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THE LIGHTS GO OUT FOR THE BRITISH DEFENCE INDUSTRY

18 Jul 06. Reflecting the dire speech given by Lord Drayson, U.K. Defence Procurement supreme, the lights in the Farnborough Press centre failed as the Minsiter announced his stringent and painful programme to reform the U.K. Defence Industry.

Quite clearly Lord Drayson is a man on a mission and he is going to let nothing get in his way until he achieves what he wants. He also made it quite clear that if Industry does not joining his ‘Club’ then they are going to be left out of the party. He appeared peeved by BAE and VT reluctance to cement the marriage of to develop his Maritime Strategy, he was annoyed at the lack of progress on Armoured vehicles, thus he made no mention of FRRES and ticked off Raytheon Systems Limited for not responding to his missile strategy. A source suggested that whilst MBDA received his proposals two months ago. RSL only received it two weeks ago and thus the document was still with the Company’s lawyers. Not surprising given the 50% drop in orders announced! At least RSL were mentioned by name, he left out any reference to BAE which may reflect his reported spat with Mike Turner on the company’s move to take its Land Systems H.Q. to the USA. Quite clearly two powerful characters, neither of which like backing off!

Drayson announced a new industrial partnership that has been formed to meet the challenges of maintaining within the UK key skills in missile development, an area in which the Defence Industrial Strategy identified declining investment over the next five years. ‘Team CW’ (complex weapons) is led by MBDA and is currently centred around Qinetiq, Thales Air Defence Ltd, Thales Missile Electronics, and Roxel. BATTLESPACE sees this as a tidying up exercise to enable EADS to achieve its stated aim of buying BAE’s MBDA stake.

He also announced the procurement strategy for the Loitering Munition Demonstration and Manufacture programme, potentially worth more than £500m. This
strategy will see a contract awarded single-source to Team CW, subject to the successful conclusion of the programme’s assessment phase. Ultra was awarded a £20m contract. A £500m order on a 50% reduction in business is a nice carrot. However one source suggests that EADS may have to wait until BAE cements the missile requirements for the Saudi Typhoon requirement. Drayson should be wary of upsetting RSL; the company’s AMRAAM missile still remains a key feature of Typhoon and the software upgrade is required to equip the aircraft with the MBDA Meteor missile. Wind River told BATTLESPACE at Farnborough that software changes for closed architecture systems cost $1 per line of code; given the millions of lines of code in Typhoon, this will prove an expensive exercise, as has been proved by the Bowman software upgrade. Surprisingly Drayson did not mention Bowman; sources suggest that GD (UK) has received the £80m required for the next stage and the many millions more the enable ComBat will flow over the next few years. An NAO Report due out next week suggests that the MoD is as much to blame for Bowman price increases as GD (UK). However we understand that the TRW (now Northrop) offering included access to all these upgrades FOC, thus the GD route has proved to be more costly by at least £300m.

Drayson continued, “I congratulate the team in the missile sector for responding positively to the challenge set out in the Defence Industrial Strategy. Team CW will help to maintain the UK’s key skills and technologies in missile development and will also bring business to the companies involved. I aim to sign a Strategic Partnering Agreement by the end of 2006.”

“Team CW will require dramatic changes to the way that industry and the MoD operate. We will make better informed through life decisions and adopt a more incremental approach to technology development. Team CW will be a long term, sustainable partnership, underpinned by binding contracts, to drive high performance and continuous improvement from both MOD and indust

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