Alan George/PARIS
EADS has revealed plans for a major expansion of its UK operations with a possible take-over in the defence electronics or telecommunications markets.
Tom Enders, executive vice president of EADS' defence and civil systems division, says the company sees the UK market as "one of, if not the, most attractive in Europe". Enders says EADS could increase its involvement in the UK "across the board", but highlights defence electronics and telecoms as "two areas where the British market could be interesting".
A move in the telecoms field would be via EADS' Defence & Security Networks (EDSN), a joint venture with Nortel formed nine months ago and managed by EADS. Enders will not comment on specific planning, but EADS sources say the first step could be a telecoms take-over or joint venture deal six months to a year from now.
"The new approach we are taking in telecommunications is to take state-of-the-art technology, particularly from Nortel, and apply it to military and paramilitary customers," Enders says.
EADS co-chief executive Rainer Hertrich has already disclosed that the manufacturer is targeting the UK defence electronics sector (Flight International, 27 March-2 April) and Enders confirms that its limited capability in the sector - compared with competitors such as Thales - is seen as a weakness.
Defence electronics is one of four defence and civil systems business units formed during a reorganisation of the division last December (the others being EDSN, missiles and services) and is itself divided into four units: airborne systems; intelligence, surveillance and reconnaissance systems; command, control, communications and intelligence systems; and naval and ground systems.
"In none of these units are we a world force," says Enders. "Clearly we have to do something about it. In all these areas we will take action." This is likely to embrace the USA, he says. "This whole strategy is market-driven, and it's safe to predict that for the next 50 years at least North America will be the single biggest defence market in the world."
Moves to increase EADS's presence in the UK and USA would also be in line with its aim of boosting defence electronics exports. "It's not just that the four main activities are of a comparatively small size," says Enders. "It's also that they depend primarily on the French and German markets. We will need to enhance our international base."
Defence and civil systems' missiles unit will be a key player in expanded European missile house MBDA, comprising Matra BAE Dynamics and the missiles business of Alenia Marconi Systems, the formation of which has been delayed but is now "very imminent" according to Enders.
One delay concerned regulatory approval of the merger, with sources indicating that the partner governments have agreed to invoke Article 296 of the Treaty of Rome, which exempts defence mergers from European Commission scrutiny. Enders confirms that "the next step will be to bring German missile capabilities into the MBDA family".
Source: Flight International