DTN News - SAUDI ARABIA DEFENSE NEWS: BAE Systems Signs Saudi-Eurofighter Deal

DTN News - SAUDI ARABIA DEFENSE NEWS: BAE Systems Signs Saudi-Eurofighter Deal

(NSI News Source Info) TORONTO, Canada - April 4, 2012: British defence contractor BAE Systems said a contract to build 48 Typhoon aircraft in Britain for the Saudi Arabian air force had been signed but changes to the price of the deal had yet to be agreed.

BAE had expected changes to the terms of the deal to be signed off in 2011, but it warned in January this year that talks over proposed adjustments to the final assembly of the last 48 of the 72 Typhoon aircraft would continue into 2012 and could hit 2011 profit.

The proposed changes -- such as the creation of a maintenance facility in Saudi Arabia, the addition of new capability to some aircraft and the formalisation of price changes -- could affect the price of the deal.

The Salam deal to build a total of 72 aircraft was signed in 2007 and is worth around 4.5 billion pounds ($7.21 billion), with the first squadron of 24 already delivered to the Royal Saudi Air Force (RSAF).

"The contract for the final assembly of 48 Typhoon aircraft in the UK has now been signed and final assembly has commenced at our Warton facility, discussions are ongoing with regard to the creation of a maintenance facility in Saudi Arabia and the formalisation of price variations," BAE said in an email sent to Reuters on Tuesday.

"In terms of ... conversion to Tranche 3 and formalisation of price escalation, good progress has been made with budgets approved in December 2011 through the royal decree. Negotiations on price escalation will continue into 2012."

Conversion of the jets to a Tranche 3 variant will see new missile and radar technology added to the Typhoon.

The Saudi royal decree, which was signed off at the end of 2011, releases some 1.5 billion pounds ($2.40 billion) on top of the existing Salam programme commitment for a series of enhancements, BAE said.

Saudi Arabia's Defence Minister Prince Salman bin Abdulaziz is due to meet British Prime Minister David Cameron and Defence Secretary Philip Hammond in London later on Tuesday. Saudi Arabia is a key Arab ally and a major buyer of British-made defence equipment.

Prince Salman is responsible for securing multi-billion dollar arms purchases, which have been used to cement Saudi Arabia's ties with the West. He is also seen as a possible candidate to one day rule the conservative Islamic kingdom.

Earlier this year two Western defence sources said Saudi Arabia, which placed a $29.4 billion order for new Boeing F-15 jets in late 2011, was in the early stage of talks to increase its Typhoon order by as many as 48 aircraft.

Earlier this year BAE said talks with Saudi over changes to its order for 72 Eurofighter Typhoon jets would continue into 2012. The delay hit its earnings last year, which fell 7 percent.

http://defense-technologynews.blogspot.ca/2012/04/dtn-news-saudi-arabia-defense-news-bae.html

DTN News - DEFENSE NEWS: 10 Companies Profiting Most From War

DTN News - DEFENSE NEWS: 10 Companies Profiting Most From War

(NSI News Source Info) TORONTO, Canada - March 7, 2012: Global sales of arms and military services by the 100 largest defense contractors increased in 2010 to $411.1 billion, according to the Stockholm International Peace Research Institute. The increase reflects a decade-long trend of growing military spending. Since 2002, total arms sales among the 100 largest arms manufacturers have increased 60 percent.

The institute recently published its annual report on the leading arms producing companies in the world -- SIPRI Top 100. The report identifies the largest companies in the sector and provides each company’s arms sales as a percentage of its total sales. Based on the report, 24/7 Wall St. identified the 10 companies with the highest revenue from arms sales. These companies alone account for $230 billion -- over half of all arms sales that year.

While many industries continued to suffer in 2010 as a result of the financial crisis, leaders in the arms and military services were largely unaffected. According to SIPRI arms industry expert Susan Jackson, when sales dropped, it was not because of the financial crisis. Instead, Jackson notes that loss in sales was due to “the withdrawal of foreign troops from Iraq and the subsequent expected decrease in related equipment sales.”

The composition of the 10 largest manufacturers reflects the state of modern warfare. More and more, battles are fought remotely through air surveillance and strikes rather than on-the-ground combat. As a consequence, seven of the 10 largest companies are among the leading aerospace companies. Surveillance and battlefield communications also are increasingly important in modern warfare. All of the companies in the top 10 have significant electronics divisions.

