By Adam Dempsey, Research Associate, UK Defence Forum

Back in February I decided to relauch one of Viewpoints lesser known sister publications. National Defence Industry Extra (NatDefIndEx) aims to provide news and analysis of developments from the global defence sector.

Since then, the blog has gone from strength to strength. Articles have covered the re-emergence of Poland's defence sector, Israeli defence-industrial strategies and Dassault's continuing efforts to find an overseas buyer for the Rafale. NatDefIndEx has even published articles from as far away as India and Kuwait.

I am currently on the look-out for more articles. As with Viewpoints, articles need to be between 300 and 1,500 words in length on defence-industrial issue of your choice. As I have recently steered NatDefIndEx more towards overseas markets I would particularly welcome articles covering the British defence sector.

Articles can be submitted to adam.dempsey@ukdf.org.uk . And follow me on Twitter at NatDefIndEx .

The Government has today launched a Green Paper which marks the formal consultation on Equipment, Support and Technology for UK Defence and Security.

The consultation, led by the Ministry of Defence and Home Office, will cover a range of issues, including national security, working with other countries, exports, small & medium-sized enterprises and cyber security. This is the first time these key issues have been considered together from both a defence and security perspective.

The Green Paper provides details of the consultation which will last for three months, commencing in the New Year. This will lead to a White Paper, published in Spring 2011, which will set out the Government's approach to industry and technology policy in the defence and security domains over the next five years.

Minister for Defence, Equipment, Support and Technology, Peter Luff said:

"To ensure our Armed Forces have the equipment and support they need, industry requires as much clarity as possible to plan its investment in research and production. The Strategic Defence and Security Review made clear that this consultation is an opportunity for industry and the public to help us shape how we deliver some of the vital components of our national security."

Security Minister Baroness Pauline Neville-Jones said:

"As we said in the Strategic Defence and Security Review, Government needs to be smarter in the way that we meet the challenges to national security. Defence and security go hand in hand in many areas, which is why we are increasingly joining efforts to deliver solutions."

By Nick Watts

The government's proposed Defence Industrial Technology Policy (DITP) will be published in December. Or rather, it will be the basis for a discussion between industry and government. Both sides have much at stake, so the outcome is important. Getting the right answers means asking the right questions. The government and the MOD each need to ask three questions when formulating the DITP:

How can the UK secure the necessary operational sovereignty to guarantee the provision of key strategic capability into the future?How best can the government partner with industry to ensure the continuation of a viable defence sector in the UK?How can the government help the UK's defence sector to explore and exploit opportunities in the export market?

 For its part Industry also needs to collectively consider three questions, as it engages with the government and MOD:

How will industry adjust to the stated aim of MOD to reduce the number of operating platforms: how will this enable the UK to retain a viable defence industry? To what extent can exports help pull through programmes for the UK market?How can industry help MOD reform its acquisition process, to ensure that programmes get developed quickly and that equipment is delivered on time and on budget?

The DITP will be a Green Paper, a discussion document. This is intended to guide the subsequent discussions so that a White Paper can result. The White Paper will represent the government's settled view on the future of the MOD's industrial and technology policy for the life of this parliament, and at least until the next SDR in 2015. In the context of the SDSR and the CSR, there is much gloomy talk in the air. Yet both sides of this discussion have a mutual interest in ensuring that the other survives to fight another day.

The context, while not promising could be a lot worse. After the fall of communism the subsequent peace dividend took its toll on both the armed forces of the west and the defence industry. The notorious "Last supper" of 1993 encapsulated this. US Defence Secretary Aspin told the leaders of the 15 largest US defence contractors that the DOD was not going to solve industry's over capacity problem. The result was a wave of consolidation which has produced stronger contractors now. In Europe and the UK a similar series of consolidations took place.

The world in 2010 is far different from 1990, when policy makers were trying to get their heads around what the changes of 1989 meant. The SDSR set the context within which the industrial and technology questions need to be considered. The arithmetic of the CSR is another factor affecting the DITP. The contemporary setting does not allow the laissez faire approach adopted by Les Aspin in 1993, however much the government may wish.

Articles taken from Flight International Magazine.

1st November: Lockheed Martin eyes common architecture for F-35, F-22
Lockheed Martin is looking at revamping several of the F-22's most critical systems with hardware from the F-35.

The initiative would create a common architecture that links upgrades of the radar, electronic warfare suite and communications, navigation and identification (CNI) system to both aircraft.

3rd November: Lockheed's F-35 faces second restructuring this year
Facing a new round of cost overruns and schedule delays, the Lockheed Martin F-35 programme will finish the final two months of 2010 in much the same way as it opened the year.

One more year of development and an extra $5 billion may be added on top of previous extensions, according to the preliminary findings of a major F-35 review leaked by the Center for Defense Information (CDI), a well-connected think-tank.

12th November: F-35 cuts 'could slash US budget': report
The US government could save about $58 billion by slashing four major aerospace and defence accounts, a presidential commission advises in a draft proposal released on 10 November.

