Sponsored by Exensor
12 Mar 20. Defence Secretary Ben Wallace today announced a rise in the baseline profit rate for single source defence contracts to 8.22 per cent. The new rate for 2020/21 is in line with the recommendation of the Single Source Regulations Office (SSRO). While the underlying profit rate fell from 8.5 per cent for 2019/20 to 8.23 per cent for 2020/21, the three-year rolling average saw a rise of 0.59 per cent from last year’s 7.63 per cent.
ADS Chief Executive Paul Everitt said: “Today’s announcement by the Defence Secretary is welcome news and will support industry as it manages the economic challenges ahead. The profit rate remains low by international standards, but with two consecutive increases in the rate we have now seen an end to the sustained declines of previous years. The UK defence industry delivers world class capability and support to our armed forces. It is important that the profit rate should reflect the importance of sustained investment in innovation and the risks inherent to delivery of the UK’s most significant defence procurement programmes.”
The baseline profit rate is calculated as a three-year average of underlying rates announced annually. It fell from 10.70 per cent in 2014/15 to a low of 6.81 per cent in 2018/19, before rising to 7.63 per cent in 2019/20 and now 8.22 per cent for 2020/21. The UK’s £22bn defence industry plays a vital role in protecting our national security and employs 135,000 people, generating prosperity in communities across the country.
11 Mar 20. Budget provides some support for UK aerospace, defence, space and security sectors. Today the Chancellor Rishi Sunak set out his Budget, announcing measures including an increase in overall R&D investment to £22bn a year by 2024-25 and increasing the rate of R&D Expenditure Credit from 12% to 13%. Government investment in future technology will include investment of £900m to support UK businesses in developing high-potential technologies, including through the National Space Strategy and space innovation fund, and £800m in a new “blue skies” research agency.
For defence, the Budget announced a £1bn facility for UK Export Finance to support overseas buyers of UK defence and security goods and services, as well as additional investment of £100m in Defence R&D, developing capabilities in response to threats facing the UK, including funding for cutting-edge technology in aviation and space propulsion.
In skills funding, there is support for science, technology, engineering and maths (STEM) teaching, including capital investment for up to eight new Institutes of Technology.
ADS Chief Executive Paul Everitt (above) said: “Today’s Budget showed welcome intent from the Government to make a substantial increase in R&D investment that supports our industries in developing and manufacturing advanced new technologies in the UK. We asked the Treasury to boost R&D funding in the space sector and I am pleased to see the Chancellor announce investment in the National Space Strategy and space innovation fund, as well as £100m in defence sector R&D. We look forward to the Government announcing detailed spending plans in July and hope to see long-term commitment to the Aerospace Technology Institute. Joint investment by Government and industry boosts our long-term competitiveness and holds the key to delivering long-term growth in all nations and regions of the UK.” (Source: Google/ADS)
11 Mar 20. Italy’s top two defense firms restrict business travel over coronavirus. Italy’s top two defense companies, Leonardo and Fincantieri, have canceled business trips and switched employees to teleworking where possible, as the country enters four weeks of a lockdown over the spread of the new coronavirus. Italy has become the worst-hit country outside of Asia, with the death toll from the COVID-19 virus reaching 827 on Wednesday, and 12,462 total cases. Reacting to the rise, the Italian government on Tuesday imposed restrictions on travel across the country and urged Italians to stay at home until April 3.
The quarantine is not absolute, since people are allowed to travel for work, medical reasons and emergencies, but they must prove it if stopped by authorities. Many shops and businesses remain open, while most public transport is running.
Shipbuilder Fincantieri told Defense News it has banned all business travel, with “exceptionally” important travel being evaluated by a crisis management team. Working from home was the order of the day if possible; at shipyards, where hands-on work is required, “shifts will be activated as a preferred alternative to the daily schedule,” the company said, with the aim of reducing the simultaneous presence of too many staff at the same time.
