The F-22 Raptor Demonstration Team flies alongside the Air Force Heritage Flight Foundation P-51 Mustang over the skies of Battle Creek, Mich., July 7, 2019.
BATTLE CREEK, MI, UNITED STATES
07.07.2019
Video by 2nd Lt. Samuel Eckholm
633rd Air Base Wing Public Affairs
By Pierre Tran
Paris – Serco is seeking to break into the French defense market with offers of support services to military commanders, part of the British company’s bid to triple sales in Continental Europe in the next four years, two directors said.
That drive to win French outsourcing deals follows a win in September of a Belgian 10-year contract worth €40 million ($44.4 million) for facilities management of Heverlee and Meerdaal army bases, at Leuven near Brussels. There are 31 more bases, seen as scope for further contracts.
The concept of support service starts with awarding a contract for a company to maintain buildings, taking care of mundane tasks such as catering, supplying bed linen, and mowing the lawn, allowing commanders to release personnel for military duties.
“They can focus on soldiers being soldiers,” said Mark Varney, Serco defense business development director for Europe.
A pursuit of outsourcing deals comes as president Emmanuel Macron, leading a center-right administration, seeks to privatize state-owned companies and liberalize the market. That includes a plan to sell all or part of the government’s 50.6 percent stake in ADP, an airport operator. That prospective deal has sparked strong political protest and call for a referendum.
“France is one of the most unprivatized markets, along with Germany,” said Sash Tusa, analyst at with equity research firm Agency Partners. “The UK has outsourced more than any other country, except for the US, and that cuts the cost base.”
Varney is looking to pitch the offer of facilities management (FM) and other support services to French commanders and procurement officials.
Beyond managing military bases, Serco’s core offers are maintenance repairs for naval fleets and running training academies, he said. In the former, the company runs dockyards at Portsmouth, southern England, and Clydebank in Scotland. The company manages Australian, British and Qatari training academies.
Varney, who relies on introductions through the British embassy, attended a thoughtful presentation of paintings and sketches by Arabella Dorman, a war artist, at the ambassador’s official residence on July 9.
The British executive is also working through the UK department of international trade, as he seeks high level access to propose service support from the private sector.
That is a “mature approach” in the UK, US and Australia, he said. Belgium’s opting for an outsourcing deal could serve as a model for presentations in France. The company could tailor its support to the some 44 bases in France, including the Ecole Militaire, which houses the war college, and has stables and swimming pool to maintain, he said.
Serco competes with Babcock, a British rival, which won in 2016 a contract to support a French air force program, dubbed FOMEDEC, to train fighter pilots. Babcock supplied 17 PC-21 single-engine trainers and teamed up with Dassault Aviation on that landmark deal.
“Flying training is not about the platform, but the complete training system,} Tusa said. “Babcock and the French air force, to their credit, confirmed that.”
Serco’s plan to triple sales on the Continent is based on growth and acquisition, with an option of buying a small or medium company to boost local contact with defense ministries, said Gaetan Desclée, managing director for Europe.
“Do we need to make an acquisition?” he said. “With our knowledge, practices, resource, we can help them develop much faster and access to bigger market. We act as a global company and we are convinced that we need to have local roots in every country, developing our services.”
Serco sees itself as a global company, listed on the London stock exchange with international shareholders, while acting locally, he said.
The company has been on an acquisitive streak, having bought a US company specializing in naval systems and made an unsolicited offer for Babcock, which was rejected.
“They were trying it on,” Tusa said, referring to the Babcock bid.
That pursuit of acquisition may reflect the company’s efforts to counter a slowdown in the core British market, which accounted in 2018 for some 40 percent of Serco’s sales.
The defense sector accounts for €1.1 billion, some 30 percent of of annual sales.
The company strikes local partnerships with companies including Lockheed Martin, Airbus, Thales, Dassault, Engie, and Air Liquid to ” customize solutions,” Desclée said. Serco teamed with Airbus in the space sector and works with Lockheed in the UK.
Space is seen as a growth prospect as Macron has said he wants the CNES French national space agency to work more closely with defense, he said.