15th November: F-35B flies with Block 1.0 software
Lockheed Martin has flown an F-35 flight test aircraft with the third of five major blocks of software for the first time. The advance represents a key step, as the programme has struggled to deliver an estimated 11.6 million lines of code demanded by fusing the aircraft's advanced sensors and avionics.

22nd November: Latest deal for 31 F-35s shows slight price decline
Lockheed Martin has finalised a nearly $3.5 billion contract to deliver 31 more F-35s at a slightly lower price than last year.

The contract award, announced late on 19 November, is a key boost for Lockheed's F-35 production programme as top Department of Defense officials are scheduled to meet on 22 November to review possible new delays and cost overruns on the development side.
The $3.5 billion award is the third contract Lockheed has received as part of the fourth lot of low-rate initial production (LRIP-4), which will be delivered in fiscal year 2013.

22nd November: Fatigue cracks raise questions about key decision in F-35 redesign
Lockheed Martin has discovered fatigue cracks on an aluminium bulkhead inside a ground test aircraft for the short take-off and landing F-35B variant after 1,500h of durability testing.
25th November: F-35 production cost fall highlights pressures facing Lockheed
With the development phase of the Lockheed Martin F-35 under close scrutiny by US Department of Defense officials, a long-awaited contract award shows that production costs are falling, while the risks are shifting from the government to the contractor.

A $3.5 billion contract awarded on 19 November completes the orders of 30 F-35s from the USA and one from the UK in the fourth annual lot of low-rate initial production, or LRIP-4. Two other deals awarded earlier for LRIP-4 aircraft raise their total cost to $4.6 billion, or about $148 million each.

A|D|S, the UK's AeroSpace, Defence and Security trade organisation yesterday commented on the signing of a defence treaty between UK Prime Minister David Cameron and French President Nicholas Sarkozy.

Ian Godden, Chairman of A|D|S, said:

As the natural partner to both Governments, with an existing strong element of cross-Channel co-operation, the UK-based defence industry welcomes today's treaty. This agreement may well prove crucial to both retaining and developing future capabilities within Europe by ensuring sustained investment in research and technology (R&T) - to deliver the next generation of programmes for our armed forces. The alternative, buying off the shelf from the US, is often not the appropriate solution for our troops and this development ensures that future governments will retain a choice of suppliers both UK-based and from overseas that meet the needs of our armed forces.

The UK is number one in Europe and second only to the US worldwide in terms of global defence exports market share. The UK defence sector employs over 300,000 people, generates more than £35 billion per year to the UK economy and last year our defence exports were worth £7.2 billion. Retaining a manufacturing base of this scale in Britain will sustain this economic strength for the long-term and ensure a continued competitiveness in the global market to meet the aims of the Government to grow our economy through exports.

Joint R&T programmes that lead to collaborative procurement programmes can be an efficient way of delivering capabilities to our armed forces that might not be affordable on a purely national basis. The conditions for co-operating with French industry have never been better. Both countries are seeking to sustain capabilities which they could otherwise not afford. Our R&T budgets are of similar size and we are engaged in similar operations which require similar capabilities. We look forward to joint programmes that will benefit from the efficiencies that flow from larger scale purchases and sustain skills and technology.

Diesel generators have now been installed on the first of the new aircraft carriers. Both ships will have two Rolls-Royce MT30 gas turbines and four diesel generator sets. The generators – provided by Converteam – provide a total power of 109 megawatts. The latest edition of Desider indicates that power will be generated to distribute electricity throughout the vessel powering anything from the propulsion system to crew members' laptops.

Another £33 million worth of contracts have also been recently awarded. These include:

- An £18 million contract for storage facilities to Wincanton.
- A £15 million contract for Balfour Beatty Engineering Services for the installation of cables on modules being constructed at Govan before final integration at Rosyth.
- A £44,000 contract for Edmundson Electrical to provide component parts used to pack and make airtight cables running throughout the vessels
- A £137,000 contract to Jetway Associates to supply hose baskets, which form part of the ships' fire fighting equipment.

According the Aircraft Carrier Alliance around £1.25 billion worth of contracts have been placed throughout the UK, which in turn are supporting thousands of jobs in almost every region.

Regional involvement in the development of the carriers was further enhanced as the final shipyard in the programme started its part of the construction work. Birkenhead-based Cammell Laird will build tow sections of the ships' flight deck. The work is worth over £44 million pounds and will keep a workforce of 1,200 busy until 2012. Upon completion the flight decks will be the size of three football pitches.

Commencing construction was especially significant for Cammell Laird as it marked the return of shipbuilding to the yard after a 17 year hiatus. Yet the company is by no means a stranger to carrier construction, having provided three throughout its illustrious 182 year history.

The Birkenhead shipyard joins five others – Govan and Rosyth in Scotland, Portsmouth, Devon and Newcastle in England – in the massive construction project. Work currently supports around 10,000 jobs at the shipyards and throughout the supply chain.

