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MBDA Sees European Missile Sector Evolution

LONDON — Missile manufacturer MBDA is considering measures that could help to unify and strengthen Europe’s supply chain for guided weapons.

The vision to move to a single European contractor was spelled out in November by the Franco-British defense treaty. MBDA also includes Italian and German branches, but several elements of Europe’s guided-missile supply base remain outside the 10-year-old business.

MBDA CEO Antoine Bouvier says consolidation is not a goal in itself but rather a means of ensuring that industrial capacities remain in Europe even as budgets shrink. In competitive terms, he points out that missile sales for rivals Raytheon and Lockheed Martin are higher than combined European spending on guided weapons.

“We will develop some initiatives” to foster consolidation, Bouvier adds. So far, there have been no talks with Thales, but “this is something that could be developed in the next months.” MBDA already has a relationship with Sagem on the AASM bomb program, which could be accelerated.

A stronger European company is supposed to aid MBDA’s export push, too. In 2010, exports dipped to 31% of sales from more than 50% owing to delays in program decisions — one of the setbacks in terms of the business’s financial performance last year, acknowledges Julian Whitehead, MBDA CFO. Overall, sales increased 8% to €2.8 billion ($3.9 billion), with return on sales above 10% and higher than the year prior.

One key task for MBDA will be to sort out the effects of the Pentagon’s decision to end its involvement in the Medium Extended Air Defense System after the current phase ends in 2013. MBDA’s German and Italian units are involved in the program.

“The U.S. decision was a surprise to me,” Bouvier says, especially coming so soon after NATO’s missile defense commitment made at the Lisbon summit.

Meanwhile, efforts are continuing to add programmatic details to the Franco-British agreement to cooperate more closely in the realm of guided weapons. An upgrade to the Storm Shadow/Scalp cruise missile is one effort that could start taking shape this year.

MBDA has examined various options, including enhanced data link connectivity or improved warheads, and now is working with its customers to finalize the framework of an actual program, says Steve Wadey, managing director of MBDA U.K.

Photo: MBDA

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