Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Production increase delays hurt Airbus costs December 2, 2024
- Books to consider for Christmas November 29, 2024
- Slow, methodical process to restore Boeing’s trust, efficiencies November 28, 2024
- Engineering, Innovation is our DNA: Embraer November 25, 2024
- No changes to US labor Scope Clauses for indefinite future, says Embraer November 22, 2024
BAE Systems is growth opportunity for EADS
Update, Sept. 13: Here are some stories from today:
Bloomberg: EADS move seen by Boeing as growth; Revives decade-old plan; and this update about the rankings:
BAE is the ninth biggest vendor to the U.S. government, with $7.3 billion in direct, or prime, contracts in the year that ended Sept. 30, according to a Bloomberg Government study ranking the top 200 contractors. EADS ranks No. 100, with $684 million in awards.
Reuters: US approval seen likely.
AOL: Big deal in Europe, not so much US.
Mobile (AL) Press-Register: EADS-BAE in merger talks, with a spin on local impact.
Original Post:
The prospective combination of BAE Systems and EADS is a growth opportunity for EADS, particularly in the US, where it has been striving for years to expand its defense footprint.
BAE Systems in 2009 was the Defense Department’s #5 of the Top 10 defense contractors. At that time 50% of BAE’s business was in the US. We have checked more recent figures. EADS North America, during the KC-X tanker competition, did about $1bn worth of business with the US government, in defense, Homeland Security and other contracts. We don’t believe this has appreciably changed in the 18 months since the tanker contract was awarded to Boeing.
Although the immediate reaction among observers and media is that the combination will make a strong competitor to Boeing, in fact BAE Systems services defense segments that are more closely aligned with Lockheed Martin and Northrop Grumman than with Boeing. There is also little if any overlap between BAE and EADS, whether here or in Europe and the UK, where BAE is headquartered.
BAE has about 40,000 employees in the US.
The combination, which has to be approved by the boards of both companies as well as a host of governments on both sides of the Atlantic, will certainly strengthen EADS and its argument that it is a substantial contributor to the US economy and US employment. Airbus, a wholly owned subsidiary that accounts for around 80% of EADS revenues, purchases $12bn in goods and services in the US and says it employs or supports 100,000 jobs directly or indirectly.
BAE, which owned 20% of Airbus until EADS bought these shares in 2006, isn’t a current supplier to Airbus. Although defense cuts in Europe and the US are limiting growth at this time, these come in cycles and BAE would strategically position EADS to grow its defense business and reduce reliance on Airbus revenues and financial performance.
The new company will be 40% owned by BAE shareholders and 60% owned by EADS shareholders. The current shareholdings in EADS of the German and French governments, presently 15% each, would almost certainly be diluted. (The German EADS shareholdings are currently indirect but may become direct. The French shareholdings are direct.)
The new company would be listed on several European exchanges, including BAE’s listing on the UK stock market.
BAE once owned a part of Airbus, now Airbus (EADS) will own most of BAE? All this just to get a piece of the US Defense Budget? I guess EADS is not satisfied with selling high quality military products to its EU customers and owners, like the A-330MRTT (which just dropped another Boom the other day), and that world class airlifter doing military and humanitarian missions around the world, the A-400M…..oh wait….
While European governments ownership will be diluted, they will still have control over the company. I’m not sure that the US government would be too keen on that for what would become the #3 or so contractor to the US government to be controled by foreign powers, even if they are nominally “allies”. There will be a great deal of convincing of government regulators as well as financial regulators to be done.
I think Albaugh may prove to have better strategic perspective than McNerney.
http://www.telegraph.co.uk/finance/2805464/Boeing-says-it-has-no-plans-to-buy-UK-firms.html
A bad move if they want to sell more in America, BAE will sell less in america. Northrop and Lockheed Martin and Boeing are all private defence contractors, EADS is not, that will be a hard sell in America.
Second reason why its a bad move, America has started it defence budget cuts.
Third reason, the new focus for american military is in the pacific region, the relations to Europe will dwindle after the afghan war is ended, UK and US seem to go separate ways more and more. Without Obama in the White House the europeans will not be as forgiving towards Washington either, the republicans seem even less interested in Europe now than Bush and his gang was.
A bad timing indeed, I hope Saab of Sweden will survive, having a monopoly in this area is not good, I dont trust the french or the germans who will dominate defence on this continent. EU is turning ever closer to the new Soviet union, with Barosso yesterday talkning about a federation.. Scary times for small nations! One airplane plant, one defence plant, one budget..
What is in it for BAE? The EADS case I see, but why should BAE align itself with such a bad name in america, where it has been doing quite well?
Partly the percentage of the combined company. The deal would relatively overvalue BAE and undervalue EADS.
I think there may be some desperation on both sides. EADS isn’t going anywhere in the defense sector. BAE is dependent on selling tanks and the Eurofighter Typhoon, neither of which are great sales propositions at the moment.
From what I read, BAE would probably have to divest some of its more sensitive US functions if the deal went ahead. It would go from a well favored company to a normally favored one. It looks like BAE would retain a separate identity within the combined EADS – perhaps to address this concern.
The release talks about equal “golden shares” for the French, German and UK governments. I think this implies the company wants governments to divest themselves of any direct shareholding. National ownership issues might sink the deal. In Europe the Germans are particularly sticky on this.
In the last few years we’ve seen the Germans prefer privatization, but not without equal sell-down by the French. The French government are not interested in giving up any golden share ownership as they still practice their decades old economic nationalism owning shares in all kinds of industrial producers, transportation, etc. so the German government must stand fast.
Just discovered that BAE is joint owner of Air Astana, the Kazakhstani airline. This was part of a deal that BAE struck with Kazakhstan’s tinpot dictator, Nursultan Nazarbayev, for a radar contract that never actually went ahead.
A big aerospace / defense industry, playing a big role in national defense, the state is doing gov- gov deals, finances R&D, politicians using polical power with dependent states..
It seems to me folks around here are afraid of processes that are going on for decades, smell don’t do as we do.. free market is fine as long as it helps us.. the famous double standards..
EU will actually lose by doing this, sell even less defence in US now, lets hope Asia is ready to buy. Inside your beloved EU less competition is good? EADS/Airbus has killed or destroyed a very diverse aerospace market that existed before the 1980s.
