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21 Sep 19. Airbus irked by Spain’s choice of fighter jet partner. The combat fighter is to go into service in 2040. Airbus has sharply criticised Madrid for choosing defence systems specialist Indra to coordinate Spain’s participation in a Franco-German project to develop a new-generation fighter jet, in which the aviation giant is deeply involved.
The decision, which was taken by the defence ministry in late August, saw Indra chosen to coordinate Spain’s work on a stealth fighter whose development is being led by Airbus and France’s Dassault Aviation.
Airbus chief executive Guillaume Faury told online business journal El Confidencial the group “didn’t see the decision coming” as it was expected to be selected. He said that Indra was a sensors and equipment producer but had no capabilities in airplanes, drones nor satellites.
“You don’t want someone who makes wheels or computers designing your car. You want a carmaker,” he told El Confidencial on a visit to Spain to convince the government to rethink its decision.
Indra is a Spanish technology and defence group which had sales of 3 billion euros ($3.3 billion) in 2018. Airbus group sales in the same year totalled 63,7 billion.
The ambitious Future Combat Air System (FCAS) project will combine a new generation fighter plane with drones, satellites and other aircraft to help reduce the EU’s long reliance on US planes and equipment.
It aims to have the new plane operational by 2040, when it will replace the current generation of Rafale and Eurofighter jets.
Speaking to El Confidencial at the start of his visit, Faury said it was “difficult to imagine” anyone coming in for the design phase who didn’t have the same expertise as Airbus “in planes, drones or satellites, but only in systems and sensors”.
But in a separate interview with El Confidencial on the same day, Defence Minister Angel Olivares showed no willingness to reverse the decision.
“This is not a circumstantial decision, which can be changed overnight. We have decided on Indra, and we will continue to insist that they work together with Airbus and the rest of the industry.”
He also expressed the government’s frustration at its weakening influence within the Airbus Group, in which it holds a four percent stake, compared with the 12 percent held by France and by Germany.
“The relative importance of Spain within Airbus is shrinking,” he said.
“In the latest restructuring, Airbus Spain’s management no longer has an active role on the executive committee of the Group, for the first time.”
Since 2015, Spain’s representative on the board of directors has been chosen by Airbus itself, against the wishes of the Spanish government. (Source: News Now/https://techxplore.com)
19 Sep 19. France, Germany closing in on arms exports pact. France and Germany said on Thursday they were close to an agreement on how to remove obstacles to exporting weapons manufactured in joint programmes, after French firms called for easing German export restrictions.
German curbs on arms exports to non-European Union or non-NATO countries have been a thorn in bilateral co-operation for years. Germany’s SPD party, part of the ruling coalition, is particularly concerned about the trade.
French firms, such as Nexter and Arquus, previously known as Renault Trucks Defense, say the restrictions have hindered deals and have urged the authorities to allow the export of equipment with German parts without requiring Berlin’s green light.
Germany’s ruling coalition agreed in 2018 to ban arms sales to countries involved in conflicts unless a waiver is granted. Germany extended by six months an embargo on sales to parties in the Yemen conflict, seen as a proxy war between Saudi Arabia and Iran.
“On the issue of weapons’ exports, we have a narrow dialogue with our German friends,” French Finance and Economy Minister Bruno Le Maire told a news conference with his German counterpart.
“We have found an agreement on this subject,” he said, without elaborating.
A French finance ministry official said a deal was in the works and was expected to be signed in coming weeks.
Speaking alongside Le Maire, German Finance Minister Olaf Scholz said talks were continuing.
“We have had very constructive discussions and I am confident they will lead to a good result,” he said. “But an announcement will be made only when it is ready and agreed to by all.”
French diplomatic sources have said plans for a new warplane system and new tank, both to be developed by Paris and Berlin, could be undermined if there was no shift in German policy.
French economic newspaper La Tribune reported on Monday that a deal had been reached with Berlin.
In response to the La Tribune report the French Armed Forces Ministry said talks had not been concluded. The ministry declined to comment on Le Maire’s remarks on Thursday.
The newspaper had quoted sources saying Germany would not block French exports to Saudi Arabia and other countries provided equipment was made with less than 20% German components.(Source: Reuters)
19 Sep 19. UK’s New Carrier HMS Prince Of Wales Debuts At Sea. The second of the UK’s new aircraft carriers, HMS Prince of Wales, has left the dockyard and is ready for sea. Eight years after she was laid down – and two after her sister HMS Queen Elizabeth sailed from the very same yard at Rosyth, near Edinburgh – the 65,000-tonne warship was manoeuvred into the Firth of Forth this afternoon, ready to begin sea trials. When she passes beneath the three iconic Forth crossings – lowering her main mast to do so – and strikes out into the North Sea, it means the two largest warships ever built for the Royal Navy will be at sea simultaneously.