Serco works with Sodexo, a French catering company, to provide meals in 16 British hospitals, Varney said.
Activities on the Continent generate more than €100 million in annual sales, and the aim is to rise above €300 million in less than four years, Desclée said. The Belgian contract generates annual sales of some €4 million and the company seeks to lift annual sales in that country to €12 million.
“I would be very happy if I got half of that in France,” said Varney, adding that he hoped to secure a “decent sized portfolio” of two or three contracts generating estimated annual sales of €2 million.
Asked about the impact of Brexit, Desclée said, “There is a bemused curiosity about what is going on in the UK.” The European unit of Serco “stands on its own” and is relatively autonomous. On the programs, there is a local manager, with the skills from Continental Europe, not the UK.
Serco announced May 23 acquisition of the naval systems business unit of Alion Science & Technology for $225 million. The unit reported 2018 sales of $336 million and orders worth some $600 million. Serco’s business in North America generated sales of $453 million.
That business unit specializes in design of ships and submarines, engineering, and support services for the US Army and Navy, and Canadian Navy.
Rupert Soames, a grandson of Winston Churchill, is chief executive of Serco. His brother is Nicholas Soames, a parliamentarian of the Conservative Party, which picked Boris Johnson as prime minister.
Serco reported July 31 reported first-half operating profit fell to £17.2 million from £31.9 million. That fall in operating profit stemmed from a charge for exceptional items, which included £22.9 million tied to the UK Serious Fraud Office (SFO) closing an inquiry, the company said.
Serco had accepted a £19.2 million fine for three charges of fraud and two of false accounting when the company had provided electronic tagging to the UK Ministry of Justice between 2010 and 2013, Reuters reported. That fine was halved as the company had reported the offences and cooperated with the inquiry. An agreement had been reached with the SFO.
First-half underling trade profit rose to £50.2 million from £37.6 million a year ago.
Serco’s flagship FM deal in the UK is to maintain Fylingdales, the RAF base plugged into the US ballistic missile early warning system. That contract dates back to 1964.
The company also services aircraft in the UK, including BAE 146 jets, which fly the royal family, prime minister and senior officials.
New Delhi. In continuation of the Indian Navy’s overseas deployment to Europe and Africa, Indian Naval Ship Tarkash arrived at Helsinki, Finland, today, on 31 Jul 19 for a three day visit.
The ship is part of the Indian Navy’s Western Fleet and is under the operational Command of Flag Officer Commanding-in-Chief, Western Naval Command, based at Mumbai. Vice Admiral Ajit Kumar P, Flag Officer Commanding-in-Chief, Western Naval Command also arrived in Helsinki on 30 Jul 19 and will lead the Indian delegation during the visit.
INS Tarkash, one of the most potent frontline frigates of the Indian Navy equipped with a versatile range of weapons and sensors, is commanded by Captain Sathish Vasudev, who leads a highly motivated crew of over 250 personnel including 30 Officers.
During the port call, various dignitaries and government officials of Finland are scheduled to visit the ship. Professional interactions are planned with the Finland Navy and Coast Guard towards further enhancing co-operation between the two countries.
In addition to social engagements and sports event, best practices will be shared between the Indian Navy and Coast Guard of Finland.
Finland and India have traditionally enjoyed warm and friendly relations. A number of bilateral arrangements for co-operation and cultural exchange exist between the two countries.
The two sides have also had high level bilateral visits and interactions resulting in a rapid growth in relations across a broad spectrum.
Indian Navy ships are regularly deployed as part of Indian Navy’s mission of building ‘bridges of friendship’ and strengthening international cooperation with friendly countries.
The ship visit to Finland comes amidst growing importance and convergence of national goals towards shared maritime interest and deepening of ties between both the countries.
This article was published by our partner India Strategic in August 2019.
By Robbin Laird and Ed Timperlake
The United States and a number of key allies have begun to focus significant attention on reworking the supply chain in key industries associated with imports from China.
As Dr. Harald Malmgren recently noted: “Much new industrial thinking is under way how the next phase of manufacturing should be structured.