Of the 100 companies on the list, 44 are based in the U.S., including Boeing, Northrop Grumman and Lockheed Martin. The American companies account for more than 60 percent of arms sales revenue of the 100 manufacturers. Seven of SIPRI’s top 10 are American, one is British, one is Italian and one is a multinational EU conglomerate. The U.S. federal government has contract deals with all seven American companies. These seven are among the top 10 U.S. federal contractors by amount procured, according to the government’s Federal Procurement Data System.

http://defense-technologynews.blogspot.com/2012/03/dtn-news-defense-news-10-companies.html

DTN News - INDIA DEFENSE NEWS: Ripple Effect From India's Biggest Defense Deal

DTN News - INDIA DEFENSE NEWS: Ripple Effect From India's Biggest Defense Deal

(NSI News Source Info) TORONTO, Canada - March 6, 2012: First it was the United States that got annoyed, and now it is Britain's turn to ask some tough questions about its India policy. Ever since the French Rafale fighter was declared the lowest bidder in the multibillion dollar contract to provide a new generation fighter for the Indian Air Force, a debate has been raging in the United Kingdom as to what went wrong with Prime Minister David Cameron's charm offensive in wooing India.

His visit to India in 2010 was widely viewed as a highly successful. He made all the right noises in India about Pakistan and terrorism, and there was a sense that U.K.-India ties had finally turned a corner. The Cameron government has also decided to give India £1.4 billion between now and 2015, amounting to almost 1 percent of Britain's own £159 billion debt.

But when it came to the much sought-after Medium Multi-Role Combat Aircraft (MMRCA) contract, France was the winner and the Eurofighter, produced by a consortium of four nations, including Britain's BAE systems, lost. Apparently, saying the right things and giving aid doesn't get you any influence in New Delhi!

From the very beginning, this saga has been rather interesting. Last year in April, India rejected bids by Lockheed Martin and Boeing (along with Russian and Swedish bids) for the $10 billion-plus contract for the 126 combat aircraft, despite extensive lobbying by the U.S. military-industrial complex, supported by President Barack Obama himself.

Nothing works better in New Delhi than a putdown to the U.S. — and that was quite a snub indeed! Instead, New Delhi short-listed Dassault Aviation's Rafale and the Eurofighter Consortium's Typhoon. There were extensive field trials, and technical considerations ostensibly drove the final decision. But the dismay in Washington was widespread and, to some extent, understandable given the investment that the U.S. has made in cultivating India in recent years.

The focus then shifted to the French vs. British, Rafale vs. Eurofighter rivalry in which the French came out on top. Dassault Aviation, Rafale's French manufacturer, will be entering into commercial negotiations with India over the next few months before final deals are signed. As this is a company that has been struggling to get foreign buyers, it would be keen on signing the contract more or less on Indian terms.

http://defense-technologynews.blogspot.com/2012/03/dtn-news-india-defense-news-ripple.html

DTN News - DEFENSE NEWS: BAE May Cut Typhoon Price To Win India Order

DTN News - DEFENSE NEWS: BAE May Cut Typhoon Price To Win India Order

 (NSI News Source Info) TORONTO, Canada - February 7, 2012: BAE Systems is considering lowering the price of its Eurofighter Typhoon to win back an $11bn (£7bn) Indian contract from France’s Dassault.

Ian King, BAE’s chief executive, said the company was considering a range of options to secure the deal to supply fighter jets, which could help prevent a major industrial setback for Britain.

A source close to the company said BAE was consulting with its partners in Germany, Italy and Spain to see what was feasible in the coming days and weeks.

India had previously changed its mind on defence contracts, the source said, adding there was “still some way to go” before any decisions by the country had been made.

The insider insisted the contract was still up for grabs, with Dassault’s Rafale only having been named as the lowest-priced compliant bidder rather than being awarded the contract.

The Government’s drive to kickstart growth and rebalance the economy towards advanced manufacturing suffered a blow last month when the Indian government named the French manufacturer as its preferred partner for the deal.

Trade union Unite warned the selection of the Rafale could have "serious implications" for BAE Systems and the UK aerospace industry. It is estimated that 40,000 UK jobs are supported by the project.

Winning the Indian contract would help sustain tens of thousands of jobs, although production is expected to gradually move to India if Britain won the deal.

BAE currently has enough orders for the Typhoon to maintain work until 2017.

The Typhoon is made by Britain's BAE, European giant EADS, and Italy's Finmeccanica. The UK accounts for 37.5pc of production with the aircraft assembled at BAE's aerospace facilities in Lancashire and suppliers including GKN, Ultra Electronics and Rolls-Royce.

Last year, BAE cut 3,000 jobs in the UK, partly because it had won fewer export orders for the Typhoon than planned.

http://defense-technologynews.blogspot.com/2012/02/dtn-news-defense-news-bae-may-cut.html