Interesting tidbit: Mr. Loren B. Thompson seems to be advisor to BAE.
We’ll see how long that lasts after the combination…..or whether he changes his tune about EADS/Airbus….
I think EADS is coming to the realization that the F-35 is and will be the only game in town (the plausible failure and recompete of India’s MMRCA notwithstanding) for advanced western fighters until at least the 2030s; BAE is the only European company with a substantial workshare on F-35. Nevertheless, I think US regulators will compel BAE to divest itself of its US operations (United Defense and Lockheed Systems) if the merger is to be allowed.
I think we should remember the US companies are the biggest US exporters. US imports are reltively small. So if congress goes flagwaving / fear monering (again) guess what hit more export or import.. The world has witnesses the tanker drama and only a few folks in the states seem to believe it wasn’t blunt (if you can’t win change the rules) protectionism..
Because booms randomly and repeatedly detaching from an entrants tanker design makes for a competitive and compelling bid…
Are the US, France, Germany or any nation required to match import levels with exports? Should they be matched monetarily, per capita, by quantity, geographic size?
Then the tanker competition wasn’t lost by EADS because the rules were changed. They won the first round because the rules were changed! Certainly, the drama centered on that, where EADS was given extra credit for a bigger aircraft whilst the RFP stated none would be given. And even after the Congressional GAO ruling Europeans had the audacity to call them “protectionists.” Nothing is better than believing homeland propaganda anywhere.
Now in a twist of hypocrisy, witness the A400M Atlas built without open bids for the sole purpose of protecting and enhancing European aerospace and export revenue. Not even the builder’s preferred engines where allowed to compete. Protectionism at its best.
This is why political influence should be kept to a minimum, EADS had settled on the PW engines and politicians forced the engine to be european, I have low hopes that adding EADS name to BAE will help getting contratcs with congress and Pentagon.
Most late and over budget projects have had a lot of input from people who should have no influence. Adding too much crap on a design that would have worked fine.
The local US view may not be all that representative:
http://www.sipri.org/research/armaments/production/Top100
#2 in 2010 sipri places BAE as #1 in 2012:
http://www.welt.de/politik/deutschland/article7150594/Das-sind-die-groessten-Ruestungslieferanten-der-Welt.html
Thanks for linking to an article written in a language spoken by 1% of the world.
Go to translate.google.com and paste it in there. You’ll get a reasonable translation of this German.
Thanks! But this jewel of a translation gets vomited out:
“According to the information-Sipri massive march of the British BAE Group on the sale of half of its products in the U.S. is based recycled”
Keine Ursache. Gern geschehen! 😉
Though I have to note that you are making a strong presentation about perceptions and understanding. ( But probably not quite the statement you intended to make. )
Can you summarize the point you were trying to make?
“Something something Americans…something something uncultured and don’t know any languages something something further stereotypes”
Though to be fair, Marauder, you are doing your best to reinforce their perceptions. I demand English now!
My favorite language to put into google is Malay. It never comes back making any kind of sense whatsoever.
Think about what all of us other europeans have to live with, soon we probably all have to speak german or french. Nothing good will ever come out of less competition in EU, however most seem like they cheer this, lets all pay more for future defence tech!
I hope EU collapses along with its banks and absurd dictatorship politicians.
What did you select “bavarian to english” or “gernan to redneck” ;-?
You’ve carefully selected the sentence with the worst translation outcome.
The remainder reads significantly less cryptic.
A bit of effort on your part …
I’m interested in your point but I suspect your gernan is better than your english 🙂
ROFL.
May I ask how many languages do you speak? 😉
The 2006 disposal of it’s holding in EADS explained at the time as allowing it to focus on the US was complete bollocks, it was seen by many as a bad move at the time & is now long regretted at BAE.
BAE Systems in all it’s guises has an horrendous history of program cost over-runs, whilst this is the nature of the beast many of these can be explained away by the usual procurement processes, many however can be attributed to BAE miss management.
This marriage when consummated will see the defence synergies taking a priority as one European sourcing union, the commercial aeronautical business element won’t change by any large degree.
No mistake the master here will be EADS so there’s good reason for many to be concerned, as when the inevitable cull comes it will be sharp & deep
In 2011/2012 BAE is the global #1 in defense sales.
Risen from #2 in 2010. ( src: SIPRI institute, my links to )
Limiting your view to the US local market to fathom if
a merger makes sense or not is myopic.
Thanks for clarifying! But those are lagging indicators; BAE has lost virtually every competition it has contested recently and as phil pointed out, has demonstrated nothing but poor execution in the major contracts it has won. The future looks equally bleak…
So that could be the reason for Leahy getting promotion into EADS sales territory?
One Germanic Language: English (the language of aviation, science and technology)
One Romance Language: Spanish
I’m reasonably proficient with written Latin.
And more programming languages than I care to mention….
Russian and German would hand you a similar amount of science & technology.
( leaning towards foundational theoretics )
My latin proficiency is mostly down the drain, though the vocabulary still is my key
to the major euro languages. ( my youngest son started latin last year so I get a refresher these days ).
Please wake me up when Germany and or Russia land a one ton, nuclear powered robot on Mars…
Germany was the place to go for American scientists, like Oppenheimer for example, until the Nazis took power in 1933. Göttingen was the Mecca of science at that time.
The exodus that ensued made great American universities even greater.
“English (the language of aviation, science and technology)”
In case you don’t know, German was the language of science and scholarship up until the 1930s.
It’s really not my fault that Germany elected to declare war on a country with a large heavy bomber force.
Hmm, that Austrian corporal didn’t declare war on the US until December 11, 1941, perhaps his greatest mistake.
However, I was principally referring to the enormous “brain drain” in Germany and Austria that was caused by the rise of National Socialism.
I don’t quite follow…but it’s encouraging to see that a Philosophy/Communications major like Leahy has done so well in such a technical field.
Maybe it’s Leahy’s arm twisting ability combined with [edited] that got him his raise. The third world still requires it to close a deal. It’s old-school, but Europeans still practice.
With the way things are going in the F-35 programme perhaps BAE is starting to realise that the highly compromised fighter-bomber will not be affordable for not only the UK, but for many partner nations as well.