HMS Queen Elizabeth is currently in the North Atlantic preparing for operational training with UK F-35B Lightning jets for the first time – paving the way for front-line duties by Prince of Wales just a few years from now. At present, the ship’s company – currently 600 strong – are focusing on a successful spell of sea trials, having prepared for months, gradually bringing the many systems, sensors and items of machinery from the galley to the main engines into life. They are joined for the trials by a team of 320 civilian contractors to monitor how the 280-metre-long leviathan performs and make any necessary adjustments.
Captain Darren Houston, HMS Prince of Wales’ Commanding Officer, said it had taken a monumental effort by sailors, shipwrights, engineers, electricians, scientists and designers from the Aircraft Carrier Alliance to ready the nation’s most advanced warship for her debut at sea.
“I am immensely proud of the professionalism and determination that my ship’s company have shown in preparing themselves and their ship for this historic day.
“Whether through working alongside our industrial partners to support the build and commissioning of key systems or training tirelessly to operate the ship and work as a team, the crew have demonstrated unfaltering dedication and resolve in the face of a multitude of challenges.
“We are looking forward to sea trials and the opportunity to test our new ship before heading to our new home base of Portsmouth to join our sister ship.”
The carrier was moved from the main basin at Rosyth through a narrow lock and into the Firth of Forth in a delicate operation involving nearly a dozen tugs and scores of sailors and engineers lasting several hours, before anchoring upstream.
She will spend a few days at anchor before weather and tidal conditions allow her to sail under the Forth bridges.
Leading Physical Trainer Carl Stubbs joined HMS Prince of Wales in March 2018 and is delighted to see life buzzing through the ship.
“I am extremely excited to go to sea for the first time having seen the ship come together over the past 18 months from being an empty hull to a state-of-the-art aircraft carrier, complete with a fully-trained crew.
“We have been busy getting the four on board gyms stocked with equipment ready to keep our sailors fit during contractor sea trials and we will be running a full fitness programme for the crew whilst we are at sea.”
Fleet Commander Vice Admiral Jerry Kyd, who took HMS Queen Elizabeth to sea for the first time in the summer of 2017, understands the excitement aboard HMS Prince of Wales – and realises what her advent means for the UK and Royal Navy.
‘I am delighted to see HMS Prince of Wales at sea – well done the Aircraft Carrier Alliance and her ship’s company,” said Admiral Kyd.
“This is a hugely significant event for them but also for the Royal Navy and wider UK Defence. This means that, today, the Royal Navy has two aircraft carriers at sea – a powerful symbol of our government’s commitment to a strong defence and a global navy.
“I am hugely proud of the national effort, across so many industrial partners, Ministry of Defence and other agencies which has now delivered both of these magnificent ships that will sit at the heart of our defence for decades to come. I look forward to seeing HMS Prince of Wales arrive in her home port of Portsmouth soon and, in due course, RAF and Royal Navy F-35B Lightning jets flying from her deck.”
Following her sea trials HMS Prince of Wales will sail for her Portsmouth where she is due to be formally commissioned in the presence of her Lady Sponsor, the Duchess of Cornwall, before the end of the year. (Source: U.K. MoD)
19 Sep 19. Defence going quietly off the agenda? Following on from our comments on the decline of the UK defence industry, so aptly covered in the Sunday Times two weeks ago, more evidence of the government quietly turning away from defence came from a BATTLESPACE contact whose company supplies firearms. Whilst understanding that the company was prohibited, at the moment, from fulfilling a large Saudi Arabian order, the company told BATTLESPACE that they were unable even to open a bank account because of the nature of their product. DIT were apparently unbale to offer the company any help. The likelihood is that the company will move offshore taking its technology and IP with it.
19 Sep 19. U.S. unlikely to impose sanctions on Turkey over Russian buy – Turkish official. U.S. President Donald Trump has become more understanding about why Turkey has purchased a Russian missile defence system and he is not expected to impose U.S. sanctions on Ankara over the issue, a senior Turkish official said on Wednesday.
“My expectation is it (sanctions) would not be implemented,” the senior official told reporters in Washington, adding that Trump had grown to empathize more with Ankara’s position. “He understood the whole history behind how we got to purchasing the S-400s,” she said.
Ankara and Washington have been at loggerheads over Turkey’s purchase of the S-400 system, which the United States says is incompatible with NATO defences and poses a threat to Lockheed Martin Corp’s F-35 “stealth” fighter jet that Turkey was also planning to purchase and in which it had been a production partner.
