manufacturers who produce a critical capability. Another resource is the Defense Production Act Title III program, which offers grants, purchase commitments, loans or loan guarantees to portions of the industrial base that are weakening. The Defense Department called for an expansion of those programs in recommendations to the White House submitted as part of the industrial base report. A classified annex also includes detailed fixes for certain critical industries. So far, however, it's unclear what assistance could be coming down the pipeline for the chaff and flare industry. https://www.defensenews.com/industry/2018/11/13/the-militarys-chaff-and-flare-industry-is-on-fragile-ground