In fact, BAE/EADS should be well positioned – perhaps with the inclusion of Dassault¨and Saab – to start developing a 6th-gen fighter having new levels of speed and agility, more range and new features like self-healing structures and multi-spectral stealth. Such a programme could be developed as a true “joint strike fighter”, but with the major difference to the F-35 being Airbus-type system and engine commonality across several platforms, and not just one F-35-type platfom catering to too many different demands, which BTW, has IMO made the F-35 turn into an inferior air dominance platform. For example, you could have 4 different platforms; a twin-engined F-22/Eurofighter/Rafale-like top of the line fighter aircraft including a “M” version that’s carrier capable; a single engine fighter smaller than the F-35 with internal weapons bays designed to hold BVRAAMs only, and not ATGMs requiring significantly more voluminous internal weapons bays, a single engine high wing X-32-like STOVL version and finally; an unpiloted single engine version designed to carry ATGMS only.
It’s hardly encouraging when three out of the four Eurofighter consortium members are buying the F-35. The F-35, for all of the problems you highlight is moving relentlessly forward; it’s as much as jobs program as anything else…
Europe doesn’t even have a plan-of-record for modern UAVs (aside from some technology demonstrators) and you want them to pursue some nebulous 6th generation fighter type?
Shouldn’t Europe finish developing their current 4++ Gen fighters before they leap into the 6th generation fray?
So, another British company will disappear. Once Europe had many manufacturers, many products and a lot of creativity. The mergers killed it all. It is bad for the job market, it is bad for the tax payer (the governments are in the “hand” of big corporations that are always sucking money (see Eurofighter, A400M, JSF, F22 and others). Soon we will have the Umbrella corporation.
To have numbers of how all this is bad for aerospace, read my article on the SR-71 (http://www.engineerstoolkit.net/the-fastestest-ever-aircraft/) and see development times.
Sadly we are about 2 people on this blog having this opinion. It should be a rule that less competition is BAD not GOOD. It was sad when McD and Boeing merged as well, didnt help competition either. Maybe capitalism turns into marxism in the end, the one with the biggest wallet will buy everyone else and there can only be one..Even Soviet had 2 or more manufactorers..
It was a huge blunder but it’s clear that Hitler had the support of the vast majority of Germans. As far as I can tell, unlike in Imperial Japan and Admiral Yamamoto, there were no major dissenting voices which is strange considering the amount of technical collaboration between German and US aerospace firms during the interwar years…
Can we stop this? God, as if every other comment page on the entire internet didn’t already devolve into a discussion about world war two, we have to do it here as well.
I tried to bring the topic back to aviation and it demonstrates that then as now, aerospace development transcends national boundaries often with unpredictable results; a BAE/EADS merger will certainly follow in that tradition
BCA finally solidifies Air China’s 747-8I order, avoiding the shutout on the year
http://active.boeing.com/commercial/orders/index.cfm
English is the *official* language of aviation; if at some point German, Farsi or Klingon becomes the new official language I’ll happily become conversant.
Of course, though the rise of the mighty Persian empire may take another few generations…
english? for international air traffic?
certainly.
For anything else pertaining to technology, manufacturing or research ?
most certainly not.
But your stance is self amplifying. You don’t read/notice anything not written
in english. So there is nothing relevant elsewhere. How completely wrong.
It explains why so often Americans think anything of value was invented at home
and others can only have it later and surely must have copied US IP.
Or this could be why we think that:
http://www.scienceprogress.org/wp-content/uploads/2011/07/RnD_table1.gif
No one has a monopoly on good ideas. I do pay very close attention to foreign developments in military aerospace but Europe (excluding Russia) just isn’t doing much that’s particularly interesting or novel at the moment or for the foreseeable future.
Then, we can wonder why the most of in the EU Parliament speak English. The city of Babel, way back when, was suppose to be really nice!
True, the exorbitantly expensive F-35 programme has turned into nothing but a jobs program. However, while the Military, Industrial and Congressional complex may still save the day for Lockheed Martin, I’m not sure that the draining coffers of HM Treasury and the Italian Treasury will be able to pay for a primarily US-based jobs programme (Note: Only these two Eurofighter member nations are “partner nations” on the F-35).
As for the 5th-gen fighters; IMO the US versions are seemingly all smoke and mirrors. It looks like the F-22 may be our-era’s equivalent of the F-104 “flying coffin”, while the F-35 will be little more than a ridiculously expensive bomb truck. ,-)
The Eurocanards were all designed in the 1980s and should carry the OEMs through well into the next decade. For example, it looks like the Eurocanards are more than competitive in countries where US government pressure is less effective.
Although no single European nation jumped onto the first and second generation stealth bandwagon, I see no reason that BAE/EADS et al. can’t skip two US-led somewhat premature generations of stealth technology, and go directly to the third generation.
My previous comment was a reply to Marauder. 🙂
Although no single European nation jumped onto the first and second generation stealth bandwagon, …
http://www.rp-one.net/lampyridae/lampy.html
quite amusing. Mostly lack of want than lack of capability.
UWE I must ask, why is less competition good for EU?
Yeah, because the tail “angled” at 90 degrees is a staple of VLO design. Even you need a US RCS range to evaluate your VLO design you clearly don’t have much capability in that regard.
Well, maybe “lack of need,” as preparations are more for tactical ops than strategic. They know who comes to aid in a strategic response.
Modern fighter development is exorbitantly expensive, full stop. The only modern fighter design to roughly adhere to its budget is the Super Hornet and that’s only because the development of its avionics (in particular the AESA radar) was funded separately.
As you point out, the Eurocanards are 80’s era designs and not survivable in modern threat environments but I’m sure EADS can pawn the Tranche III Eurofighters that none of the partners wants on wealthy Gulf states who like shiny toys + kickbacks and aren’t allowed by the Israel lobby to acquire the F-35.
Meanwhile, France’s impossibly low-ball Rafale bid in India is unraveling now that it is under some real scrutiny. Meanwhile, Rafale-N pilots are busy dumping their jets in the ocean during exercises with USN Super Hornets.
Oh and, after getting slaughtered by Switzerland’s *legacy* Hornets during the Swiss AF evaluations, Saab is going back to the drawing board to bring the Gripen up to the standard of the decade old F-16 Block 60.
Europe has barely fielded an AESA that’s on par with the 12 year old AN/APG-80 and you expect them to leapfrog the US by two generations? I wish them the best of luck!
