Christina Mackenzie / Paris
Meteor approval by Germany could make or break Europe's combined missile house, MBDA, six months after its formation
When MBDA Missile Systems was born last year, chief executive Fabrice Brégier denied it was just a European missile producer. "We are much more," he declared. "This is the foundation of a company which offers global solutions in missile systems via innovation, the use of the latest in technology and through strategic partnerships." He added: "As the prime contractor of several of the most advanced programmes in the world, and with a strong technological basis, our objective is to take the leadership on the missile and missile systems market."
Six months on, how far has MBDA gone towards meeting this objective? Defence analyst Alexandra Ashbourne of London-based Ashbourne Beaver Associates says: "They're on the right track, their leadership is well respected, but their credibility lies in the hands of the German budget committee."
The company officially came into being on 18 December in Paris after a 26 month, gestation when Brégier signed documents turning the group into a legal company, 37.5% each held by BAE Systems and EADS, and 25% by Finmeccanica.
With a turnover of €2 billion ($1.89 billion) and an orderbook worth €13 billion, MBDA is the world's second largest missile company, employing nearly 10,000 people at 12 principal sites in Europe and the USA.
The group is in the final stages of acquiring from EADS the 70% it does not already hold in German missile builder LFK. The deal should be finalised by year-end, completing the major consolidation among Europe's missile firms. In 1995 there were 10 such companies: now only three remain outside MBDA - Sweden's Saab Bofors Dynamics, France's Thales and Germany's BGT.
Approval of the Meteor air-to-air missile programme is critical to MDBA's plans, but the German defence ministry missed the deadline for submitting the final spending template and industry contract for review. This prevented the budget committee voting on the programme until after parliamentary elections due later this year.
"Meteor will make or break them," Ashbourne says, because if the missile programme is not completed on time and on budget "this jeopardises a number of other major European defence programmes, notably the Eurofighter." Brussels-based defence industry analyst Ilana Bet-El also believes "MBDA cannot carry on waiting for Meteor to happen and will find it very difficult to survive if they do not have this major programme for the future".
Brégier is confident that "Germany will keep its promise". He "cannot imagine Germany would not make this commitment". After all, he argues, the Meteor's development cost is around €200 million, a tiny amount, he says, compared to the cost of the other joint programme the German budget committee delayed, the Airbus Military tactical A400M transport.
The beyond-visual-range Meteor is designed as the principal air-to-air weapon for Europe's latest generation of combat aircraft: the Dassault Rafale, Eurofighter Typhoon and Saab/BAE Gripen. When Meteor won the UK Royal Air Force's beyond-visual-range air-to-air missile (BVRAAM) competition in May 2000, Brégier said: "This strategic decision will profoundly modify the international missiles market as our immediate perspective is to equip more than 1,000 combat aircraft, a potential market of more than Fr50 billion [€7.6 billion]."
He added that "this decision marks a historic turning point in the establishment of an unequalled European capacity in the defence sector…for the first time, Europe will equip its combat aircraft with a single European air-to-air missile, ensuring the interoperability of its forces and its independence on the export market".
Boeing is the US partner in this project. MBDA hopes the company's involvement will open doors to the US military market and to other operators of Boeing fighters worldwide. "Our contacts with Boeing and Lockheed Martin have changed since MBDA was announced," Brégier says, adding: "Now we can bring something else than when we were separate companies."
MBDA's two other major development programmes are the Storm Shadow/Scalp EG stand-off missile and the Aster family of surface-to-air missiles. The company's business plan to 2006 for European programmes estimates cumulative four-year sales of €3 billion for Storm Shadow and €3.5 billion for the Aster family.
Storm Shadow is a conventionally armed cruise missile designed to attack high-value targets, such as command and control facilities, missile sites, airfields, ports, ammunition and fuel storage sites and bridges, while avoiding collateral damage. The difference between the two variants lies in its use. Storm Shadow is carried on the RAF's BAE Harrier GR7s and Panavia Tornado GR4s and will arm Eurofighter, while Scalp EG is carried on the Dassault Mirage 2000D, Mirage 2000-5 and Rafale.
Aster is manufactured in co-operation with Thales and managed by Eurosam, a "not-quite-joint-venture" between the two groups. The missile has three principal missions. Two are for navies: the surface-to-air anti-missile (SAAM), which has entered service aboard the French aircraft carrier Charles de Gaulle; and the principal anti-air missile system (PAAMS), providing anti-air protection for future warships. The third, the land-based SAMP/T, is designed to protect ground sites and battle groups on the move from 2005.
MBDA co-chief operating officer Mario di Donato says the group's future strategy is to consolidate and finish merging the companies. "We need time to reorganise internally," he says. "Our shareholders are waiting for synergies so we have to plan our research and development, for example, to avoid duplication, but in such a way as to create cross-fertilisation."
For now the company is still organised around three national operating companies in France, Italy and the UK, which opened for business on 1 January. Each has its own managing director: Pierre Dubois for France, who is also the programme director for the Storm Shadow family of missiles; Sandro Pazzini for Italy, programme director for the Aster family of missiles; and Guy Griffiths for the UK, who is also the Meteor programme director. The three report to the group's co-chief operating officer (operations), Alan Garwood.
Garwood's other half is Donato, chief operating officer (technical), who oversees the technical, engineering and operations, seeker, procurement, and strategy and planning divisions.
For the immediate future, Donato's task is to push forward the reorganisation plan adopted in April "based on centres of excellence and on balancing national requirements with corporate ones". He says the group must avoid making the same industrial errors made in the Tornado programme "in trying to maintain workshares". He adds: "We must propose something reasonable for long-term workshare in both quality and quantity. We can work with different locations, but there must be a single mind able to distribute the competences." One of the first areas to be reorganised will be procurement, which is going to be centralised.
Donato says MBDA "should hit cruising speed this year", when the first benefits of reorganisation make themselves felt. He says: "One of the most important synergies is to manage co-operative programmes, such as Storm Shadow/Apache, Aster and Meteor with a single voice."
One reorganisation measure was taken in June when Gianni Bongianni, director of the seeker division based in Fusaro near Naples, and Gérard Christmann, Thales Airborne Systems' missile electronics general manager, signed an agreement that both companies would produce the radar seekers for Aster, Meteor and Mica, and jointly develop all upgrades and modifications. The companies were already collaborating on the Mica and Aster seekers, but the new deal extends the partnership to cover Meteor "to minimise technical risk in development" of the missile.
Medium-term, Brégier says, there must be more consolidation in the European missile industry. He is referring to German missile house BGT, which has yet to join the MBDA fold. "It makes sense to join our efforts in the German market," he says. Bet-El agrees. "European industry has consolidated and will continue to do so," she says, "but it is still working to national markets. The way the market is going, medium or small players are going to be squeezed out by the multinationals. There's no middle ground."
Source: Flight International