By: Joe Gould 1 day ago
WASHINGTON ― General Dynamics has received $1 billion since the renegotiation of a $10 billion contract for Canada to sell light armored vehicles to Saudi Arabia, company officials said on its first quarter earnings call.
In a deal last month, Canada lifted its ban on arms sales to Saudi Arabia, which in turn agreed to a speedier payment schedule for the LAVs. Canada had the vehicles on hold since 2018, following the death of Saudi journalist Jamal Khashoggi; and by October, Saudi Arabia had racked up $1.5 billion in back payments to General Dynamics.
Amid news on the April 29 call that the company's revenue fell $512 million in connection with the coronavirus pandemic, General Dynamics Chief Financial Officer Jason Aiken highlighted “the formal signing of the restructured contract on the Canadian international program, which settled all issues to the satisfaction of the parties.”
“With respect to our standing receivable you may recall that we received $500 million early in the first quarter and we received another $500 million this month. This will be very helpful to free cash flow in the second quarter,” Aiken said.
“We will begin a regular cadence of scheduled payments in 2021 consistent with deliveries and making further progress in the scheduled amortization of the arrearage.”
The company's Combat Systems division had revenue of $1.7 billion, up 4.4 percent over the same quarter last year, and sales to the U.S. government were up 12 percent. The firm's aerospace business segment also had revenue of $1.7 billion, but that represented a 23 percent fall from the same quarter last year.
On April 9, Canada's foreign affairs minister, François-Philippe Champagne, announced Ottawa was “able to secure significant improvements” to the LAV contract, including more latitude for the Canadian government to speak about it.
Under the new terms, Canada could also delay or deny export permits without penalty if it learned Saudi Arabia was not using the vehicles for their stated purpose. Ottawa would also be reviewing permit applications on a case-by-case basis to ensure they meet Canadian law and the U.N. Arms Trade Treaty.
Though the Trudeau government has been under political pressure to scrap the LAV deal over human rights concerns, Champagne said its cancellation would have “resulted in billions of dollars in damages” and risked thousands of Canadian jobs across the defense supply chain.
The vehicles are made by the General Dynamics Land Systems subsidiary in London, Ontario.
3 décembre 2024 | Local, Naval
Today, Commodore Matthew Coates transferred command of Standing North Atlantic Treaty Organization (NATO) Maritime Group Two (SNMG2) to Rear Admiral H. İlker Avcı of the Turkish Navy, during a ceremony at the Aksaz Naval Base in Türkiye.
10 mars 2020 | Local, Aérospatial, Sécurité
A new Department of National Defence report says military search-and-rescue personnel were delayed and in some cases unable to provide emergency assistance on about one in 20 of the hundreds of calls they received last year. While some of the problems related to bad weather, animals on runways and having to wait for provincial medical teams to arrive, more than half were attributed to refuelling issues and breakdowns on the military's ancient search-and-rescue aircraft. The Canadian Armed Forces says the refuelling problems and breakdowns, which afflicted a total of 20 search-and-rescue missions, did not lead to any deaths. Yet they do raise questions about the military's ability to respond quickly to potentially life-threatening emergencies given the age of its search-and-rescue aircraft, some of which entered service in 1967. The Royal Canadian Air Force officially accepted the first of 16 new search-and-rescue planes from European manufacturer Airbus in December, but the aircraft is still in Spain where it was built and has yet to make the trip to Canada. The government has also said it plans to replace the air force's aging air-to-air refuelling tankers, but the first replacement isn't expected until 2028 at the earliest. https://globalnews.ca/news/6650860/military-search-rescue-mission-problems/
26 avril 2018 | Local, Naval
David Pugliese The problems centre around technical issues. Some are minor but in other cases there is a view among defence industry officials that Canada is asking for too much in some areas Canada's quest for a new fleet of warships is off to a rocky start with all bidders failing to meet some of the federal government's requirements. Procurement officials are now trying to regroup on the $60-billion project and figure out ways that bidders might be able to change their proposals to make them acceptable, a number of defence industry executives pointed out. The problems centre around technical issues. Some are minor but in other cases there is a view among defence industry officials that Canada is asking for too much in some areas such as radar, which may be causing problems with meeting requirements. Public Services and Procurement Canada spokeswoman Michèle LaRose said the bids received for the Canadian Surface Combatant project have not been disqualified. Three bids have been received. The federal government and Irving Shipbuilding are still evaluating the proposals, she added. LaRose pointed out that the evaluation is at the second stage in the process. Government officials say that involves what is known as “the cure process” in which bidders will be given details of how their proposals have failed to meet the stated criteria. They will then be given only one opportunity to fix issues with their bids. If they are still considered “non-compliant” after the cure period they “will be eliminated from the competition,” according to the federal government. Technical specifications are now being evaluated by the government. Later this year, the companies will provide the financial information related to their bids. Warship builders submitted their bids on Nov. 30. A winning bid is expected to be selected sometime this year. Irving Shipbuilding will begin construction of the first ship in the early 2020s and delivery of the first vessel is expected in the mid-2020s, according to the federal government. But the project has been plagued with delays and controversy. The final cost of the ships is still unknown. In 2008 the government estimated the total cost of the project to be about $26 billion. But in 2015 navy commander Vice Admiral Mark Norman voiced concern that taxpayers may not have been given all relevant information, and publicly predicted the cost for the ships alone would be around $30 billion. Cost estimates for the project are now between $55 billion and $60 billion. About half of the cost is for systems and equipment that will go on the 15 ships, according to federal documents obtained by Postmedia through the Access to Information law. “Approximately one-half of the CSC build cost is comprised of labour in the (Irving's) Halifax yard and materials,” the documents added. Last year, Jean-Denis Fréchette, the parliamentary budget officer, estimated the CSC program would cost $61.82 billion. He also warned that every year the awarding of the contract is delayed beyond 2018, taxpayers will spend an extra $3 billion because of inflation. The surface combatant will be the backbone of the future Royal Canadian Navy. In November in a surprise twist a French-Italian consortium declined to formally submit a bid and instead offered Canada a fleet of vessels at half the price. Officials with Fincantieri of Italy and Naval Group of France said they don't believe the procurement process as it is currently designed will be successful. Instead they provided the Canadian government with a direct proposal that Irving Shipbuilding on the east coast construct 15 ships based on the consortium's FREMM frigate design, which is proven and is currently in operation with the French and Italian navies. They are guaranteeing the cost of the ships at a fixed price of $30 billion. The deal would have also focused on using Canadian technology on board the ships and included technology transfer to Canadian firms, so they could be involved in future sales of the FREMM vessels on the international market. FREMM ships are operated by the Italian, French, Moroccan and Egyptian navies. Under that plan, Irving could start building the warships almost immediately. The Liberal government, however, rejected the deal. http://nationalpost.com/news/canada/new-canadian-warship-project-off-to-rocky-start-as-bidders-fail-to-meet-some-requirements