Defence Industrial Strategy – SBAC Response
(Source: Society of British Aerospace Companies, SBAC; issued Dec. 15, 2005)
The publication of Defence Industrial Strategy today (15) is an important development in the long-term relationship between Government, industry and the armed forces. It sets out the MOD’s future systems requirements, specifies those which must be retained in the UK for national security reasons and identifies the steps necessary to retain those industrial capabilities. This will include significant changes to acquisition processes and practices.

Commenting on the strategy document SBAC, Director General, Dr Sally Howes said, “SBAC welcomes the joint commitment of the Ministry of Defence (MOD), the Department of Trade & Industry (DTI) and the Treasury to the strategy. Industry has had the opportunity to contribute to the MOD’s thinking and will now expect a continuing involvement in its implementation.”

“Ensuring the UK armed forces have the equipment and support they need is industry’s top priority. We hope the Defence Industrial Strategy will lead to a re-assessment of MOD acquisition policies and look forward to the more open and transparent relationship between MOD and industry outlined in the strategy.”

“SBAC is encouraged by MOD’s commitment to through life capability management and its willingness to adopt new procurement models to secure better value for money. The Government’s recognition that a healthy defence sector needs to be profitable is particularly welcome.”

The defence industry is an important part of the UK economy, employing more than 305,000 high value and highly skilled people. The UK has one of the most open and competitive defence markets in the world and is the most successful exporter of defence equipment outside the USA.

SBAC is the national trade association representing suppliers to the civil air transport, aerospace defence and space markets operating in the UK economy. It represents over 2,600 companies, assisting them in developing new business globally, facilitates innovation and competitiveness and provides regulatory services in technical standards and accreditation.

At present, the UK has the world’s largest aerospace industry outside the USA. UK based aerospace activity had a turnover of more than £17bn in 2004, supporting a highly skilled workforce of over 255,000 people. (ends)

BAE Systems Welcomes Publication of Defence Industrial Strategy
(Source: BAE Systems; issued Dec. 15, 2005)
BAE Systems welcomes today the publication of the Defence Industrial Strategy for the United Kingdom. The Defence Industrial Strategy paper, published following consultation with industry, recognises the skills and capabilities that will be needed to equip and support the UK armed forces and ensure the defence industry remains a world-leading sector.

The Defence Industrial Strategy recognises the need for government and industry to work in partnership to secure the best technologies available, to meet the needs of the armed forces. It notes the strategic need for the UK to secure adequate control over any offshore technologies, to meet sovereign needs.

Mike Turner, BAE Systems Chief Executive Officer comments:

“We have been pleased by the level of engagement with UK defence industry during this exercise, led by the Defence Secretary, John Reid, and the Minister for Defence Procurement, Lord Drayson, and with the involvement of other government departments. We are very pleased to see that the Defence Industrial Strategy recognises the need to sustain, in the United Kingdom, the highest system integration skills and capabilities across air, land and sea domains. This is essential to deliver operational independence to the armed forces and to maintain the UK’s world-class defence industry.”

The key features for BAE Systems are:

--The creation of a much more open and transparent dialogue between the MoD and UK defence industry, enabling more effective planning of investment in people, skills, technologies and facilities

--An end to the boom and bust industrial cycle – a key step in securing a healthy, profitable and innovative UK defence industrial base

--A recognition that through-life capability will depend on long-term partnerships and a variety of contracting mechanisms and it stresses the need for affordable and value-for-money solutions to meet the needs of the UK armed forces

“The paper contains challenges for all of us – both in industry and in government. BAE Systems stands ready to rise to those challenges in the interests of ‘Team Defence,” said Mike Turner.

BAE Systems shares the view expressed in the Defence Industrial Strategy that there will be benefit from consolidation in this sector based the substantial forward core work load on complex surface ships, submarines and their support. The company recognises the challenge to deliver affordable platforms and support – especially on submarines.

BAE Systems and the MoD intend to work together to explore how a long-term partnership arrangement for the through-life availability of a significant proportion of the fixed-wing fleet might be delivered.

It was acknowledged that Unmanned Combat Air Vehicles (UCAVs) and Unmanned Air Vehicles (UAVs) will play a significant role in the future force mix and BAE Systems will work to secure an agreement in January with the UK MoD. The MoD intends to invest in a new technology demonstration programme in this key area and the company already has significant skills and experience in this domain. It successfully achieved the first fully autonomous mission of an unmanned aircraft in UK airspace, on 18 August 2005.

BAE Systems already provides support for 95% of the existing British Army inventory. This relationship will strengthen following the signature today of an in-principle partnering arrangement between BAE Systems and the UK MoD to support existing and future armoured fighting vehicles. The two parties will work to ensure effective through-life management of the fleet and this critical level of support will provide equipment that gives our forces the edge and keeps them safe.

BAE Systems’ aspiration is to take the leading role in the FRES programme. The company is evolving its land systems business in partnership with the MoD, to ensure it is in the strongest possible position to achieve this.

BAE Systems has major operations across five continents and customers in some 130 countries. The Company employs over 90,000 people and generates annual sales of approximately £14.8 billion through its wholly owned and joint-venture operations.


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