IMHO you are too much bound to the concept that how the US does something is the only path to success.
( Lampyridiae was a ~$20m project that shew at the time better RCS and aerodynamics than the $xxb project HaveBlue/B117.)
Marauder, aren’t you getting caught up in a silly “mine’s better than yours” game? Also, you don’t seem to be up to date on AESA developments on the Eurocanards.
http://www.microwavejournal.com/articles/17992
May I add that I was talking about 6th-gen primarily in reference to airframe and engine, and not radar technology. However, it wouldn’t hurt to design larger nose cones as they would be a perfect fit for even larger AESA radars….. 😉
Small companies “competing” against each other while another BIG company
takes the majority of orders is worthless. Only $BigCorp will be fan of that situation.
All the “innovative and competitive” activities in european aerospace were only churn
and about license building US designs.
Now Introduce some cooperative synergy and you get Airbus.
Airbus strength was the distinct and specific capabilities of its facets, those wonderfully competing companies .
IMO this merger will cost jobs and slow innovation, EADS is way behind the 3 giants across the pond, they will go for eachothers throats as spending gets cut, EADS has very little to offer that these 3 cant. Asia would be the only place to sell really, but India seems to like Boeing and China likes their own toys.
Military spending will shrink in US and EU, lets all hope for an arms race in asia then..
Money spent is not everything. How much do you get for your money?
How much is the 787 as a development project worth and how much
was just thrown away. Or evaulate V-22, F22, F35 under the same metrics.
Actually similar to foreign aid moneys.
For Afghanistan the US stands at the top but if you look into details most of it
went into weapons that the Afghans need about as urgent as another strain of lice.
I think we get quite a bit for our money. Money isn’t everything but it’s vital because it funds the persistence and continuity required to achieve real technological innovation. A lot gets thrown away because failure and setback are the dominant themes of R&D.
I can show you dozens of university research projects that have better RCS and aerodynamics than any aircraft flying today or in (at least in the open literature) development. That doesn’t mean such projects are viable designs for production or the least bit operationally suitable or effective.
We’re pretty tolerant about comments, but let’s drop the WW II stuff. Totally irrelevant.
I’m quite up to date on European AESA developments. Thales readily acknowledges that it is well behind (a direct quote: “we are number 3!”) Raytheon and Northrop Grumman in this field. The T/R modules used the RBE2 and Captor-E are at least a generation behind those used in US AESAs. These are essentially boutique sets; Europe simply hasn’t made the investments in MMIC fabrication and mass production required to be competitive.
What you seem to have missed, is that since the late 1990s the main driving force behind MMIC developments has been civilian, and not military.
The main force behind the current US generation of MMIC’s (GaN) is DARPA; there are precious few applications outside of military radars that require the power density, thermal breakdown properties and high voltages provided by GaN.
Since you are quoting from Air Power Australia, I suggest you read their scathing analysis of the Eurocanards, particularly their gloomy view of the survivability of these aircraft in the face of modern and emerging threat environments.
Europe isn’t (publicly) demonstrating or even exploring the types of planforms that would be used by a notional 6th Gen fighter. Engines are the key enabler for 6th gen fighters but there’s no plan of record for advanced fighter engine development in Europe; Gripen NG is using a GE 414 variant. Eurojet lost out to GE in India while Snecma’s M88s are pretty long in the tooth at this point. Rolls-Royce’s teststand failures on the F136 doomed that engine to cancellation.
6th Gen fighters are almost certainly going to move away from centralized radars in the nose to distributed apertures with T/R elements embedded directly in the weave of the composite material matrix; I’m less familiar with what Europe is doing in this regard but the US has vast experience in this area with the B-2, F-22 and F-35 and the Integrated Composite Deckhouse and Apertures for the forthcoming Zumwalt class destroyer.
You seem to miss the point that the US is stuck with the F-35 until mid-century. USAF can talk about 6th gen as much as they like, but if they insist on sticking with the JSF, I’m afraid the train has left the station on 6th gen for at least another 30 years. The F-35 is doing a good job helping to bleed the federal budget coffers dry. Simply put; a 6th gen fighter aircraft will simply be unaffordable for the US if the F-35 programme is not curtailed. Also, it would be hard to sell politically to replace a recently required fighter force acquired at an astronomical price tag.
Contrary to what you seem to believe, the Eurocanards should IMO be viable export-wise for another decade at least. There’s no reason why a European 6th gen fighter programme, launched later in this decade, could reach an initial operating capability around 2030.
The US is doing more than just talking about 6th Gen, it’s spending the R&D funds on the key enabling technologies; engines, avionics and materials. It has several programs of record that will leverage these developments. Europe has nothing of the kind.
I think some perspective on the budget is required here.
The *total* cost of the F-35 program is less than what the US spends on medicare in a single year. While the USAF has to have the F-35 as well as pay for the tanker and the next gen bomber, the US Navy is not nearly as constrained thanks to the Super Hornet and its upgrade path.
The US government also doesn’t particularly like the idea of only having a single prime for manned fighter development; Boeing has enough political clout with congress and enough support in the Navy to make a 6th gen aircraft a reality in a time table well sooner than you allege.
The only thing making Eurocanard exports viable is the inclination of European governments to dump them at a steep discount. In general, it’s very difficult to make current production pay for future development in the military sphere. This is doubly so when, in the case of the Eurofighter, you have the most expensive and underdeveloped fighter of its generation.
It’s also very difficult to convince foreign governments to buy aircraft that you yourself aren’t purchasing and really aren’t developing to any great extent. The fact that several of the partner nations are buying foreign jets really doesn’t help. Foreign governments can and have exerted extreme price pressure under these circumstances which further undermines the case for current/future production paying for future fighter development.
Didn’t we hear your Ms. Clinton recently proposing steepest discounts to reenter the indian fighter competion?
“The *total* cost of the F-35 program is less than what the US spends on medicare in a single year. While the USAF has to have the F-35 as well as …”
sound like functional health care is less urgent than new fighter toys for the Air Force.
Confess, you’ve mixed up the acronyms and are actually talking about the PRK ?
My impression on the F35 is that it is predominantly about binding money and capabilites at junior allies lest they do something sensible and potentially threatening with it.
A similar project is the ISS in scope of space activities.
I think US defense spending, often seemingly ridiculously high, supported by a strong industrial political lobby (jobs, cultivated fear, patriotism) will decrease to more rational levels overtime.
