While I have over the years frequently written on BAE Systems large scale international activities plus various UK based Platforms & Services businesses including Military Air & Information and all aspects of Maritime based manufacturing activities, I have rarely if ever written in relation to the company’s large UK based Land Systems activities.
My recent visit to BAE Systems Telford and which is to be regarded as the centre of excellence for the company’s UK based combat vehicles operation including in-service support, life extension programmes and bridging activities provided an opportunity to look at what is clearly a vibrant, well managed and well-invested business, one that not only has a long and very interesting history but more importantly, one that in my view has a potentially very interesting future.
Land (UK) Business Overview
The primary activities within the Land (UK) Business grouping comprise design, manufacture, upgrade and support of tracked and untracked and amphibious combat vehicles. In addition, the company manufactures ammunition and precision munitions and is a supplier of artillery systems and missile launchers, precision imaging and targeting solutions. BAE Systems manages and operates munitions facilities that support and sustain UK national capabilities.
Operating from four main sites in the UK together with a number of satellite operations, BAE Systems overall land based business grouping comprises Weapon System and Munitions, for which the company remains lead in the delivery of small arms ammunition, ordnance plus advanced ammunition and related products plus through life management, Platform and Mission Systems Integration, lead systems integration for new tracked and wheeled vehicles, Platform Upgrade for which the company has secured prime roles in military vehicle upgrade programmes and which will be the primary object of this report, Bridging in which the company remains lead provider of military bridging technology and capability for the British Army and for export, Support Services which includes through life capability management and mission support for military combat vehicles and bridging and finally, CTA International, a 50/50 joint venture company between BAE Systems and Nexter Systems that will provide 40mm cannons for the British Army’s new Ajax armoured fighting vehicle and also for the planned Warrior Armoured Personnel vehicle upgrade.
Ahead of further planned visits to BAE Systems munitions and other land based activities in the UK I will concentrate here primarily on the manufacture, upgrade and support of tracked and untracked vehicles.
Although also based at Telford, due to much of this piece being concentrated on the recent award by the MOD of the assessment phase of the Challenger 2 Tank life extension project to the two competing partnership involved including BAE Systems, I intend to write on the hugely important Army bridging activities separately at a later date.
It had been over thirty years since I had last visited what is now BAE Systems Telford and which, on that occasion, I recall was engaged building the British Army’s superb fleet of tracked Warrior Armoured Personnel Carriers, a capability that is itself now moving through an extensive upgrade process.
Specific BAE Systems Telford Activities
The range of vehicles that BAE Systems Telford is responsible for also includes the Challenger 2 Main Battle Tank, the Warrior infantry fighting vehicle as mentioned, Terrier combat engineer vehicle and all military bridging systems. Apart from manufacturing and support, the Telford operation has a long history of engagement vehicle upgrade programmes and as mentioned, having moved the activities from Wolverhampton to Telford a few years ago, the operation now being the lead provider of bridging capabilities for the British Army and related products that include a substantial amount of export related work. As mentioned, this activity will be covered separately.
Vehicle Upgrade Market
A hugely important business segment for BAE Systems, the market value of combat vehicle upgrades is estimated to be around £32 billion by 2026. Jane’s Defence recently suggested that upgrade work is likely to take the majority share of the ground vehicle market. In recent years there has been a requirement for change in respect of improving survivability and the UK is one of many countries that are now actively engaged in upgrading tracked and untracked vehicles not only to improve survivability but to include active protection systems and also engage in autonomous vehicle design. BAE Systems is at the forefront of such technology.
BAE Systems continues to actively support the British Army fleet of Warrior Armoured Personnel Carriers plus those built for export, the Challenger 2 Main Battle Tank plus the Terrier combat engineer vehicle and other tracked and untracked articulated vehicles. Telford is a very interesting and well invested site and hugely important in respect of employment in the County of Shropshire. Looking toward the immediate future the main focus of opportunity is the planned upgrade on the Challenger 2 main battle tank.
Challenger 2 Life Extension Project
Late in 2016 the UK Ministry of Defence awarded assessment phase contracts on the Challenger 2 Main Battle Tank upgrade programme worth £53 million (£23 million each) to BAE Systems and to the competing German partnership led by Rheinmetall. The award of the Assessment Phase contracts also includes a further £7 million to cover additional work.
The MOD’s investment will allow BAE Systems and Rheinmetall to undertake technical studies, produce detailed digital models and consider how upgrades will be integrated onto the current platform. At the end of the Assessment Phase the companies will then present their solutions to the MOD for consideration. The Demonstration and Manufacture Phases of the project will then follow on.
Challenger 2 Main Battle Tank
Built originally by the Vickers tank factory that would ultimately become part of BAE Systems, the Challenger 2 Main Battle Tank has been in service since 1998. The plan envisages that 227 Challenger 2’s will be upgraded by the winning partnership and that when complete the capability will be able to meet all force structure and readiness needs.