“In this process of reconfiguration US officials are advising companies to seek complex products with high information technology components that have no Chinese content…the economic cold war with China is sparking an entirely new kind of surge in demand for “zero Chinese content.”
In her recent book, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, and recent testimony before the U.S. China Commission presented on July 31, 2019, Rosemary Gibson focused on one such industry, which needs a serious rethink in terms of supply, namely, the pharmaceutical industry.
This is especially true with regard to generic drugs which are 90 percent of the medicines Americans take.
Her testimony has focused largely on the United States but much of what she has documented in her recent book with Janardan Prasad Singh also applies to our allies as well.
We had a chance to discuss the subject with Ms. Gibson prior to her testimony on the Hill.
In our discussion with her, she clearly focused on China’s strategy that she documented for this sector, which follows the playbook of predatory trade practices common in other strategic industries.
China undercuts Western producers on price as a deliberate strategy for global domination.
China RX Rosemary Gibson Testimony from SldInfo.com on Vimeo.
But she clearly underscored that China could not do it by itself.
“It’s not just China, though.
“We have to look in the mirror and understand how is it that we’ve lost our industrial base.
“Companies here in the US, Fortune 100 companies, have been sourcing medicines from Chinese manufacturers to increase their margins and profitability.”
“We have considered aircraft carriers and nuclear submarines as off limits to outsourcing.
“And we pay more for that because we can understand that that’s essential to our security.
“The same thinking needs to be applied to generic antibiotics and other medicines essential for life.”
She underscored that even though the issue of drug manufacturing and supplies is obviously a critical national security issue, it is not dealt with as such. She recommends a whole of government review to assess vulnerabilities in the industrial based and recommend options to strengthen it, broadly similar to what the DOD is doing with regard to the defense industrial base.
She noted, “It’s no one’s job in the U.S. federal government to know who controls the supply of our medicines.”
That needs to change.
“We need to consider our medicines as a strategic asset, as we do for oil and other energy supplies and food commodities.”
In effect, what the U.S. and the allies have experienced is what one might called distorted globalization driven by the Chinese and supported by industrial strategies which assume that lower price global sourcing is the goal, rather than taking into account that the world is not just one big happy marketplace, but is an arena where great powers compete with economic as well as military instruments.
Much like Dr. Malmgren underscored a shift in thinking with regard to new manufacturing approaches associated with rethinking the over engagement in China Inc., Gibson highlighted new approaches which can be tapped in the United States and in the liberal democracies to do so with regard to pharmaceutical manufacturing.
She argued that new approaches are at hand to be able to generate significant stockpiles of the core ingredients regarded for core generic drugs.
And as Dr. Malmgren has highlighted in his recent work on advanced manufacturing, the new technologies allow for much shorter supply chains to generate core capabilities, rather than having to have very long global supply chains.
Clearly, pharmaceutical manufacturing is such an industry.
We finally discussed how the African swine fever epidemic is devastating China’s pig population.
And it turns out that pig intestines are the source of a raw material for a medicine, heparin, a blood thinner, that is used ubiquitously in hospitals—and China is the source of 80 percent of the global supply.
Without this medicine, hospitals would cease to function.
Thus, pig intestines can be considered the “rare earths” of medical care.
See also the following:
The New Warfare: Rethinking the Industrial Base for National Defense and Security
The 1918 Spanish Influenza killed 21-50 million people worldwide, and there’s a surprising connection to military medicine.
FALLS CHURCH, VA, UNITED STATES
10.15.2018
Military Health System
Defence personnel from Australia, the United States, Japan and the United Kingdom have conducted a training activity in the Bowen and Proserpine areas on 22 July, as part of Exercise Talisman Sabre 19 (TS19). The primary activity centred around an amphibious landing of troops on King’s Beach and Flagstaff Hill in Bowen, Queensland.
The forces were then able to move through to fixed locations throughout the Bowen township to conduct further, controlled training. TS19 is a bilateral combined Australian and United States (US) training activity.
TS19 is designed to practice our respective military services and associated agencies in planning and conducting Combined and Joint Task Force operations, and improve the combat readiness and interoperability between Australian and US forces.