In Europe defense spending is seen as a necessary burden, not a tool pride or global ambitions. Its low on the public priority list. Folks trying to boost defense budgets by fear mongering are largely ignored / sidelined.
BEA is active in aerospace, projects such as Taranis and Mantis will add to the portfolio. EADS has become market leader in areas like airliners and helicopters, transports like the A400M, KC30 and C235 seem well positioned, fighters are not in the EADS portfolio yet.
A next gen medium strike aircraft replacing the Tornado’s seems likely to be initiated this decade. The Typhoon is an interceptor that can carry bombs too. BEA would add knowledge and systems.
On the A400M, I notice folks on the web are starting to get nervous as the Grizzly approached EIS. I would not be suprized if e.g. LM or Boeing IDS joins a A400M variant offering and EADS cooperates on a LM 20t VTOL transport.
http://i191.photobucket.com/albums/z160/keesje_pics/C-43MultiRoleTransportAircraft.jpg
Those mushrooms in Amsterdam really work…
If US defense spending is “ridiculously high” (it’s not) it’s because our so-called allies don’t spend enough while at the same time relying on US when they want to engage in a live-fire sales campaigns for their fighters … also known as the Libyan operation.
Defense spending is a necessary burden that most European countries shirk; with the exception of the Netherlands I don’t believe there is a single NATO member that actually conforms to their treaty obligations in terms of defense budgets.
Again, all of this so-called market leadership is a lagging indicator. Did you see the concepts for European future heavy helicopters at ILA? It’s a competition between the Sikorsky CH-53K and the Boeing CH-47F! Europe has no plan of record for advanced helicopter development aside form a occasional technology demonstrator like the X3.
The only folks getting nervous about the A400M EIS are the countries on the hook to take delivery.
Are you aware of the Sapir-Whorf Hypothesis ?
Marauder have you ever considered what would be spending “too much” on defense? Or did patriotic feelings prevent you from even considering that possibility?
http://blog2.tshirt-doctor.com/images/def1.png
I think the future will be more about cooperation then fighting the bad guys. Everyone is online these days and the evil enemy appears to be folks watching soccer, have funny kids like Italian food and dance in the street. Collateral damage of those awesome weapons is online within an hour in the form of a crying mother asking questions. Hard to deny / satanize. Makes it harder to go to war..
So if the public has to choose between weapons, healthcare and education for more, the balance is changing. You just can’t keep everyone afraid these days. Defense cuts are the result. Parties like Boeing, LM, EADS and BAE have to live with it.
Having fifty plus years in aerospace I would venture a guest that EADS is about to become the World Aerospace Corporation that Big B could not or has not pulled off up to this point. Also if at some point mankind makes any real effort to explore space it will take a World corporation to make it happen. Many countries involved and a World engaged in exploration of other Worlds.
What really bugs me is that the same EU(Ger+FRA) turned the Volvo and Scania merger down, they would dominate too much..
Today Scania is controlled by VW.
How is EADS domination in aerospace any different? Double standards! Eu grows worse by the minute.
One way or another, Ms. Clinton is going to be gone by next year so her remarks can be safely disregarded.
If a discussion on WWII and its impact on the global aviation industry is off limits, then surely a debate about health care ist verboten!
One of the benefits of the F-35 is that it will render stillborn a lot of the nascent indigenous fighter development programs in allied countries which might compete with the US aerospace industry. The F-35 is already slowly euthanizing the manned European fighter industry. They know it. We know it. So the message to EADS is simple: “why don’t you jump on the team and come on in for the big win?” Hence, the BAE acquisition…
I don’t listen to hip hop…
The F35 is the only “affordable” single engined 5th generation aircraft available. Just like the F16 was ahead of the pack and lasts for decades so probably will the F35.
For the Eurofighter european cooperation let to an expensive fighter tat isn’t really multirole, lacks stealth, thrust vectoring and an AESA radar while the potential became clear 20 yrs ago. Because it wasn’t contracted 25 years ago and the contracts were so politcally – industrially fixed no one could turn the ship anymore. The germans tried at one point but gave up for euro sake.
The french were more independent and adjusted their Rafale platform as far as possible. Lessons learned for Europe for the next fighter seem to be not to involve everyone during the development phase. The J20 and T50 raised the bar and I expect European innitiative within 5 years.
BAE as well as Dassault, Saab and the Germans did research during the last 20 yrs.
http://media.aerosociety.com/aerospace-insight/files/2011/01/BAE-Replica.jpg
Maybe 2 design conglomates should be giving money to develop concept prototypes and get a winning platform baseline for later this decade. 2 Engined, sufficient range and stealth. Agility wouldn’t be the highest priority.
A EADS/BEA combination together with Saab no doubt is able to make something 5.5 or 6th generation.. Dassault seems to skip a fifth generation design, and go for a sixth generation “unmanned aircraft with a supersonic cruise speed, a fundamentally new system for jamming, equipped with a powerful laser and electromagnetic weapons, and missiles with hypersonic flight speed”
That’s a very interesting planform there…I liked it the first time I saw it in 1995 🙂
http://www.aerospaceweb.org/aircraft/fighter/jsf/jast_mdd_bae_01.jpg
I agree with your views on the necessity of 5.5/6th gen figher; The Eurocanards with AESA + Meteor can probably cope with advanced Flanker derivatives but the advent of the PAK-FA/T-50 (which has at least one guaranteed export customer) renders the viability of that otherwise capable combination quite doubtful.
A point worth considering here is that EADS brands Airbus, Eurocopter & ATR have all been frequently assisted in becoming market leaders on the back political purchase decisions.
With it’s American liniage Boeing is at an immediate political disadvantage within huge sways of the worlds military & civilian aeronautical business. Todays civilian market is living proof of this with Airbus now taking prime position on sales & production.
The potential bringing together of these two manufacturers & perhaps Dassault in the future with pan euro politically agreed projects, opens up a world military market that has often for political reasons reluctantly bought into N American brands.
If the defence product line up is developed in similar manner to it’s commercial arm there’s no question of who will suffer.
That’s a very good analysis.
Contrary to what some observers may think, IMO BAE/EADS will become a proactive organization rather than a reactive one, and I wouldn’t be surprised if Dassault and Saab joined up in due course. The current Eurocanards would be gradually phased out as a new pan-European fighter project got under way.