Defense group Leonardo said it too had halted all business travel in and outside Italy, barring highly important missions, while plans for teleworking is being set up.
“Where working from home is not possible due to the nature of the job, to maintain business continuity, employees are coming to sites on a flexible basis and all precautionary measures are being taken to provide a safe working environment,” the firm said. (Source: Defense News)
10 Mar 20. Turkey says U.S. offering Patriot missiles if S-400 not operated. The United States has offered to sell Turkey its Patriot missile defence system if Ankara promises not to operate a rival Russian system, Turkish President Tayyip Erdogan said, in what he called a significant softening in Washington’s position.
Two Turkish officials told Reuters that Turkey was evaluating the U.S. offer but that Ankara had not changed its plans for the Russian S-400 systems, which it has said it will start to activate next month.
In Washington, the Pentagon said that U.S. Defence Secretary Mark Esper had not changed his position on the issue, which was: “Turkey is not going to receive a Patriot battery unless it returns the S-400.”
NATO allies Turkey and the United States have been at odds over Ankara’s purchase last year of the S-400s, which Washington says are incompatible with the alliance’s defence systems.
After heavy fighting in northwestern Syria’s Idlib region this year Turkey asked Washington to deploy Patriots along its border with Syria for protection but the United States said Turkey cannot have both the S-400s and the Patriots.
Speaking to reporters on his return flight from Brussels, Erdogan said Ankara had told Washington to deploy Patriot systems to Turkey and that it was ready to purchase the systems from the United States as well.
“We made this offer to the United States on the Patriot: If you are going to give us Patriots, then do it. We can also buy Patriots from you,” he said.
“They also softened significantly on this S-400 issue. They are now at the point of ‘promise us you won’t make the S-400s operational’,” Erdogan added.
Previous talks between Turkey and the United States on the purchase of the Patriots have collapsed over a host of issues, from the S-400s to Ankara’s dissatisfaction with Washington’s terms. Turkey has said it will only agree to an offer if it includes technology transfer and joint production terms.
While ties between Ankara and Washington have been strained, the United States has offered support for its ally as it battles to stop Russia-backed Syrian government advances in Idlib.
But U.S. officials said on Tuesday Ankara had to clarify its position on the S-400s for their security ties to advance.
U.S. special representative for Syria James Jeffrey and U.S. Ambassador to Turkey David Satterfield told reporters on a conference call from Brussels that Washington was discussing with NATO what support it can offer Turkey militarily.
Jeffrey also said they had considered possible responses should Russia and the Syrian government break a ceasefire in Idlib, officials said.
He suggested other NATO states could individually or as an alliance provide military support to help Turkey. But he ruled out sending ground troops and said there still needed to be a resolution to the S-400 issue for the security relationship to move forward.
“You can forget ground troops. Turkey has demonstrated that it and its opposition forces are more than capable of holding ground on their own,” Jeffrey said. “The issue is the situation in the air and it’s what we are looking at,” he said.
Washington did not believe that Russia and Syrian had any interest in a permanent ceasefire in Idlib, he said.
“They are out to get a military victory in Syria and our goal is to make it difficult for them to do that,” Jeffrey said.
“Our goal is…to make them think twice. If they ignore our warnings and preparations and move forward, then we will react as rapidly as possible in consultation with our NATO and European allies on what the package of sanctions and other reactions will be.”
While Erdogan has frequently referred to the S-400 purchase as a “done deal” and said Turkey will not turn back from it, he did not repeat that stance in his comments on Tuesday. Turkish officials, however, said Turkey’s position remained unchanged.
“The United States has once again brought up the Patriot offer. The United States’ previous strong stance isn’t the case anymore. They are approaching Turkey more empathetically now,” a senior official said.
“The core condition is that the S-400s are not activated, or in other words that they are not unboxed. This offer is being evaluated, but there is no change of stance on the S-400s,” the official, speaking on condition of anonymity said.