Famous for its extensive use of Chobham armour, the Challenger 2 Main Battle Tank is operated by a crew of four. Powered by a 12-cylinder, 1,200hp Perkins CV12 diesel engine with a David Brown TN54 Gearbox, the Challenger 2 capability carries a 120 millimetre main gun together with two 7.62 millimetre machine guns and is capable of a top speed of around 59 kilometres per hour. Challenger 2 is currently in service with the Queen’s Royal Hussars, the King’s Royal Hussars and the Royal Tank Regiment
While the Challenger 2 Main Battle Tank never quite achieved the level of hoped for exports (Oman was the only export customer) it is worth noting that Challenger 2 capability has more than proven its worth in combat in many of the conflicts that UK armed forces have been involved over the past twenty years, most notably perhaps the operations in Iraq in the 2000s.
Suffice to say that there has been very little if any investment by the MOD in Challenger 2 since the original programme was delivered in the 1990’s. Not surprisingly for a product whose design emanates from the early 1990’s and that was built in the years that followed, there is a large amount of obsolescence to be found in Challenger 2 including in the turret, sights, electronics and many other aspects of the capability. The assessment phase requirement will require obsolescence issues to be addressed within the scope laid down by the Life Extension Programme (LEP) while at the same time, maintaining and enhancing current capability in key areas if and where practical in order to facilitate Challenger 2 growth options.
Recent developments in electronics, computing and sight optics mean that upgrades to several of the tank’s components are now possible and required. Split equally between the two competing companies for the work, the total value of the Challenger 2 Main Battle Tank Assessment Phase is put by the MOD at £53 million. This includes both £23 million Assessment Phase contracts and a further £7 million to cover additional work.
The contract awarded to BAE Systems and its competitor will allow each to undertake technical studies, produce detailed digital models and consider how upgrades will be integrated onto the current platform. At the end of the Assessment Phase they will be required to present their respective solutions to the MOD for consideration. The Demonstration and Manufacture Phases of the project will follow on from there.
With the predecessor company having been responsible for design and build of the Challenger 2 Main Battle Tank for the British Army and BAE Systems having supported Challenger since its entry into service the company has experience and knowledge of the capability that is second to none. BAE Systems continues to be the design authority on Challenger 2 and has been engaged on various through-life Urgent Operational Requirements (UOR’s) for the capability. The competition plan aims to extend the life of Challenger 2 to 2035. Through life in-service support will be part of the eventual arrangement and the plan intends for removal of substantial obsolescence and improvements wherever possible in key areas.
Team Challenger 2 which would be responsible for delivery of the capability upgrade programme comprises of some of the most important industrial players in defence and that between them provide substantial technology relevance that a huge upgrade programme such as this demands. The Team Challenger 2 partnership comprises General Dynamics Mission Systems (Fire Control Systems) Leonardo (Thermal Imaging) General Dynamics Land Systems (Electronic architecture and that I understand is designed for commonality with the Ajax armoured vehicle currently under construction by GD) Moog (Gun Control Equipment) Safran (Sighting Systems) QinetiQ (Systems Engineering) Babcock International (future in-service support) together with the Army and DE&S.
Improved fightability, safety plus reduction of risk to both Army personnel user and MOD customer, ensured maintenance of current capability and removal of substantial obsolescence are at the heart of the programme.
Some core solution building blocks for Challenger 2 to be addressed by the Team Challenger 2 partners include modernisation of gunners, commanders and all other sight architecture, provision of a new commander’s crew-station, laser warning systems, gun controls, fire controls, video architecture and electronics, the latter to be compliant with that of Ajax. There are various other potential options such as display, local situational awareness, power and signature management, battery monitoring and other potential upgrade possibilities.
BAE Systems knows and understands Challenger 2 Main Battle Tank capability very well and importantly, having worked alongside them for so long, the Army’s requirement of it. The company and its forebears were responsible Challenger 2 design and for that reason they remain the design authority, an important aspect in relation to personnel safety.
The company also understands MOD processes and requirements well and recognise the importance of providing value for money. They recognise too that the Challenger 2 upgrade plan must be focussed on reduced cost of ownership, improved reliability, reduced maintenance and training time plus the provision of in-service support.
While the Challenger 2 upgrade plan is focussed on obsolescence removal and providing future proofed capability it must also take into account optimisation of previous MOD investment such as the ongoing Ajax armoured fighting vehicle programme. Importantly the BAE Systems plan recognises the importance that an upgrade programme such as this provides to the UK prosperity agenda, to UK employment, skills retention and training together with regional development. In respect of the partnership and the manner that the plan is being brought together, to my way of thinking this is an interesting potential example of whole force concept at its best.
Other Future Opportunities
As mentioned earlier, the upgrade market over the next ten years is expected to be worth in excess of £32 billion meaning that this is a substantial market in which to grow the business. To achieve this requires constant investment not only in order to enhance existing capability but also to create products, ideas and concepts that match what markets and potential customers might in future require. BAE Systems is well placed to extend itself and play a very large part in what is a growing lands systems equipment upgrade market.
Maintaining strong land systems sovereign capability in the UK is essential and BAE Systems has proven itself over many years to be the partner of choice.
CHW (London – 13th June 2017)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785