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French-US Venture High Hopes for Radar Prospects

May. 3, 2013 - 05:30PM   |  
By PIERRE TRAN   |   Comments
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PARIS — ThalesRaytheonSystems (TRS) expects sales of digital Ground Master (GM) air defense radars to France to slow, but the French-American joint venture is bullish on prospects elsewhere in Europe and in North Africa, the Middle East and South America, CEO Jack Harrington said.

Sales “may be a little slower,” but France has a large number of old radars that need to be replaced, and the authorities must address the need as the budget allows, Harrington said.

France is clearly a key country customer, as Thales is the French joint venture partner and has invested heavily in the GM detection system.

On Feb. 6, the Direction Générale de l’Armement procurement office purchased a GM 406 radar for the Lyon-Mont Verdun airbase, which followed a Sept. 7 order for a similar unit for the Nice Mont Agel base. France’s first order for the GM 406 was for the Kourou rocket launchpad in French Guiana.

The French forces will plug the new GM radars into the National Air Command and Control System and also into the NATO Air Command and Control System.

TRS is important as it is one of the few if not the only French-American joint venture exclusively in defense, said François Lureau of EuroFLConsulting and France’s former defense procurement chief. Lureau also sat on the TRS board of directors when he was a senior Thales executive.

Regional tension around Syria, Iran and North Korea can only help TRS’ sales prospects as concerns rise.

NATO, drawing on American, German and Dutch forces, sent six Patriot Advanced Capability-3 (PAC-3) batteries to Turkey to protect the member state against potential Scud missile strikes from neighboring Syria. The PAC-3 missiles are plugged into the NATO command and control (C2) system.

The dispatch of the US-built weapon system annoyed European executives, who said the MBDA Aster missile could also have been deployed along the Turkish border.

The Asia-Pacific region is seen as an area for active prospects. NATO also is a potential buyer of the GM, Harrington said.

In North Africa, TRS has sold three radars to Morocco, which is renewing its air control facilities, and there is potential for further sales of 12, 15 or 18 units, a defense expert said.

In South America, TRS has sold four radars to Chile and has a local subsidiary through which it handles technology transfer to build units for the regional market, the expert said.

In the Middle East, the Saudi National Guard has bought 68 multipurpose combat vehicles, which are fitted with the GM 60 radar and armed with MBDA Mistral 2 missiles. The French privately owned Lohr group is prime contractor for the vehicles.

Qatar, meanwhile, is looking to build a missile defense system, and MBDA hopes to sell its Aster weapon, which would be linked to Thales radars, to provide a lower level interception, the expert said.

TRS has sold 34 GM units to nine countries, and the outlook is solid growth in single digits as operators upgrade their radar parks, Harrington said.

“Strong relationships with the US and Europe on a government-to-government basis” are key to those export contracts, he said.

On the United Arab Emirates’ pick of rival Lockheed Martin for an integrated C2 system, dubbed air defense ground environment-tactical, “Until a contract is signed, it is premature to comment, and as far as we are aware, there has been no contract signature,” Harrington said.

However, it is clear that as long as a contract has not been signed, TRS will look for an opening to step in and bid for the UAE deal, and even after a signing, the joint venture will be vigilant for another chance.

TRS continues to beat internal sales targets on its radar business despite an increasingly tough global market. The original business plan for the GM was conservative, Harrington said. “We have overachieved,” he said.

TRS also is supplier for the NATO Air Command and Control System , a massive software project designed to link member states’ national air defense networks to give a common operational picture. The NATO contract is estimated to be worth around €1.48 billion ($1.9 billion).

Belgium, France, Germany and Italy are conducting site-specific testing of ACCS in each nation, after performance tests ran successfully in Belgium at the NATO system test and validation facility. Harrington expects the system to be declared operational “very, very soon.”

The test program, “validated the most critical and demanding system requirements,” TRS wrote in an email. ■

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