Turkey says it is facing multiple threats from Syria and is in urgent need of a comprehensive defence system.
The United States has expelled Ankara from the F-35 programme over its purchase of the Russian air defence system, whose parts began arriving in Turkey in July, but it has so far fallen short of imposing sanctions on Ankara, even though it had threatened to do so for months. The White House did not immediately respond to a request for comment.
At a bilateral meeting in June in Osaka with Turkish President Tayyip Erdogan, Trump said Turkey had been treated unfairly over its decision to buy the S-400s and blamed the “mess” on the administration of former President Barack Obama.
But he had not ruled out sanctions.
Last week, U.S. Treasury Secretary Steven Mnuchin said the Trump administration was considering imposing sanctions related to Turkey’s purchase of the S-400s but that no decisions had been made.
Erdogan told Reuters in an interview last week that he would discuss buying U.S. Patriot missiles with Trump at next week’s United Nations General Assembly meeting, saying his personal bond with the U.S. leader could overcome the months-long crisis between two NATO allies. The senior Turkish official said any imposition of sanctions would also contradict a recent agreement between Ankara and Washington to boost trade to $100bn after the visit of U.S. Commerce Secretary Wilbur Ross to Turkey earlier this month.
“You make a commitment like that and then you talk about implementing sanctions, that’s a big contradiction in itself,” she said. (Source: Reuters)
18 Sep 19. Airbus SE (stock exchange symbol: AIR) has self-declared to German authorities potential wrongdoings by several employees with respect to certain customer documents relating to two future German procurement projects in the programme line Communications, Intelligence and Security. This self-disclosure follows an ongoing internal review with the support of an external law firm. The company is fully cooperating with relevant authorities to resolve the matter.
18 Sep 19. Austria increases defence spending. Austria’s acting defence minister Lieutenant General Thomas Starlinger on 17 September presented his ministry’s report Unser Heer (Our army) 2030 calling for an increase in defence spending from the current EUR2.4bn (USD2.7bn) to EUR3.1bn in 2020. The report calls for defence spending to gradually rise from the current 0.6% of gross domestic product (GDP) to 1% of GDP or EUR5bn by 2030. It also calls for the replacement of obsolete Saab 105 jet trainers and the upgrade of 15 Eurofighter Tranche 1 aircraft. A total of EUR16.2bn is required to equip the Bundesheer by 2030, according to the report. (Source: IHS Jane’s)
17 Sep 19. NATO Chiefs Look to Alliance’s Future. NATO’s military chiefs of defense worked diligently to ensure the alliance is served in deterrence and defense both today and tomorrow, the chairman of the Joint Chiefs of Staff said.
Speaking with reporters traveling with him, Marine Corps Gen. Joe Dunford provided his insights on the deliberations of the NATO Military Committee’s meeting in Ljubljana, Slovenia, which ended Sept. 15.
The NATO chiefs of defense discussed the alliance’s strategy and how it can shape the future of the alliance. In the United States, officials use the National Defense Strategy and National Military Strategy to ensure all decisions affecting the military today and in the future are strategy-driven. This runs the gamut from how the United States postures its forces to how the Defense Department plans and how the department determines what future capabilities it needs.
NATO chiefs are making sure the alliance can do the same. “[The chiefs] did that because of the competitive environment we find ourselves in today,” Dunford said.
Russia is a competitor, and the NATO advantage over a resurgent Russia has eroded, the general noted. The chiefs of defense recognize this and approved the new NATO strategy in May. This meeting looked at two documents: a broad concept for NATO defense and deterrence, and a capstone concept for NATO operations.
“We are bringing a coherence to the planning that is going on inside NATO, and the collective efforts to develop capability,” the chairman said.
There is a big difference between what the chiefs of defense do as members of the Military Committee and the way they operate in their home countries. In the United States, Dunford works alongside the defense secretary, “actually driving the decisions and the programs,” he explained. “The program reflects all the work that we do. We use the National Defense Strategy and the National Military Strategy. [We] do experimentation, war games, and that drives the investments that we make.”
NATO’s new strategy drives the alliance’s plans, and it also drives the posture of the forces that have been given to NATO by the various countries. It informs, rather than drives, the path of capability development of individual nations, the chairman said.
The document gives the chiefs a collective understanding of the challenges NATO faces. They can then go back to their countries and work with political leaders to make specific defense investments that serve their nation and are complementary to NATO’s needs, Dunford said.
