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NEWS IN BRIEF 04 MAR 05

24 Feb 05. Brazil has canceled its plans to spend $700m on jet fighters to upgrade its Air Force. The bidding process for the purchase of 12 new jet fighters was canceled because technological advancements would have rendered the aircraft being considered obsolete, the Air Force said in a statement. “The Air Force is developing alternative studies on the matter,” the statement added. The Brazilian Air Force, in the meantime, will continue to use a fleet of 32-year-old French-made Mirage aircraft until a solution can be found to the service’s need for an upgrade. “We received an official letter from the Brazilian Air Force indicating that the bidding process was canceled,” said Felipe Salles, marketing manager for CSE-Camargo Sistemas and Engenharia, a Brazilian consulting group which represents Rosoboronexport Sukhoi. “The letter does not offer any hint as to the future. It does not say whether the government will open a new process or buy directly,” he added. Embraer also confirmed that it also received a letter from the Air Force canceling the bidding. At the start of his administration in 2003, President Luiz Inacio Lula da Silva postponed the bidding process, saying federal funds should prioritize social projects. The new planes were aimed at shoring up surveillance of Brazil’s vast and porous Amazonian border to prevent incursions by Colombian rebels and the smuggling of drugs, weapons and lumber. Most of Brazil’s 60 fighter jets were purchased in the 1970s and are outdated compared with the air forces of Brazil’s neighbors.

28 Feb 05. The Western Daily Press reported that the Carlyle Group is considering tabling a £450m bid to buy DML – the largest private sector employer in Devon and Cornwall. Carlyle has been involved in informal discussions over the past few weeks with Devonport Management Ltd. The company, based at Devonport dockyard in Plymouth, won the multi-million-pound Trident programme contract to refit the Royal Navy’s Vanguard-class nuclear submarines, and also works on other naval vessels, overhauls railway equipment and undertakes shipbuilding in the private sector. Although a group spokesman would not comment officially, it is understood that Carlyle’s intention would not be to sell off the company piecemeal, but build on its existing success.
The group has already had dealings with the Ministry of Defence through a partnership in the scientific research organisation QinetiQ PLC, previously part of the Government’s Defence Evaluation and Research Agency. DML employs 5,000 staff alone, and its combined presence with the Royal Navy in Plymouth contributes between £450 and £500 million to the city’s economy and supports 15,000 to 17,000 jobs. The company’s largest shareholder is Kellogg Brown & Root, a subsidiary of the controversial US energy and construction giant Halliburton, with 51 per cent of ownership. Balfour Beatty and Weir Group own 24.5 per cent each. Comment: BATTLESPACE contacted Carlyle and the company denied that they had been in discussions with DML. However given that KBR is up for sale it may be sooner rather than later than reorganisation looms at DML. Rumours abound that BAE SYSTEMS wishes to set up ‘SUBCO’ under its sole ownership, a move that may make sense, given the dwindling numbers of the Royal Navy submarine fleet.

028 Feb 05. Less than two weeks after sending his proposed 2006 defense budget to Congress, U.S. Defense Secretary Donald Rumsfeld was retreating from controversial cuts to two aircraft programs, but was resisting efforts to roll back planned cuts in shipbuilding. Rumsfeld made it clear in appearances before both House and Senate Armed Services Committees that he is on the verge of reversing plans to halt purchases of C-130J Hercules cargo planes for the Air Force. And he said that instead of ending the F/A-22 Raptor program after 2008, he now has “left open the question” of how many of the stealth fighters to buy. But when confronted by lawmakers protesting his

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