TS19 will be the eighth iteration of the exercise and consists of a Field Training Exercise incorporating force preparation (logistic) activities, amphibious landings, land force manoeuvre, urban operations, air operations, maritime operations and Special Forces activities.
Australian Department of Defence
July 24, 2019.
By Pierre Tran
Paris, France
Germany’s suspension of arms exports to Saudi Arabia led to a continued financial hit for Airbus, which reported July 31 a charge of €208 million ($232 million) in first-half results.
That charge comprised a charge of €18 million in the second quarter after a charge of €190 million in the first quarter, the European aircraft builder said in financial results.
Berlin earlier this year extended to September its six-month ban on weapons exports to Riyad, to protest against the slaying of Saudi journalist Jamal Khashoggi.
London and Paris have criticized that German sanction, as the Berlin ban has held up delivery of British and French weapons which rely on German parts.
Meanwhile, the Airbus Defence and Space (ADS) division said Julian Whitehead would take up the post of executive vice president for global business and strategic programs on Oct. 1. Whitehead is executive VP for finance and sits on the executive committee at the division.
That appointment was significant in view of the work on the Future Combat Air System and a European medium-altitude, long-endurance drone, Dirk Hoke, Airbus DS chief executive, said in a statement.
The first-half charge of €208 million on the German arms freeze was what Airbus dubbed an “adjustment” and led to an adjusted operating profit of €2.5 billion, up 118 percent from a year ago.
Other charges included €138 million for closing down production of the A380 super jumbo and €90 million of other costs, including compliance. The latter covers an internal inquiry into the use of middlemen for aircraft and other sales, Reuters reported.
Airbus Defence and Space reported a 25 percent fall in adjusted operating profit to €233 million from €309 million, reflecting investment in sales campaigns. Sales of the division rose eight percent to €5 billion, boosted by military aircraft.
That compares to total Airbus revenue of €30.9 billion, up 24 percent, helped by airliner sales.
ADS won a 33 percent rise in orders worth €4.2 billion compared to €3.2 billion, including a contract signed with the OCCAR procurement agency for service of the A400M airlifter in global support step 2, and a next-generation communications satellite on the Ka-band.
Orders for the helicopter division included Spanish procurement of 23 NH90 military transport helicopters. That deal led to net orders of 123 units, down from 143 a year ago.
The helicopter division reported adjusted operating profit of €125 million, down seven percent, on sales of €2.4 billion, down one percent.
On the A400M military airlifter, Airbus signed in the second quarter a contract amendment with OCCAR, a deal which took two years of negotiations. Airbus last year booked a further €436 million of charge, following a total of €7.2 billion of previous charges on the A400M.
The A400M contract agreement, dubbed global rebaselining, set new terms for a development plan for capabilities, new production delivery schedule, new timetable for retrofit and new financial terms.
In the financial terms, Airbus and OCCAR agreed “significant compensation in products and services” in exchange for dropping penalties for late delivery, the company said June 14.
In comparison, Boeing reported July 24 a loss of $2.9 billion in the second quarter, compared to profit of $2.2 billion a year ago. That loss was due to a grounding of the 737 Max airliner after two deadly crashes.
That quarterly loss followed a charge of $4.9 billion due to slower production of the troubled passenger jet, delayed delivery and related costs.
The featured photo shows an Airbus A400M during the Royal International Air Tattoo at RAF Fairford in 2016.
Credit: Australian Department of Defence
Four U.S. Air Force F-35A Lightning II aircraft, deployed from the 388th and 419th Fighter Wings, Hill Air Force Base, Utah, landed at Powidz Air Base, Poland, July, 16, 2019.
This is the first time that U.S. Air Force F-35A Lightning II aircraft have landed in Poland.
With the arrival in an exercise in Poland of F-35s, clearly the question is as well of not only the acquisition by Poland of F-35s, but building the infrastructure for operating F-35s and shaping an infrastructure to facilitate as well allied operations of the F-35 fleet operating by both the United States and allies in Europe and the Middle East.
The image of the plane operating from Poland is one thing, but the core capability of an integrated fleet would be its ability to shape an ISR, C2 and strike and defense belt over continental Europe.