The chiefs also discussed upcoming operations in Afghanistan and the ongoing preparations for the Sept. 28 Afghan elections. Dunford said the commander in Afghanistan, Army Gen. Austin S. Miller, spoke about the support NATO and partner nations are providing for the Afghan government as the election approaches. There is an uptick in operations, as there always is before an election, the chairman said.
The Afghan government wants to give the maximum number of people the opportunity to go to the polls, he pointed out. “The Afghans are running the election, and that drives General Miller’s plan,” Dunford said.
Dunford also shared with his fellow chiefs the thinking on troop adjustments in Afghanistan. He told them that President Donald J. Trump has not made any decisions right now on future posture adjustments.
He further said that Secretary of State Michael R. Pompeo and Defense Secretary Dr. Mark T. Esper committed to transparency with NATO Secretary General Jens Stoltenberg and their NATO counterparts as the United States considers adjustments to posture. “We would make sure they were informed so we can make these adjustments together,” Dunford said. (Source: US DoD)
16 Sep 19. EU creates top post to herd its fragmented defense industry. A new European Commission directorate has been set up for defense industries and space with the portfolio given to Sylvie Goulard, a former French defense minister. As prospective EU commissioner for the bloc’s single market Goulard will be tasked partly with coordinating the EU’s fragmented defense industry on research and development projects.
Some will see the move as a signal that the incoming European Commission President, Ursula von der Leyen, formerly Germany’s defense minister, wants Europe to take more responsibility for its own defense.
Goulard will first face a nomination hearing in the European Parliament next month but this is expected to be a formality before she takes up her new post on Nov. 1.
The appointment has fueled concerns that ever closer EU integration on defense could trigger renewed turf wars between member states, NATO and the United States.
But a European Commission source said that if Europe is to compete worldwide, “it will need to pool and integrate its best defense capabilities, as it is estimated that by 2025 China will become the second-biggest defense spender in the world after the United States.”
While there is currently no EU army and defense remains a matter for member states, the bloc has recently taken big steps to boost cooperation.
The Commission has proposed a marked increase in the EU budget for defense and external security: €22.5bn for 2021-2027, compared to €2.8bn for the 2014-2020 period. If agreed, the draft seven-year EU budget from 2021 allocates €13bn to a European Defense Fund (EDF) to promote cross-border collaboration on defense research and technology projects, plus another €6.5bn to upgrade roads, bridges, rail lines, ports and airports for so-called military mobility, and €16bn on space programs.
Several defense-related initiatives and mechanisms have been set up in recent years, including the Permanent Structured Cooperation (PESCO), the Coordinated Annual Review of Defence (CARD) and the European Defence Fund. These initiatives and the proposed increase in funding at the level of the EU and national budgets can be regarded as a “step change” for European defence.
Concern about deeper EU integration often comes from the UK, which is due to exit the EU on Oct. 31 and traditionally has been highly critical of Brussels assuming more control over defense. British Tory MEP Geoffrey Van Orden, a former senior British Army officer, believes the EU is attempting to duplicate the NATO command structure and to duplicate “all aspects of NATO.”
“While I remain a strong supporter of our defense industries – in the UK, for example, they are major strategic contributors, hi-tech innovators and employers – I do not believe that European interference is what is required to assist them,” he said.
Denis Macshane, a former Europe Minister in the UK, said, “If Europe and the EU is to move to a coherent defence policy this will have to be driven from within the member states themselves. It cannot be ordained by Brussels.”(Source: Defense News Early Bird/Defense News)
16 Sep 19. UK apologises for illegal arms sales to Saudi Arabia. Liz Truss admits breaches of court ruling occurred over exports linked to Yemen civil war. The UK government has been forced to apologise after breaking a court ruling banning it from granting licences to export weapons and other military equipment to Saudi Arabia. Liz Truss, international trade secretary, said two “inadvertent” breaches had occurred of an undertaking given to the Court of Appeal in June that the government would not grant any new licences for the export of arms or military equipment to Saudi Arabia for possible use in the conflict in Yemen. Yemen is in the grip of a civil war pitting the government, backed by Saudi Arabia, against Houthi rebels. It has claimed the lives of thousands.
