Anticipating a growth in the activity of its South African business, Rheinmetall Waffen Munition (RWM) has teamed with its South African based subsidiary with Denel – Rheinmetall Denel Munition (RDM) to acquire the Laingsdale Engineering company of Cape Town, South Africa, previously a division of Tellumat Pty Ltd. Under the new ownership RWM will have a majority interest of 51% in the new company, with RDM holding the remaining 49% share.

The company provides precision mechanical manufacturing related to fuses, safe-and-arming devices, kinetic energy weapons and a variety of naval applications. Laingsdale Engineering has about 180 employees and had sales in FY 2009 of approximately €10 million. The bulk of Laingsdale Engineering business is currently with RDM. The company expects to see its business volume double from the current figure. “We are excited about this acquisition which will enhance and grow our business in South Africa”, said Norbert Schulze, CEO of RDM. “We have acquired a highly successful company which we have been working with for many years and with great success.” The new skills and capability base it is acquiring in precision mechanical manufacturing will enhance Rheinmetall’s current indigenous ammunition products.

The Raytheon Company has acquired Technology Associates Inc., a privately held supplier to the U.S. intelligence community, providing system engineering support for mission-critical programs. Technology Associates’ capabilities include data extraction and analysis; digital media intercept and exploitation; embedded system programming; and information assurance services. Based in Reston, Va., Technology Associates was established in 1990 and has 110 employees.

Technology Associates will become part of Raytheon’s Intelligence and Information Systems (IIS) business. Technology Associates President Preston Harrelle joins Raytheon and will continue to lead business operations while taking on a broader cyberstrategy role across the Information Security Solutions (ISS) product line. “By acquiring Technology Associates and integrating its talent and expertise into our business, we’ll further strengthen our ability to meet the evolving needs of our customers.” Lynn Dugle, president of Raytheon IIS commented.

Elbit Systems Ltd. announced today that it was awarded an approximately $56 million tank upgrade contract from a customer in Asia. The tank upgrade project will span over 24 months and include the installation of battle management systems (BMS), and optronic observation and surveillance systems. The current program is a follow-on upgrade Elbit Systems is conducting with this specific customer (the identity of the customer was not released).

Due to political implications and U.S. technology transfer limitations, Israeli companies are restricted in offering defense systems to a number of Asian countries. Among these, Azerbaijan, India, Singapore and Thailand fit the vague description provided by the company.

It was reported in the Indian media that the Indian state owned DRDO is cooperating with Elbit Systems in the development of Battlefield Management System for the Indian indigenous Arjun tank. BMS integration could follow as part of the continuous Indian upgrades of the T-72M tanks and, and, possibly with the T-90S.  Such BMS allows the tank to network with other fighting units, enabling several tanks to network with other each other, to effectively engage multiple targets. On the other hand, Azerbaijan has recently received 62 T-72 tanks from Russian military surplus. Azeri T-72s have already been updated with new fire control and remotely controlled weapon station.

On Thursday last week (Sept 30) the Pentagon awarded two competitive contracts for the delivery of advanced targeting pods for U.S. Air Force fighters. The Air Force will continue the procurement of two types of pods under the Advanced Targeting Pod – Sensors Enhancement (ATP-SE) program – the AAQ-33 Sniper from Lockheed Martin and AAQ-28(V) Litening – from Northrop Grumman and Israel’s Rafael. The total spending on the two systems over the life of the program could reach US$2.3 billion. The service is seeking to acquire an estimated 275 systems. At present, the contracts awarded to each of the two teams amount about $23 million each.

ST Aerospace has been selected to operate the Singapore Republic of Singapore Air Force’s (RSAF) training in Cazaux, France. As the prime contractor for the entire program, ST Aerospace is acquiring 12 M346 advanced trainers at the cost of S$543 million, the first is scheduled for delivery in 2012. In addition, ST Aerospace will provide systems maintenance and support while Boeing will provide ground based training as a subcontractor. ST Aerospace has been providing depot maintenance for RSAF’s A-4SU / TA-4SU fleet in Cazaux since 1999. In 2007 the company was selected by the Singapore Ministry of Defense (MinDef) to widen the scope of its maintenance program to Total Aviation Support.

