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Anglo-French Missile Contract Expected Soon, CEO Says

Mar. 18, 2014 - 03:45AM   |  
By PIERRE TRAN   |   Comments
An illustration of a future anti-surface guided weapon (heavy) being fired from a British AW159 Wildcat helicopter.
An illustration of a future anti-surface guided weapon (heavy) being fired from a British AW159 Wildcat helicopter. (MBDA)
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PARIS — European missile maker MBDA expects to sign a long-awaited contract for an Anglo-French anti-ship missile “in the next few days,” according to CEO Antoine Bouvier, in a program seen by the company as a model for consolidation of the European defense industry.

The development and manufacturing contract for the future anti-surface guided weapon (heavy) will be about €500 million ($695 million), equally split between Britain and France, with some doubt over the number of missiles to be ordered for the French Navy, a British official said. In France, the helicopter-borne missile is known as the anti-navire léger.

With a new joint program agreed upon, MBDA can create 12 cross-channel centers of excellence where British engineers can work on missiles for the French services and vice versa.

The first four sites — Bristol and Stevenage in Britain, Plessis Robinson and Bourges in France — will work on data links, actuator fins, test benches and weapons controllers for the missile.

That transfer of sensitive technology across borders marks a step toward interdependence in 20 years of cooperation between MBDA units in Britain and France, one that could serve as a business model for the rest of Europe, Bouvier said.

For MBDA in France, the 2014-’19 multiyear budget law effectively cuts one year’s spending on defense equipment over the six-year period, Bouvier said. That lower spending has led to a 40 percent cut in domestic missile orders.

France will reduce its orders of naval cruise missiles from 250 to 150, halve the order for the Meteor beyond-visual-range air-to-air weapon, and cut the order for the short-range surface-to-air Mistral from 1,500 to below 1,000.

The company plans to cut 400 staff jobs through redundancy and retirement over this year and 2015, with half due to the lower domestic orders.

As domestic production falls, the company will focus on development of future weapons, with 5 percent of sales spent on research and development. An “ambitious export campaign,” is expected to make up for the cut in domestic spending, Bouvier said.

A deal to coproduce a short-range surface-to-air missile with India, reported by Indian media to be worth €1.8 billion for MBDA, is among the export deals MBDA hopes to sign in the next couple of years.

Qatar also is a potential client for an air defense system based on the vertical-launch Mica and Aster missiles.

Qatar Defense Minister Maj. Gen. Hamad al-Attiyah will be here Wednesday and is due to meet President François Hollande in the evening, the president’s official diary shows.

Bouvier is expected to attend the Doha International Maritime Defence Exhibition & Conference opening March 25 in Qatar.

British and French defense ministers signed a memorandum of understanding on the joint anti-ship missile program at a Jan. 31 bilateral summit at Royal Air Force base Brize Norton in the UK. That signing followed the Lancaster House Treaty reached in 2010, setting out terms of defense cooperation between London and Paris.

But a change of the French government, with the defense white paper and a new multiyear budget, delayed the missile contract.

MBDA’s 2013 sales fell to €2.8 billion from €3 billion in the previous year, split between 65 percent for domestic and 35 percent for exports, said group finance control and accounting director Frank Le Rebeller.

The sales target will be evenly split between domestic and foreign contracts by 2020.

Orders totaled €4 billion for MBDA, with €1.8 billion from domestic and €2.2 billion from foreign clients. In the export market, the Asia-Pacific and Middle East were the two most active regions. In 2012, export orders were worth €1.5 billion.

MBDA is owned by Airbus Group and BAE Systems, each with 37.5 percent stakes, and Italy’s Finmeccanica group with 25 percent. ■


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