An Airbus-type family of 6th generation “ITAR-free” twin engine and single engine fighter aircraft, including carrier and STOVL versions, entering into service in the early 2030s, and available on a world market, which as you say, has often for political reasons reluctantly bought into N American brands, would certainly be bad news for Lockheed Martin and Boeing.
No. I’m far too jingoistic to contemplate such blasphemy! :b
We should fix military spending between 4-5% of GDP; it’s on the high side of that now (around 4.9%). I’m fine spending 4% but only if we reduce total personnel (the biggest single driver of US military expenditures BTW). We can definitely shed Army divisions, aircraft carriers and tactical fighter squadrons provided R&D and procurement aren’t impacted.
Cooperation has not been the modus operandi for humanity for 25,000 years. Do you think the combination of massive overpopluation (7 billion and counting) and concomitant resource depletion is going to change that? It’s a cause for very real concern.
The American public is pretty indifferent to the carnage we are capable of inflicting overseas; we regularly digest much heavier doses of realistic movie, television and video game violence.
The “guns vs. butter” dichotomy is a false one. You can spend an extra $500 billion a year on education and it won’t dramatically change outcomes; teachers & brick and mortar schools are really obsolete in the face of online/distance learning.
In absolute, relative and per-student terms, the US spends more on primary and secondary education than any other country in the world. Post-secondary education is even more lavishly funded; health care is so far beyond this scope of this site/discussion it’s not worth exploring.
An aquaintance once did an interesting oilpainting
portraying the then current political situation:
An armed clown on a world globe.
Still a concise and current observation, meseems.
The Joker is my favorite villain!
LOL. Air Power Australia has not been a “friend of the” F-35, to say the least. 😉
As for GaN, materials research is what drives “Moore’s law” and not fabrication technologies, while demand for GaN products are propelled by both commercial and military applications. However, Gallium is a rare earth metal and China is currently responsible for 94-97 percent of the world’s stock of these essential ingredients. The US manufacturing sectors dependence on imports of gallium is at 94 percent. In fact, gallium is high on the list of elements identified as being under serious threat of disappearing in the next 100 years.
http://researchcommons.waikato.ac.nz/bitstream/handle/10289/1484/Scott%20GaN-MMICs%20Paper.pdf?sequence=2
APA’s views on the F-35 are colored by an informed and nuanced perspective that the F-35 (aside from the B model for their LHDs) is a poor fit for Australia’s defense needs. I tend to agree; Australia really needs something like the F-15SE (which was not available when Australia made her decision) or ideally the F-22 or even more ideally the YF-23 (the range advantage of the latter being the decisive edge for Oz).
Materials research and Fabrication technology are inextricably linked. There’s no Moore’s law for III-V materials like GaA and GaN; the feature sizes are huge and the wafers are small but that’s okay. China is the dominant supplier of rare earths because of cheap slave labor and lax environmental restrictions. If they start playing games with restricting availability, other suppliers will emerge.
I know APA wanted the F-22, but that was before it turned into a “flying coffin”…. 😉
As for “Moore’s law”; what I meant to say was “More than Moore” (MtM). A term popularised by Europeans during the last decade.
Moore’s Law isn’t all that relevant for GaN utilisation.
All the regular applications are sparse in respect to material required.
A problem could be that it is a very attractive material for high efficiency LEDs.
And those are consumer goods with high production volumes.
On the other hand all new materials go through a phase of “everything will be
done much more effciently with this new stuff” followed by a phase where initial
expectations are frustrated, finally a range of adequate applications will remain
while all the breathless people start looking at the next “everything will…. ” material.
IMHO same goes for all that WunderTech some find so indispensable.
End of the day few things are real gamechangers and still fewer furnish
stable superiority ( IMHO NILL ).
It’s a “flying coffin” because it’s had one fatal crash during regular operation? Really, the F-15SE would be a great fit because it has superior range relative to the F-22.
It’s nice to see Europeans popularize a term about semiconductors; That’s pretty much the extent of their contribution to the semiconductor industry these days.
http://defensetech.org/2012/05/04/f-22-pilots-to-discuss-why-they-wont-fly-the-jet/
Quite a current article you have there..*cough* If they still aren’t willing to fly it there are plenty of Eagle and Falcon drivers who’d be eager to replace them. APA hasn’t altered their stance on the F-22 either, btw. Their grim assessment of the Eurocanards remains as well. But thanks for playing!
APA knows that the US Congress denied export permission for downgraded export variants of the F-22, and that the production line was terminated at 195 units.
Instead of buying a lemon (F-35) or a propped up legacy “teen” fighter, perhaps Australia could join a European 6th gen fighter programme instead as a partner.
I’m not sure if APA – which seem to hold Pierre Sprey in high regard – are all that impressed with the F-22 lately:
http://defensetech.org/2012/06/21/f-16-co-designer-claims-f-22s-glues-causing-hypoxia/
Several people I know work for ASML, I believe they are doing ok in the semiconductor industry these days.
http://www.eetimes.com/electronics-news/4370192/Analyst–ASML-holds-all-the-cards-in-litho
Looking *just* at semiconductor tooling suppliers, two out of the top 15 (by sales volume) are in the EU. Seven are in the United States and the remainder are in Japan.
“It’s nice to see Europeans popularize a term about semiconductors; That’s pretty much the extent of their contribution to the semiconductor industry these days.”
Thank you for opening our eyes on world truth. We will bow to our American Overlords for all the nice gifts they had us participate in. Now back to chipping arrowheads in front of my cave.
I’m an avid archer so I think there’s an export opportunity for you there 🙂
On balance, the rise of Airbus has been a net positive for the US as the impression that I’m starting to get is that the commercial aviation industry is really in the hands of the engine and aerostructures OEMs of which the US has many dominant players.
Yes and only one of the 8 biggest aircraft manufacturers is from Europe too.
Yes and only one of the 8 biggest cellphone manufacturers is from Europe too..at least until Nokia got waylaid by other competitors who secured the same degree of state support.
EADS definitely showed the world how state support of an aerospace champion can produce a highly competitive manufacturer. Unfortunately, EADS showed the world how state support of an aerospace champion can produce a highly competitive manufacturer.