Despite the increase in debate over the cost of the aircraft carriers in the run-up to the publishing of the Strategic Defence and Security Review work continues unabated.

Guy Anderson, editor and lead analyst, Jane's Defence Industry

The United Arab Emirates is one of the world's true "frontier" defence markets. It is courted by Western firms seeking to offset slumping spending at home; emerging exporters like South Korea seeking to establish a foothold beyond their own borders; and Russia and China under their arms-for-energy-access strategies.

A precarious geographical position, buoyant oil revenues and strong defence expenditure growth (military funding leapt 276 per cent between 2001 and 2010)[1] make the UAE an attractive prospect. There is both the means and the rationale to continue spending on national defence.

The UAE, meanwhile, knows its value to the world market and is looking for a healthy return on its investments. It is looking to defence expenditure to help overcome two pressing problems: firstly, the twin demographic challenges of a young population in need of meaningful employment and a strong reliance on foreign labour (20.9 per cent of UAE nationals were under the age of 15 in 2008 and 73.9 per cent of those of working age were non-nationals)[2] and, secondly, continued high reliance on oil revenues (oil exports accounted for 40 per cent of GDP in 2008).[3]

It is unsurprising that the UAE overhauled its offset regime this year [2010] in order to maximise the social and economic returns on its investment in military materiel.

The reforms have created numerous challenges for foreign industry, however, and may yet backfire by alienating the very firms which the UAE is seeking to work with. Indeed, there have been reports that international defence trade associations are considering sending a jointly-signed letter to the UAE's offset bureau to vent their frustrations (there is a precedent - a similar letter on a similar subject was recently despatched to India)[4].

Articles taken from Flight International magazine

16th August: Fix for F-35 final assembly problem pushed back

Lockheed Martin has pushed back the resolution of a manufacturing problem plaguing F-35 Joint Strike Fighter final assembly schedules, but key suppliers are making progress building components as the programme prepares for the next leap in production orders.

In October 2009 government audit reports showed that Lockheed expected to eliminate the "wing-at-mate overlap" problem for the F-35's four-piece wing with final assembly of BF-13, the thirteenth short take-off and vertical landing (STOVL) in production.

The overlap means that key parts are delivered after the wing has entered final assembly, requiring workers to partially disassemble the structure.

The Defense Contracts Management Agency (DCMA) identified the resulting delays and inefficiency in the wing manufacturing process as one of the key drivers for production delays ranging from four to six months during the first two years of low-rate initial production (LRIP).

17th August: F-35 targeting system enters flight-testing on CATBird

A new sensor for the Lockheed Martin F-35 targeting system has entered flight tests aboard a surrogate aircraft.

The electro-optical targeting system (EOTS), developed by Lockheed's Missiles and Fire Control division, is being tested aboard the BAE Systems co-operative avionics test bed (CATBird).

The tests on the Boeing 737 modified with the F-35's cockpit and flight-control surfaces is the final step before integrating the passive targeting system on BF-4, the flight-test aircraft for the short-take-off and vertical landing variant dedicated to mission systems testing.

The EOTS is installed under the F-35 cockpit and tucked inside a faceted, low-observable turret. Its job is to lock on to targets visually, especially when the F-35 is unable to use radar.

By Jeffrey Bradford
(this is an edited version of a post made on Defense Industrial Base)

The Financial Times recently published three articles by Sylvia Pfeifer about the decision of defence support services company VT Group to divest its shipbuilding arm, currently in a joint venture with BAE Systems, through the use of a put option on its disposal to the largest defence contractor in the United Kingdom (see "VT to double in size after strategy shift" and "VT signals sale of shipbuilding arm" and "VT sells shipbuilding business" on January 28th and 29th 2009).

VT Group is in a strategic bind. The exchange rate challenges of a US operation at ($2:£1) have reduced. The sale of the shipbuilding business would provide a healthy cash injection, while the current market makes lending for M&A challenging, and VT Group a possible acquisition target.

The business mix makes the business quite attractive to players such as Serco, whose defence business has languished over the past few years, and Babcock International Group (for whom in particular the business is a mirror image of its own). It would seem an unlikely target for a major contractor due to the plethora of non-defence activity which would be hard to absorb.

The best outcome for VT Group could be a merger with a support services business of similar scale and cultural fit. For VT Group to pursue a series of small acquisitions which would push it to above £1 billion in annual turnover is arguably an inefficient use of capital in such times as these.

Still, acquisitions to use up the cashpile could be a positive spur for someone sensible to make a merger approach.

The Secretary of State for Defence (Rt Hon John Hutton) said today: We have decided to procure three instrumented test aircraft and associated support equipment to enable UK participation in the joint Initial Operational Test and Evaluation (IOT&E) of the Joint Strike Fighter (JSF) Air System alongside the US Services, and to continue our contributions to the

Production Sustainment and Follow-on Development (PSFD) Memorandum of Understanding (MOU).