African defense companies are challenging the dominant Western suppliers of mine protected armored vehicles, competing for MRAP type vehicle contracts. According to Ivor Ichikowitz, Executive Chairman of the South African Paramount Group, South Africa’s largest independent defense and aerospace contractor, African companies have emerged as technological equals to some of the world’s top manufacturers of Mine and IED Protected armored Vehicles (MPVs).

Ichikowitz referred to the recent growth in the domestic and continental demand for armored vehicles in Africa, “With African defense spending up nearly a third since the end of the Cold War, Africa is purchasing more defense and security systems. This has stimulated manufacturers, engineers and scientists to produce world-class products.”  African companies such as the Paramount Group are not only competing on an international level, with interest from governments in Africa, the Middle East and Asia, but also offering better in-country benefits for purchasers. Whereas the Western majors manufacture their equipment far from the destination market, Paramount Group takes an ‘in-country’ approach, where it establishes production facilities in regional markets. This ensures that the economic and development benefits associated with production, training and marketing help the local population, not just the shareholders in New York or London.”

“The world has finally discovered that Africa has some of the best technologies at affordable prices” said Ichikowitz.

The Paramount Group has unveiled today a new armored infantry fighting vehicle called Mbombe. According to the company, the vehicle has not yet been ordered but several potential customers are already interested, including Gabon.

Mexico is increasing its order for Eurocopter EC725 Cougar helicopters with additional six helicopters, following an initial order for six made in March 2009. Eurocopter will supply all 12 helicopters to Mexico’s SEDENA (Secretaría de La Defensa Nacional) beginning in the second quarter of 2011. The helicopters will be used for transport and civil security missions. EC725 is the latest member of Eurocopter’s Cougar family. This multi-purpose, 11 ton class helicopter is capable of transporting 29 passengers and mission endurance of 5.30 hours.

This contract represents a further consolidation of Eurocopter’s presence in Mexico, which is managed by its Eurocopter de Mexico S.A. de C.V. subsidiary. A majority of the country’s government departments have been operating Eurocopter helicopters since 1964, which are utilized in supporting the airlift and transportation needs of the Mexican President, the Navy Secretariat, the Ministry of Defense and other users. over 350 of the company’s helicopters currently in service in this region – representing a market share of more than 50 percent. Brazil has recently ordered 50 EC-725 helicopters for its armed forces. These helicopters will also be produced by Helibras, Eurocopters’ subsidiary in Brazil.

Defence and Security division of EADS is rebranding itself as ‘CASSIDIAN’, reflecting its ambitious mission ‘to support those who protect the world’. The new name comes from the Latin term ‘Cassida’ (helmet) and ‘meridian’, an imaginary line running north and south. The company remains a division of EADS, headed by CEO Dr. Stefan Zoller. “Our business has changed significantly in recent years. We are not two silos – one Defence and one Security, but a company that offers global protection in a wide sense. CASSIDIAN will soon be a distinguished and reputable

name for global security solutions,” said Zoller. He believes the new brand will help improve the company’s marketing its defense and security product portfolio, by establishing a clear-cut profile in the global market place, primarily in India, Brazil and the Middle East considered as major growth areas for CASSIDIAN. The company’s three business units – electronics, air systems and systems are also renamed with the new brand and logo.

The move is part of an overhaul of EADS brand identity, introduced on the 10th anniversary for EADS by CEO Louis Gallois. “This brand renovation embodies exactly the spirit of Vision 2020, our strategy for EADS’ next ten years: reinforce each of the four Divisions, give them the visibility they need to market their business and at the same time materialize the strength and unity of the Group” Gallois said. The new brand architecture has been revised for better integration within a common visual identity for the entire EADS Group and the four divisions – Airbus, Eurocopter, Defence and Security and Astrium. The new identity will be progressively implemented across the Group.

An Israeli-French  joint venture to be established by early 2011 will focus on tactical Unmanned Aerial Systems (UAS). A principal agreement on the move was signed today as a Memorandum of Agreement (MoA) between the French defense company Sagem Defense Securite and Israel’s Elbit Systems.


The two companies will establish a jointly owned French corporation, to be located in Eragny and Montluçon in France and owned by the two companies in equal shares. The new company’s portfolio will comprise newly developed products, as well as current and derivative products, from Sagem and Elbit Systems. The new venture will target the French market and specific international markets, in which existing initiatives will continue through the JV. The new company will be formed by the equal contributions of assets from the two parent companies.