I think its time for EU to stand on their own in defense and this will become ever more apparent when US shifts its focus to the SE Asia pacific region. The Libya campaign was an embarrassment to EU, they had to rely on US to have enough ordnance. That small short campaign.
And to have a huge defense corporation but not to sell to one self as the primary idea feels even more absurd.
Germany now reliant on Russian gas is a great way to stay independent.. What has happened to those customers that did something to rile Putin?!
EU is growing ever more absurd in its wish to build an empire its population never asked for or wanted. Barosso and Rompuy think they are Roman chancellors building their great empire. Sad to see so many europeans cheer this empire building. Will they succeed before the economy collapses? Fascism is back on this continent!
Empire:
If you see EU political behaviour as “Empire Building”
what do US foreign politics evauate to?
Oil:
While being dependent on US controlled seaways is so much better ?
Additionally my impression is that Belarus and the Ukraine were egged
on by US interests. Rather unsurprising the Russian government did
a show of force on that subject.
Lybia:
In effect the return to pre WWI colonial politics ( here by way of helping a phony
demoractic movement. ( And the final death of the UN imho. Only nobody seems to
have noticed )
What’s absurd is your off-topic political rants, and could you please take your anti-EU populism somewhere else, thank you!
Its not off-topic, not more than everything else in the thread. Super EU and super EADS, its these absurd ideas I oppose, we dont have to be equal to US in everything. I would rather see a diverce and competitive european aerospace industry, not less and in the end one single dominant player.
And if they oppose a merger in Sweden why is it ok to merge EADS and BAE, maybe a union is more than having the big members deciding everything. I have low hopes to see an independent Saab in the future. Why is it not allowed to oppose something you dont agree with? Being from a small member nation I feel that EU is going in the wrong direction, as defence is one key area of a nation this should be allowed to be opposed?!
“I have low hopes to see an independent Saab in the future. Why is it not allowed to oppose something you dont agree with?”
Nothing wrong with that. However, the future independence of Saab has nothing to do with this:
–
“Its not off-topic, not more than everything else in the thread. Super EU and super EADS, its these absurd ideas I oppose, we dont have to be equal to US in everything.”
“Super EADS” is the topic of this thread, not “super EU”. However, you have not been talking much about “super EADS”, and instead been pestering this thread continuously about the “wickedness of the the EU”.
As EADS is owned by governments it has a political side to it, a good example being the engines on the A400 that EADS had chosen to be PWs and politicians demanding european developed and built engines, losing Canada as a customer too.
The same nuts running the empire dream are also influencial on EADS. Thats my connection. I dont see you complain about the constant euro-lovefest from UWE on this site? So if you dont like my opinions dont read my comments. If Scott thinks I should leave I will.
A couple of days ago we came to the conclusion that ownership is essentially orthogonal to political influencing.
And note : I am in love with my wife but certainly not the EU.
There’s nothing wrong, of course, to discuss the role of governments in the governance of EADS. Again, that’s not what you’ve been doing. Anti-EU agitation such as “the same nuts running the empire dream are also influencial on EADS, does not contribute anything whatsoever of value to what you seemingly want to discuss.
As for the A400M; it’s a military transport aircraft paid for not by EADS, but paid for by the partner nations among which Sweden is not a member. In somewhat of the same way Sweden wanted as much of an independent JAS multirole fighter aircraft as possible (GE helped out with the engine), the partner nations on the A400M wouldn’t want to be held hostage to US ITAR restrictions. The method of control with ITAR in the US – when it comes to defense related technologies – is in practice to ensure no transfer of technology by any means, whereas in the EU where the A400M is largely based, the transfer is licensed and controlled while exports of the product is normally allowed.
Forgive the ad hominem, but Pierre Sprey is really just a bitter old man at this point and provably wrong about most everything he’s predicted or analyzed; to be competitive the F-16 totally departed from his lightweight fighter concept to the rather bloated (and at $80 million a pop, quite expensive) Block 60 you see today. His A-10 proved to be far too vulnerable in contemporary threat environments. Because of these flaws, these designs (*his* designs!) are being replaced by the F-35. That probably would make almost anyone quite angry but most would probably do the dignified thing and “just fade away.”
Congress is mercurial in some respects (they were reacting to Bill Clinton’s famous promise of the F-22 to Israel and his serious moves towards releasing Jonathan Pollard both of which are total redlines for the US military).
Now that congress realizes that F-35 unit costs are increasing because the F-22 line was closed down while at the same time the PAK-FA and J-20 have emerged (despite this present administration’s predictions to the contrary), they could very well change their minds. We’ll really have to see how this upcoming election goes.
Australia’s extremely close military and industrial ties to the US probably preclude a tie-up with (at this point) a still very notional European 6th gen fighter. Such a fighter, if it could meet Australia’s unique defense needs, would likely be a very poor fit for European defense needs. Furthermore, Australia has become quite exasperated with “beta testing” European defense exports such as the Collins class subs and NH90/Tiger fiascoes.
Sure, ad hominem is a “useful trick” when you don’t want to discuss the topic in question. As I’ve repeatedly indicated; F-22 safety concerns linger. Instead of addressing the issue head-on, you want to keep the USAF busy replacing F-22 pilots with ones who are flying the F-15/-16, while you’re keeping yourself busy attacking any messenger who’s casting doubt on the safety of the pilots who are flying your seemingly beloved Raptor.
–
http://www.military.com/daily-news/2012/08/26/f22-safety-concerns-linger.html
So “safety concerns linger” is your point? Safety concerns linger for the Eurofighter-2000 oh..wait just Eurofighter now, Rafale and Gripen all of which have had serious accidents (some fatal) during operational deployment and development. So what’s your point? Those accident records and whatever underlying issues cause them don’t detract from the capabilities of those aircraft any more than they detract from the capabilities of the Raptor. I do like the Raptor but feel that the USAF should have gone with the YF-23.
But my major point is that designs like the F-22 and F-35 are the future as evidenced by the planforms embraced by Russian, Chinese, Korean, Indian and Japanese designers.
All of these countries have accompanying programs of record for materials/avionics/engine R&D to support these planforms. Europe has none of the above and is still scrambling to find the funds and the will to mature their 4++ gen fighters.
I sense a strong don’t do what we like to do emotion here. Maybe EADS- BAE is pushing some out of their comfort zone.