This is an inherent potential of the F-35 fleet, a potential that will only be realized by the United States and its allies working through security and other challenges to unlock the inherent potential of the F-35 to operate as an integrated not interoperable fleet.
In a Mitchell Forum paper published in March 2019, Major Luke J. Harris and Col. Max M. Marosko III, USAF addressed the question of US and Allied F-35 interoperability.
We would go further that there is a unique historical chance facing the United States and its F-35 partners — namely to forge an integrated force.
This possibility is inherent in the technology, but will not happen without the political will, organizational reform and reworking of who the United States and its allies approach the broader security challenges.
As Harris and Marosko III concluded their paper:
There are few DOD programs better postured than the F-35 to improve allied warfighting capability and overall relationships. However, an F-35 pilot will only be an effective force multiplier if F-35 aircraft systems can communicate seamlessly with other F-35s, and other aircraft.
Future F-35-equipped coalition forces must operate with common TTPs and a shared mental model achieved through high-end training and tactics disclosure.
The United States has accepted a higher level of risk by selling advanced U.S. stealth and sensor technology to other nations, and trusting our allies not to disclose these capabilities. That trust is built on the mutual understanding that it is in our allies’ national interest to protect these capabilities.
The United States, likewise, needs to trust our allies with the intelligence, information, and proven best tactics and practices that were previously not releasable, so they can optimally employ the F-35 and provide value-added combat capability.
With American F-35s dispersed worldwide, the U.S. is absolutely dependent on regional allied capacity and capability to succeed in future combat operations.
To optimize allied F-35 interoperability, the U.S. must remove the security and policy barriers that inhibit this objective and smartly share intelligence, technical information, tactics, techniques, and operating procedures with our allies.
Only by doing this will America see the true potential of the F-35 as a revolutionary combat capability.
Clearly, the addition of Poland to the F-35 global enterprise would expand the fleets operational reach in a way that would make it central to deterrence in the neighborhood.
In an article we published last month on June 22, 2019, we discussed the potential acquisition of the F-35 by Poland.
During the recent visit of the Polish President and a high-ranking Polish delegation, many key defense issues were discussed with President Trump and his Administration.
Among those issues was the potential purchase of the F-35 by Poland.
According to an article published on the Polish Ministry of Defence website, this prospect was discussed.
“Soon Poland will join the elite group of states whose air forces have the most modern F-35 aircraft. I want this process to proceed quickly and effectively,” said Mariusz Błaszczak, the Minister of National Defence after meeting the command of the Eglin Air Force base in Florida and the F-35 pilots.
On June 10, the head of the Ministry of National Defence began his visit to the USA and visited the Eglin Air Force Base, where, among others he became acquainted with the F-35 development program – the latest – 5th generation aircraft.
“We are advanced when it comes to the process of acquiring this state-of-the-art equipment – F-35 fighters. This is a big breakthrough in the combat capabilities of Polish Air Force.
“This is a challenge, but it is such an element that will certainly deter the potential aggressor,” the head of the National Defence Ministry said.
The minister reminded that at the end of May this year Poland has sent letter of request regarding the purchase of 32 F-35A aircraft.
“We are already in the process, we as MoND have placed the letter and there have been several meetings between experts from the Polish and United States Air Force. So, we are talking, I am happy that we will finish this process quickly,” added the head of the National Defence Ministry.
As the minister pointed out, the era of post-Soviet equipment used by the Polish Air Force ends, and era of the fifth generation equipment and therefore the most modern one, begins.
The minister added that he wanted the Polish pilots, who belong to the world’s leaders, to have effective and safe equipment.
“The planned purchase of F-35 fighters fits into the creation of the entire system that deters a potential enemy. Earlier, I signed contracts for the purchase of Patriot and HIMARS systems,” said the head of the National Defence Ministry.
Note: Rapid Forge is a U.S. Air Forces in Europe-led mission to enhance readiness and test the ability to function at locations other than the main air bases.
POLAND
07.16.2019
Video by Senior Airman Sara Voigt
86th Airlift Wing/Public Affairs
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