The UK government in June suspended granting new export licences after the Court of Appeal ruling found its decision-making processes were unlawful. I have apologised to the court unreservedly for the error in granting these two licences Liz Truss In a letter to Graham Jones, chair of the committees on arms export controls for the Commons, Ms Truss said an investigation would be launched into the precise circumstances surrounding the issuing of the licences. One licence identified by the department as being in breach of the ruling included a £200 cooling fan for incorporation in an armoured vehicle. The government also estimated that various radio spares worth more than £260,000 had been shipped to troops deployed in Yemen’s civil war. The licence for the original order of 260 items of radio spares, valued at £435,450, had been issued in July. In her letter, Ms Truss said the Department for International Trade was in the process of revoking the licence as “a matter of urgency”. “I have apologised to the court unreservedly for the error in granting these two licences,” she said. A further licence, for three components for a marine radar system valued at just under £5,000, has been revoked because the government concluded it might be used in Yemen. (Source: FT.com)
16 Sep 19. Angela Merkel deal allows French arms sales to Saudi Arabia. President Macron and Angela Merkel have signed a secret deal in an attempt to ease Franco-German friction over arms exports, notably to Saudi Arabia. The agreement is designed to stop Berlin from blocking the sale of French weapons that contain German parts to countries with questionable human rights records.
There is anger in Paris over Germany’s human rights policy, which the French say is undermining attempts to move towards a common European defence. The row has cast a shadow over efforts by the two countries to relaunch their alliance.
France is the world’s third biggest arms exporter, with 6.8 per cent of the global market, behind the US on 36 per cent and Russia on 21 per cent, according to the Stockholm International Peace Research Institute. Britain is sixth with 4.2 per cent.
Paris fears that its defence industry, which generated €9.1bn in exports last year, could be threatened by Germany’s reluctance to sell weapons to Saudi Arabia — France’s second biggest customer after India and before Qatar. Germany banned arms exports to the Saudis after the killing of Jamal Khashoggi, the journalist.
Mr Macron, like the British government, had no such qualms but French manufacturers say they have nevertheless been caught by the German ban because of the need to obtain export licences from Berlin for equipment containing German parts. Sales to Saudi Arabia and other countries have been lost and delayed, they complain.
The issue has caused tension behind the scenes over, for instance, the export of VAB Mk 3 armoured vehicles and Sherpa Light tactical vehicles made by France’s Arquus and equipped with German parts such as gearboxes.
Emmanuel Levacher, Arquus’s chairman, says that Berlin has held up export licences to Saudi Arabia for as little as a “washer”. He says Germany has also been reluctant to grant authorisation to export equipment to countries such as India, Egypt and Indonesia.
A report by the French national assembly’s foreign affairs committee said that defence groups were avoiding German parts “even if that means buying American components, which runs counter to the desire to develop a European strategic autonomy”. Mr Macron and Mrs Merkel reached an agreement at the G7 summit in Biarritz last month, according to Le Monde. Export licences would not be needed for equipment containing less than 20 per cent of German components. The deal has yet to be made public but is already under fire in France.
“I don’t believe in the efficiency of this agreement because everything will be blocked by the Bundestag,” one arms industry executive told Le Monde. “The Germans cause us problems for everything, absolutely everything, even for anodyne parts like rubber washers.”
“The Germans are perfectly hypocritical,” said another. “[They] continue to sell in the Gulf and get around the restrictions through joint ventures based in South Africa or elsewhere.” (Source: The Times)
16 Sep 19. Turkey, Ukraine seek to jointly produce ‘sensitive’ defense technology. A seemingly lucrative defense architecture is flourishing on both shores of the Black Sea as neighbors Turkey and Ukraine vigorously cultivate procurement relations. Most recently, state-controlled Ukrainian company Ukrspecexport and privately owned Turkish drone specialist Baykar Makina signed what they view as a strategic cooperation deal. The agreement involves development and production of “sensitive technologies in defense and aerospace.”
Ukrspecexport has produced firearms and ammunition since 2011, and the company is known to trade in excess parts inherited from the Soviet armed forces. Its parent company, the state conglomerate Ukrboronprom, operates five divisions: aircraft products and maintenance; precision weaponry and munitions; armored vehicles, automotive equipment, engineering and special equipment; shipbuilding and marine facilities; and radar, radio communications and air defense systems.
“The deal aims to enhance both countries’ capabilities and serial production of the systems they need,” a Turkish procurement official said.
At the heart of the agreement, however, is the planned development and production of advanced drone systems, both armed and unarmed. “One immediate project may involve a high-altitude drone system with high altitude and rapid mobility capabilities specializing in obtaining detailed flight reconnaissance input,” according to the Turkish official. “Future programs may involve drone systems with attack capabilities.”
Ukraine’s newly elected president, Vladimir Zelenskiy, visited Baykar’s production and research and development units during a visit to Turkey in August.
According to a Ukrainian diplomat, the defense cooperation initiative aims to transfer ballistic missile capabilities to Turkey through Ukrspecexport’s parent company.
“The intention is to boost drone capabilities, as both Ukraine and Turkey will in the future need more drone systems with strategic capabilities,” the diplomat said. “Other potential areas of cooperation may also include helicopter gunships.”