A separate Turkish official told Reuters the latest offer by Washington also included Turkey’s return to the F-35 stealth fighter jet programme, which Turkey was involved in both as manufacturer of plane parts and customer for the jets.
After Ankara bought the S-400s, Washington suspended its involvement in the programme and threatened sanctions.
“There is a U.S. offer for Patriots, but this offer includes the F-35s,” the Turkish official said, speaking on condition of anonymity. “Air defence systems can be purchased, but Turkey’s conditions are clear: there has to be issues like the know-how transfer and joint production.”
Turkey has said it plans to activate the S-400s it received from Russia in April. The United States has warned that such a move will trigger U.S. sanctions, though Ankara has repeatedly said good ties between Erdogan and U.S. President Donald Trump may be able to avert this. (Source: Reuters)
10 Mar 20. UK MoD leads cross-government review into UK defence industry strategy. UK Defence Minister Jeremy Quin has used a keynote address at King’s College, London, to outline the future of the UK’s defence and security industry strategy to support the sector and improve productivity, providing potential lessons for Australia’s own Defence Industry Capability Plans.
The review will identify how the government can take a more strategic approach to ensure competitive, innovative and world-class defence and security industries. It will also suggest how Defence in particular might better drive investment and prosperity across the UK.
The Ministry of Defence will lead a cross-government team, engaging closely with industry, Parliament and other stakeholders over the course of the review. The findings will feed into the broader integrated review of foreign policy, defence, security and international development that the government is currently conducting.
Defence Secretary Ben Wallace said, “Our relationship with industry is crucial to maintaining the UK’s position as a Tier 1 military power. The review will ensure we are in the best position to support industry whilst guaranteeing the most advanced, world-leading capabilities for our armed forces.”
The review will examine the way industry is being impacted by the pace of technological change, the need for innovation and partnership, and increased competition from abroad, alongside the difficulty of ensuring that we have the necessary skills.
The review will then consider how these challenges are addressed and how the government can maximise potential opportunities.
The defence and security industry employs hundreds of thousands of people, including thousands of apprentices, across the UK. From building warships in Scotland and armoured vehicles in Wales, to manufacturing aircraft in England and satellites in Northern Ireland.
The MOD invested £19.2bn ($37.9bn) into industry, commerce and employment in the last year.
Defence Minister Jeremy Quin added, “The UK defence and security industries play a crucial role in maintaining our global influence and relationships with allies, as well as supporting employment and economic growth across the country.”
UK industries are also at the forefront of technology development in creating new ways to prevent and defend against terrorism and serious organised crime.
On the international stage, UK defence and security companies play a crucial role in maintaining the UK’s global influence, underpinning its strategic partnerships with key allies.
“The review will explore the role of the defence and security sectors in ensuring that we have the right capabilities for safeguarding our national security whilst driving prosperity and innovation across all parts of the United Kingdom,” Minister Quin added.
The analysis undertaken as part of the review will inform findings of the broader Integrated Review of Security, Defence, Development and Foreign Policy, which will be taking place in parallel. (Source: Defence Connect)
Founded in 1987, Exensor Technology is a world leading supplier of Networked Unattended Ground Sensor (UGS) Systems providing tailored sensor solutions to customers all over the world. From our Headquarters in Lund Sweden, our centre of expertise in Network Communications at Communications Research Lab in Kalmar Sweden and our Production site outside of Basingstoke UK, we design, develop and produce latest state of the art rugged UGS solutions at the highest quality to meet the most stringent demands of our customers. Our systems are in operation and used in a wide number of Military as well as Home land Security applications worldwide. The modular nature of the system ensures any external sensor can be integrated, providing the user with a fully meshed “silent” network capable of self-healing. Exensor Technology will continue to lead the field in UGS technology, provide our customers with excellent customer service and a bespoke package able to meet every need. A CNIM Group Company