I think the US society will continue to invest public billions in its militairy industrial complex for various reasons and sucessfullly work its public to guarantee funding. Europe will do the same, probably in different ways.
Both blocks running on public rather then private money of invisible magnitudes, specially if you don’t want to see and just identify with the awsome products. 😉
I would fully expect Europe to become fully self-sufficient in terms of military hardware. I’ve got no problems with publicly funded defense companies or state owned enterprises. Like I’ve said, I think the rise of Airbus has been a net win for the US and the industry as a whole.
What I don’t like is state backed industry competing with private industry; the advent of a successful state backed enterprise like EADS has the follow-on effect on inducing more countries to go that route. And EADS swallowing one of the largest private defense firms (with cash furnished by the public sector) is only going to hurt innovation in areas where BAE has made solid contributions.
Without strong political and financial support in a thousands visible and invisible ways for many decades there would be no Boeing as we know it.
The US government and Boeing are mutually dependent in so many ways its hard to choose where to start.
Feel free to deny / dismiss / look the other way, it doesn’t change reality.
That is doublespeak or newsspeak ( whatever you like )
Neither Airbus nor EADS have hurt innovation.
( that was imho more Boeings part, driven across the playing field by innovative products from the competition.)
Your primary error is to assume that the US market is a free market. It appears to be even more government money suckling than in most other countries.
Uncontrolled markets invariably lead to oligo- or mono-polisation. Smaller markets are nearly exceptionless dominated by bigger economies.
The freedoms you demand are invariably only usefull for
the market dominating group.
So your philosophic stance is a bit rich imho.
That explains why the Pratt & Whitney of Canada engine bid was rejected although it was 10% lower than for the Europrop TP400.
Wasn’t that obvious from the beginning ? ( Keep ITAR dependent core content low )
The US is pretty ‘Borg’ish in that context. Working on MIRO the JPL tried to subsume
all of our IP into their fold. ( via contract wording ) pretty feisty imho.
Oh the irony of an EU-statist quoting from Orwell’s “1984” 🙂
I’ve mostly been confining my discussion to the defense side of things; a simple interrupted time series analysis of the types and quality of the defense products coming out of EADS constituent members pre and post EADS is revealing. In short, it’s grim and the future looks no brighter hence the Northrop Grumman Viper Strike acquisition and the BAE merger proposal. I fully expect Astrium to end up like Nokia; waylaid by SpaceX and other new entrants.
Where have I stated that the US market is a free market? It’s not. Yes, assuming perfect competition net profit goes to zero and you see oligo- or mono-polisation. But there’s rarely perfect competition; look at the sheer number of handset manufacturers for smartphones. And while that may not be the steady state that’s my very point; innovation tends to ruthlessly undermine oligo/monopolies unless they can appeal to the state or adapt. Defense consolidation (induced by the state) in the US hurt defense innovation.
The Smartphone market is an interesting object for learning.
You have two big OS providers :
Apple: iOS : though an open kernel ( BSD, BSD licensed ) the remainder is closed.
Google: Android : open kernel ( Linux, GPL licensed ) fully accessible source
( The license differences are instrumental! Read Up )
For iOS due to its closed nature you have one hardware provider : Apple itself.
For Android due to its open nature you have a myriad of hardware providers
and value add products.
This retraces the success of the IBM PC platform as unifying definition for
a diverse market.
The primary facilitator for a diverse market is providing an open infrastructure,
in day to day life roads, railways, power in pc market the defacto common interface definition of the hardware and in the smarphone arena the provision of a common OS inserted by a very large entity.
I would deem GSM another good example of a functional “overlord” market.
I think now and then a well informed civil servant should look over the parking lot at some industry facilities, and realize the people that paid him and all he sees might have changing priorities at some point. After the cold war a restructuring was on the agenda when OBL killed thousands of innocents, down the street this time iso across an ocean. That delayed the process by a decade. But now a rationalization is coming and a good part of the industry is going to have to look for their R&D billions away from the various state innovation money streams.
If all defence comanys in EU get incorporated into EADS, my fear is that ideas that would have made it in the old days get voted down to fit the larger picture. Say that Saab is next on the menu, developing a fighter jet suitable to our small nation wont fit EADS need of a large twin engine fighter, what is the chance the smaller model would be developed? Merging and trimming, slimming, united thinking and ideas, this is not what the world needs, we need more divercity, more competition, more wild ideas. There will probably be a single type of personality that will get employed to fit the model. Opposition inside the lines will be verboten, look at how Boeing got rid of a manager that was too cheeky and spoke his own mind, that will not be tolerated!
Look at how the US side conforms into 1 fighter, the F35, 40 years ago there was room for 3 or more fighters from different OEMs. If one failed there were other options that did not. EADS will probably just develop one fighter, no more EF+Gripen+Rafale. And by looking at LM dominating the fighter development, that did come at a huge cost to the taxpayers.
I am too libertarian to cheer the corporatism growing in the world, bigger is not better! Too big to fail is a failure! It is a sad era we live in, we are borg resistance is futile you will be assimilated!
I see your argument.
From another industry Saab ( automobiles ) is a perfect example.
Saab could no(longer/t) exist on its own. After aquisition GM ran it into the
ground by ditching the distinguishing features and selling an unimaginatively
pimped Vectra under the Saab brand.
Opel is unprofitable due to GM having transfered all IP rights to the mother and
now withdraws large amounts of cash for “licensing”.
The counterpoint here is VW successfully integrating various brands while morphing
them into quite acceptably managed and well selling brands with distinct product ranges.
The difference? myopic and exclusive focus on shortterm profits and general lack of vision
…. or not.
Anyway and imho: Your point is a Hobson’s Choice thing.
Without integration you will loose diversity by participants going broke.
( aside from other reasons by way of being unable to play with the big boys )
With integration you loose by way of “Gleichschaltung”.
With wise management you loose less by intergration while gaining from the larger backing.
EU blocked the merger of Scania and Volvo trucks, they would become too dominant and stiffle competition, now Scania is controlled by VW and will be merged with MAN in the future.
Now EADS and BAE merging is the best thing since sliced bread. I call double standards here. Everthing that benfits dominant Germany is ok, everthing that doesn´t is voted down. Tell me again why I should love EU?! People that worked on Neuron at Saab were less than impressed by how the french act in a cooperation as they call it.