A Turkish state aerospace company, Turkish Aerospace Industries, produces the T129 attack helicopter under license from the Italian-British firm AgustaWestland.
The emerging Turkish-Ukrainian defense cooperation has not gone unnoticed in Washington and Moscow.
“We strongly support this initiative between two allied states,” a U.S. diplomat in Ankara told Defense News.
For its part, one of Russia’s diplomats in Turkey said Moscow is keeping an eye on the “bigger picture,” referring to the delivery of the Russian-made S-400 air defense system to Turkey. Ignoring Western concerns, Turkey said it would sign a follow-up deal for more S-400 systems in the near future.
In response to the S-400 deal, the U.S. removed Turkey from the F-35 Joint Strike Fighter program. Since then, Turkey has expressed interest in procuring or co-producing a Russian-made fighter jet. Industry sources say Russian-made alternatives to the F-35 could include the Su-37 or the more advanced Su-57.
An Ankara-based expert of Turkish defense trade with former Soviet states said the drone market is an optimal starting point if Turkey and Ukraine are serious about collaborating on materiel production. “Various drone models may soon come into [the] production stage as geostrategic and military requirements of Ukraine and Turkey match,” he said.
Earlier this year, Baykar Makina won a $69m contract to sell six Bayraktar TB2 UAVs along with ammunition to Ukraine. The company is the most prominent of a new of line Turkish drone makers penetrating the domestic and foreign markets. In a 2017 deal, the firm sold a batch of six TB2 drones to Qatar.
Turkey’s military operates 75 TB2 drones, mainly in its fight against Kurdish militants in Turkey and across the Iraqi and Syrian borders.
The Bayraktar TB2 is a medium-altitude, long-range tactical UAV system. It was developed by Kale-Baykar, a joint venture of Baykar Makina and the Kale Group. The UAV can perform reconnaissance and intelligence missions. Recently, Baykar Makina launched a naval version of the TB2.
In 2011, Kale-Baykar won a contract for serial production for the drone from Turkey’s procurement office. January 2012 saw the development and serial production of the Bayraktar Block B (which was named TB2). It completed its first flight in April 2014. The first acceptance tests of the drone occurred in November 2014, and six of the UAVs were delivered to the Turkish Land Forces by the end of 2014. A second batch of six locally made TB2 drones was delivered to the Turkish Land Forces in June 2015.
“Turkish-Ukrainian defense cooperation will potentially go beyond drone systems,” the Ankara-based expert forecast. “Promising businesses could be armored vehicle modifications and, most notably, the Altay.”
The Altay is Turkey’s first indigenous new-generation main battle tank in the making. BMC, a Turkish-Qatari partnership, last year won a contract for the serial production of an initial batch of 250 units of the Altay. The program is expected to produce 1,000 units in total.
The government of Turkish President Recep Tayyip Erdogan has come under criticism for transferring a military-owned tank factory to BMC under a 20-year lease contract. BMC’s Turkish partners include Ethem Sancak, a close business confidant of Erdogan and former board member of the president’s ruling Justice and Development Party. Opposition politicians called the transfer “an example of cronyism.”
In another politically controversial deal, the government plans to provide Baykar Makina with up to 600m liras (U.S. $105m). Government directive No. 1504 said such incentives will help bolster the company’s financial outlook in the next eight years. Tax benefits are also among the incentives, but not government purchase guarantees.
Baykar Makina’s chief technical official is Selcuk Bayraktar, one of Erdogan’s two sons-in-law. (Source: Defense News)
02 Sep 19. DE&S and British Army launch the Army Warfighting Experiment (AWE) 20 experimentation project. The latest in the AWE series will engage with all suppliers to explore emerging technology in Agile Command, Control and Communication. The Army Warfighting Experiment (AWE) series (previously URBan EXperimentation or URBEX) has been an ongoing Army experimentation programme for the last 10 years. It has consistently delivered high quality evidence for the army and invaluable military feedback to industry. It explores technology suitable for exploitation in the short-to-medium term. It pushes the boundaries of technology and military capability, testing a range of prototype systems by putting them in the hands of the user while giving invaluable military feedback to industry. Agile C3 has been identified as one of the 9 fundamental deductions and insights judged most critical to guide strategic, joint and command force development.
AWE18, code named Autonomous Warrior, saw more than 50 companies from large primes to one-man, garden shed innovators engage with DE&S in a bid to secure an opportunity to showcase their products to the military.
AWE20 is expected to surpass that both in scale and level of industry engagement. The topic provides a broad scope, looking at all aspects of battlefield headquarters from deployable infrastructure, data aggregation and analytics to HQ resilience and decision support.
