17 avril 2020 | International, Naval
By: Sebastian Sprenger
COLOGNE, Germany — The German government is facilitating talks between major naval shipbuilders in an effort to set up a national conglomerate rivaling industry champions like Naval Group in France and Fincantieri in Italy, according to a local media report.
Negotiations to that effect have been ongoing behind closed doors since the beginning of 2020 between ThyssenKrupp Marine Systems, German Naval Yards Kiel, and Lürssen, broadcaster NDR reported Thursday.
Top executives from the companies confirmed the developments on Twitter, though without elaborating on the status of the negotiations.
News of the consolidation plan comes in the wake of German Naval Yards Kiel and TKMS losing a multibillion-dollar contract for new Germany Navy frigate-type ship, dubbed MKS 180. Dutch bidder Damen won the competition in January. The Dutch company has teamed with Lürssen for the program, vowing to do most of the construction work in Germany.
Still, the MKS 180 award angered industry lobbying groups in Germany, who argue that the country's good-faith effort to carry out a European Union mandate for bloc-wide competition in major public programs backfired. Other European countries tend to keep such defense-related work within their own industrial ecosystems, the argument goes.
“The need for a German consolidation in naval shipbuilding has been repeatedly emphasized by us and our owner, Privinvest, during the past few years,” German Naval Yards Kiel CEO Jörg Herwig was quoted as saying in a statement. “Only a strong German player will be able to remain globally competitive and strengthen the German technology sector.”
Privinvest is owned by French-Lebanese businessman Iskandar Safa.
A request for a statement from the German Ministry for Economic Affairs and Energy was not immediately returned on Thursday.
The idea of a unified German naval industry cluster runs counter to the narrative that the European defense market should focus less on national retrenchment and instead bank more on efficiencies through cross-continental mergers.
“I think we have to be honest with ourselves and admit that European defense acquisition will be mostly national, and maybe binational or trinational,” said Sebastian Bruns, a naval analyst with the University of Kiel in northern Germany.
Bruns said Lürssen's role in the consolidation talks will be interesting to watch because the company has its foot in the door of the MKS 180 program — through Damen — and at the same time would benefit from a German industry conglomerate with the Navy as a guaranteed customer.
All the while, German Naval Yards Kiel has begun the legal process of challenging the Defence Ministry's pick of Damen for the business. Letting the litigation play out in the courts is all but certain to cause a delay in the eventual delivery of the vessels to the sea service.
But in the course of future consolidation talks, the government could use its leverage as the broker — and ultimate approval authority — to put the protest by German Naval Yards Kiel to rest and let the MKS 180 program proceed swiftly, Bruns said.
“In the end, the most important question is what actual results will come out of this,” he said.
3 août 2024 | International, C4ISR, Sécurité
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17 septembre 2018 | International, Aérospatial
By: David B. Larter A shortage of skilled workers and repair parts is causing backlogs in maintenance depots for Hornets and Growlers, creating headwinds in the Navy's efforts to put more aircraft in the air, the Government Accountability Office found. The Navy, which is chipping away at a readiness crisis among its fighters and electronic attack aircraft, is being hampered by a lack of skilled workers and capacity, specifically at depots on the West Coast at Whidbey Island, Washington, and Lemoore, California. Furthermore some parts needed to repair the Hornets and Growlers were manufactured by suppliers who have gotten out of the business, significantly slowing the process and forcing the Navy to cannibalize parts on aircraft to offset the delays, the September report found. One challenge pointed out by the GAO is the distance between where aircraft are based and maintained and where parts are repaired for the E/A-18G Growlers. The Growlers, largely based at Whidbey Island, many of the components that need fixing must be repaired at the depots in Lemoore. “However, according to officials, Lemoore's depots have limited capacity to repair these aircraft, creating a maintenance backlog,” the report found. The issue of manufacturers getting out of the business was at least in part caused by the Navy's shorting of repair parts accounts during Obama-era budget cuts. A recent study found that between 2011 and 2015, as many as 17,000 suppliers left the defense industry. The Vice Chief of Naval Operations Adm. Bill Moran discussed the supplier issues with Defense News in April, saying stable funding should get suppliers to come back into the pool. Full article: https://www.defensenews.com/naval/2018/09/15/skilled-worker-parts-shortages-still-hurting-hornet-and-growler-maintenance-government-watchdog-finds
28 février 2020 | International, Aérospatial
Steve Trimble ORLANDO, Florida—Lockheed Martin sees Poland's defense industry as a potential low-cost manufacturing source for the F-35 program, as “upward pressure” continues to grow on aircraft prices beyond Lot 14 partly due to the loss of Turkey as a low-cost manufacturing source. “Poland is a new opportunity to provide higher quality and lower cost,” said Greg Ulmer, Lockheed's vice president and general manager of the F-35, speaking to journalists at the Air Warfare Symposium here. Last month, Poland signed an order to buy 32 F-35As from production lots 16-23. The acquisition helps the NATO member that shares a border with Russia to replace its remaining fleet of Soviet-era fighters. But the deal also opens a new industrial source for the overall program. Meanwhile, the U.S.-led Joint Program Office is still working out procedures for finally expelling Turkey from the F-35 supply chain. A decision by Ankara last July to accept deliveries of Russian S-400 air defense systems prompted the U.S. government to cancel Turkey's remaining F-35 orders and suspend the country from participating in the program. An executive steering group is continuing to finalize plans to expel Turkey's companies, Ulmer said. The loss of Turkey's industrial base comes as the F-35 production system enters a transition period. After annual output more than doubled to 134 aircraft in 2019 from 66 in 2017, the pace of growth is slowing, with about 170 deliveries expected by 2023 as upgraded Lot 15 jets roll off the assembly line. The production ramp-up helped Lockheed dramatically lower prices, with F-35As from Lot 14 delivered in 2022 projected to cost $78.9 million each. As the pace of the ramp-up slows, Lockheed is starting to see “upward pressure” on recurring procurement costs after Lot 14, Ulmer said. A request for proposals sent by the U.S. program office to Lockheed recently for Lot 15 includes a greater variance between guaranteed orders and priced options than the company has seen before, Ulmer said. The minimum number would decline in annual production after Lot 14, he said, and the maximum could increase deliveries. The insertion in Lot 15 of Technical Refresh 3 upgrades under the Block 4 modernization program should not change recurring production costs, Ulmer added. The upgrades, which include a new integrated core processor, panoramic cockpit display and additional computer memory, should be a “cost neutral” upgrade, Ulmer said. https://aviationweek.com/shows-events/air-warfare-symposium/lockheed-seeks-options-f-35-cost-pressure-rises