Sagem is the leading French developer and manufacturer of UAS. Two of the company’s products are the Sperwer Mk II tactical UAS and its derivatives, and the Patroller, a new medium altitude, long endurance drone.

Elbit Systems has a wide range of tactical UAS, from the lightweight Skylark 1LE and Skylark II, to the Hermes 90, and Hermes 450 which has already been considered by the French Army. A larger platform, Hermes 900 was recently added to the product line. Elbit Systems has an ongoing cooperation with Thales, for joint development, marketing and support of UAS. Thales is leading the Watchkeeper program in the UK, providing tactical UAS for the British Army. Development, production and support of these systems is provided by U-TACS, a JV established by the two companies, similar to the one Elbit is launching with Sagem.

Apart from their parallel UAS business lines, the two companies have also competing activities in the fields of electro-optical payloads, soldier systems, thermal imagers and and target acquisition systems.

U.S. Secretary of Defense Robert Gates and undersecretary of defense for acquisition, technology and logistics Ashton B. Carter announced yesterday new rules guiding the Pentagon’s $400 billion-a-year procurement process. These guidelines are expected to save $100 billion over the next five years without impairing warfighting capabilities and readiness. By implementing this strategic reform, the Pentagon expects future systems will become more affordable, reliable and supportable.

“Consumers are accustomed to getting more for their money — a more powerful computer, wider functionality in mobile phones — every year,” said Gates “when it comes to the defense sector, however, the taxpayers had to spend significantly more in order to get more. We need to reverse this trend”. One of the key elements in Gates’ new rules is for program managers set a new affordability target. “This target can’t be altered without authority from Carter. Managers must ensure the initial design is constrained by its ultimate schedule and cost.” Gates explained, adding that this guidance will make programs more affordable without sacrificing capabilities and prevent us from embarking on programs that will need to be cancelled when they prove unaffordable.

Gates and Carter outlined the 23 areas expected to be improved by the plan. Specifically, new contracts will address and mandate affordability to control cost escalation. By implementing these procedures the Pentagon plans to reduce 27 percent in a program where costs are projected to be more than $100 billion.

Some of the new programs to be started in the near future will put the new rules to the test. These include the next-generation ballistic missile submarine (SSBNX), long-range strike systems for the Air Force and Navy, and the Marine Corps presidential helicopter and the ground combat vehicle. The later was cancelled recently and the current pause will enable the PM and industry to ‘start on the right foot’, along with the new procedures.

Under the new policy companies will be required to provide more predictable cost estimations and meet those costs down the road. They will be rewarded for efficiency, consistently delivering affordable systems on time, and below budget. When costs increase happen, contractors will be required to share the burden. Prime contractors are likely to be most exposed to this new risk, but subcontractors could also find themselves vulnerable when required to take responsibility on delays they cause, far exceeding their share of a program. Therefore, the new regulation, although positive in theory, is likely to cause significant concern among second and third tier suppliers.

On its part, the government will examine processes to streamline the process, for example, by committing multi-year contracts over year-by-year acquisition. More competition and the encouragement of small business enterprises are also considered vital for cost reduction. As an example, the littoral combat ship program shifting from directed to competitive buys, is expected to save over $1 billion.

To increase affordability and reduce life cycle cost, the Pentagon will require the use of open-system architecture.

Another area where the defense sector fails to achieve the results of the open market is in outsourcing contracts, considered a significant money saver in the commercial market. Outsourcing services in general have grown dramatically in the past decade. “This area that has grown to become a $200 billion annual cost to the department,” Carter said. “Half of our costs are for services, and we’re performing worse there,” he said. Indicated this inflated outsourcing should be better managed. To improve control, the Pentagon is shifting back to in house contract management. In the past year the Pentagon has been hiring procurement officers in the thousands to handle the acquisition process outsourcing to industry in the past decade. Aware of the potential of bureaucracy they may add, Carter promised to weed out those ‘ unproductive bureaucratic processes’.

Carter added that he will oversee progress daily and will provide progress reports to Gates monthly. “To those who hesitate, to those who fear to go down this path, they need to consider the alternative: broken promises, cancelled programs, unpredictability and uncertainty that is bad for industry, erodes taxpayer confidence, and worst of all, results in lost warfighter capabilities,” he said.