The project aims to:
- engage with industry technology providers of all sizes to explore what innovative approaches to traditional issues can be leveraged to give the army a competitive edge
- expose capability and knowledge gaps
- explore technology ready for rapid exploitation
- create a community of industry partners that will encourage a collaborative approach to problem solving
AWE20 seeks to answer the following questions:
How can technology:
- improve data exploitation for situational awareness and understanding
- enable us to make faster and better-informed decisions
- reduce the detectability and improve the resilience and agility of HQs at all levels in order to enhance their survivability
- enable more efficient deployment and employment of our HQs on operations
- improve command on the move and facilitate dispersed HQs (Source: U.K. MoD)
16 Sep 19. Capitalising on R&D tax credits in the defence sector. R&D tax credits can offer a funding boost to defence suppliers, but claiming them involves navigating a number of regulatory challenges. William Garvey, MD of innovation funding consultancy Leyton UK, tells us how companies can capitalise on tax credits to offset some of their R&D costs.
During the Conservative leadership battle and the various spending commitments made, the right level of defence spending was once again thrust into the spotlight.
In 2006 when NATO allies set a target to spend of 2% of GDP on defence, they also set a second target to devote 20% of defence spending to research, development and acquisition of equipment. However, despite the evolving nature of global threats, in relative terms, the industry spends far less on R&D than other critical sectors.
Looking at the UK specifically, now representing around 2.1% of GDP, the defence industry is comprised of a small number of large contractors and a substantial secondary tier of smaller, more niche companies. In 2017, the aerospace, defence, security and space sector contributed a £74bn turnover, £41bn of exports, over 380,000 direct jobs and 12,000 apprentices.
In terms of UK research and development, in 2017 R&D for defence purposes accounted for 5% (£1.8bn) of the UK’s total R&D expenditure, rising 2.1% from the previous year. However, business expenditure on R&D performed in the defence sector has fallen by 47.6% since 1990 in constant prices, while R&D in the civil sector grew by 99.9%, according to ONS Figures.
The government’s push for defence R&D
A key contributing factor to this shrinkage is the defence supply chain not taking advantage of the government funding and grants available to them as has been the case in other industries. To address the shortfall, in October 2018, it was confirmed that the Ministry of Defence (MOD) will be allocated an additional £200m during fiscal year 2018/19 and a further £800m for 2019/20. This significant budget increase has the potential to reinvigorate the defence supply chain, allowing new players to surface.
The UK Government documented the importance of innovation in the defence sector through its ‘Advantage through Innovation’ initiative in 2016. This report recognised that constant R&D is required to maintain the UK’s position as one the leading innovators globally. As the nature of the global security landscape constantly evolves, innovation supports the maintenance of the UK’s military advantage in the future.
Pushing technological boundaries is second nature to many defence suppliers, and much of the activity carried out by businesses throughout the supply chain is likely to qualify for government R&D Tax credits.
R&D tax credits: how it works
Developed to boost spending in research and development, R&D tax credits create a pool of resource that can be further invested. While many larger businesses within the defence sector are already claiming, there are undoubtedly more opportunities, and a higher number of claims from smaller suppliers would provide financial support for the future and bolster the sector’s development.
There are a number of stumbling blocks which are preventing defence suppliers from successfully claiming to their maximum potential. These challenges often surround the differentiation between routine and non-routine project elements. According to HMRC guidelines, businesses can claim R&D tax relief, for a proportion of the build cost of an item and salary costs, but not the entire cost.
Many defence projects include a significant level of innovative qualifying activity. Exploring topical innovation in defence more closely, there are several areas of the sector where a proportion of the associated costs could qualify for R&D tax credits.
How the defence sector can benefit from R&D tax credits
SMEs in the defence and security sector often have the freedom to be more agile and dynamic in their innovation, with many job roles directly or indirectly related to the development and testing of cutting-edge software and products.
For many suppliers, the development process involves rigorous design and testing elements, and due to the constantly evolving nature of the sector, high-end R&D can require a considerable amount of trial and error prior to market release.
As weapon and munition effectiveness increases, equipment and transport suppliers are using R&D to mature their product offering to reflect this development and remain competitive. In some cases, this has necessitated the building of facilities dedicated entirely to the durability testing of products, a key area where businesses can claim tax credits for a percentage of employee salaries and running costs.
Electronics in defence is a fast-moving sector, with companies developing new software or products for the MoD as often as every three to six months. Military software and electronics development require substantial experience, intelligence and a highly controlled development process.
The operational environments of electronic military applications are often extremely severe, and as such they require solutions with specific design and extensive testing to ensure faultless operation. The manufacturing and development processes are rigorous, and the time between the development of new products is short, making this a very R&D intensive area.
Defence and security software is subjected to high levels of scrutiny to ensure it is consistently reliable and safe during operation. The R&D in this area is often focussed on testing, as it is vital to continually develop and refine products to meet exacting standards. These products also require hostile environment testing to ensure they are reliable when needed; this can be both costly and time consuming. Software businesses who supply the defence sector spend considerable funds ensuring they reach the required standard on a regular basis.
How to meet evolving MOD requirements
The defence industry is rife with diverse R&D, ranging from research and design to manufacturing, operations and maintenance. Producing new software and equipment for the defence sector is challenging for a number of reasons, including constantly evolving MoD requirements, difficulty predicting the operating environment and balancing durability with ergonomics and weight.
It is clear that capability development and testing activities are key areas of eligibility for R&D tax credits. Challenges surrounding unpredictability in the testing environment and carrying out non-destructive testing on new components are areas which have huge claims potential.
In order to capitalise on the funding available to them, companies should seek to identify which elements of their product and software development qualify as eligible expenditure. A detailed scoping process can identify how much money a business would receive for government funding, grants or tax credits. Due to rigorous qualification criteria, working with a specialist R&D tax relief consultancy is likely to be the best method of maximising the potential of a claim. (Source: army-technology.com)
14 Sep 19. A tale of two future fighters. There’s a tale of two fighters underway in Europe. And countries — and their companies — are choosing sides. The latest news came during the DSEI expo in London. First, on Sept. 10, the Italian and U.K. governments signed a pledge to cooperate on the Tempest next-generation combat aircraft. A day later, BAE Systems and Leonardo formalized a partnership for development. With Leonardo comes Avio Aero and Elettronica, adding to the team of MBDA and Rolls Royce already on board. Likewise, Italy joins Sweden — the first country to sign onto the Tempest team with the U.K. back in July.
So these countries stand in one corner.
In the other corner is Germany, Spain and France — united in development of yet another next-generation fighter for Europe, the Future Combat Air System. (The program is known in France as SCAF, or Systeme de Combat Aérien Futur.) That trio (thus far) brings the industrial expertise of Airbus and Dassault.
Of course, nobody has said officially that this is an either-or scenario; maybe Europe, decades from now, will end up with two systems of systems as they’re each being presented. But when you consider the expense, as well as the messaging coming out of NATO and the European Union about regional security, it would seem unlikely and counterproductive. While dancing around the topic somewhat, chief executive of the European Defence Agency, Jorge Domecq, did predict some level of convergence: “As always, thinking of the competitiveness of the European defense industry, we have to think of program sustainability.”
So then who might win? As one would figure, that depends on whom you ask. A lot of the conversation at DSEI — building upon the enthusiasm at the Farnborough Airshow in 2018 when the new fighter was first unveiled — seemed to favor team Tempest. Some pointed to the fundamental disagreement between Germany and France about the exportability of its envisioned components. (Berlin takes a more restrictive stance than Paris when it comes to potential buyers in the Middle East.) Others claimed that France would be less likely to share control, which in turn might make additional partners reluctant to sign on.
But consider arguments from the other side, many of which emerged at the Paris Air Show in June, where a model of the Franco-German next-generation fighter was unveiled at Dassault’s chalet. The U.K. will soon not be a part of the EU, for one thing. That leaves some uncertainty on how regional cooperation might work, but also over whether the U.K. can pursue such an ambitious program amid political uncertainty. Some point to Italy, too, which has also struggled for political stability. And both countries face budget problems.
Then consider the industrial base for these teams. All countries involved in either program will expect a healthy portion of the work to land in their backyards. How might that work? Is it practical? Perhaps it would borrow from the model of the F-35, where the U.S. funded the bulk of development and partner nations contributed a portion in exchange for subcontracts to manufacture components in their own countries. But really, has that model proved so successful that it should be replicated? Perhaps it’s too soon to say, but it’s certainly brought with it a share of challenges (just consider the state of Turkey’s role, for example). On the other hand, regional cooperation is not new to Europe.
Or maybe this whole exercise — pursuing two systems, lining up manufacturers, recruiting partner nations — should be viewed as something of a downselect process to identify what practically makes the most sense as a region. Or perhaps even this will serve as a test case for how European allies will cooperate post Brexit. Regardless of which platform or platforms are ultimately developed, cooperation between the EU and the U.K. will need to be well-defined. (Source: Defense News Early Bird/Defense News)
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