The Week in Perspective : March 12-19, 1999
Compiled by our staff from wire service dispatches and other sources
European Consolidation Update :

 Germany's Rheinmetall said Mar. 18 that it is combining its defense engineering unit Rheinmetall Industrie AG and its defense electronics unit STN Atlas Elektronik GmbH into a single company, Rheinmetall DeTec (Defense Technology) AG, which will have a 1999 turnover of approximately DM 3.1 billion (1,58 billion euro), and will employ 8,500 people.

 The European Commission announced Mar. 18 that it had received formal notification of the proposed merger of Aerospatiale and Matra Hautes Technologies on March 11. The Commission has 30 days to investigate the deal. Th Commission has not been formally notified of the British Aerospace/GEC Marconi merger, however.


Britain's GKN and Italy's Finmeccanica signed an agreement Mar. 18 to merge their Westland and Agusta helicopter businesses. They will split ownership of the new company 50/50, and will contribute their helicopter assets on a broadly debt and cash free basis."


The European Commission has approved the creation of a joint venture in the defense electronics field between Thomson-CSF and Racal Electronics, with each company owning 50%.



Week's Other News:


 The Swedish defense ministry confirmed Mar. 19 that the armed forces will be reduced by roughly half as a result of spending cuts agreed in February by the government coalition. Defense spending will be reduced by 1.5 billion US dollars by 2002, according to plans which will be submitted to Parliament on May 19.


Eurocopter on Mar. 19 denied press reports that it had been awarded a 100 million US dollar contract to provide eight Cougar utility helicopters to the Turkish national police, and said negotiations were continuing.


The German defense ministry on Mar. 18 denied press reports that Defense Minister Rudolf Scharping had threatened to resign over additional defense budget cuts planned by Prime Minister Gerhard Schroeder.


The Japanese Parliament began Mar. 18 to debate a series of bills that could significantly upgrade Japan's military role in regional security, and expand its military alliance with the United States.


The British, French and German ministers of defense will meet in Paris March 22 to discuss the future of the Horizon frigate project, a French defense ministry spokesman said Mar. 18. The meeting, which will review Horizon's industrial organization, could provide Britain with an opportunity to announce it is pulling out of the project.


A Gulf Cooperation Council member country has ordered Aerospatiale's Eryx anti-tank missile, the company announced Mar. 18. The buyer is believed to be the United Arab Emirates.


 Belarus' Beltechexport has won a 28 million US dollar contract to supply electro-optical equipment for the United Arab Emirates' BMP armored combat vehicles, Itar-Tass reported Mar. 18 from Abu Dhabi. It also quoted a Belarus official as saying that the UAE are evaluating the Volat 74135 tank transporter.


Indian Defense Minister George Fernandes told Parliament's Lower House Mar. 18 that India has undertaken a program to protect communication systems from electro-magnetic pulse (EMP) generated by nuclear explosions, China's Xinhua wire service reported. He also said that construction of two submarines, for which the government in 1997 earmarked 7 billion rupees (170 million US dollars) has not yet begun.


IDEX 99, the largest defense exhibition ever staged in the Persian Gulf region, closed Mar. 18 without any major arms sales contracts. Total deals announced during the show were worth 176 million US dollars, the organizers said.


The U.S. House of Representatives approved Mar. 18 a bill committing the United States to establishing a national ballistic missile defense system, which the Senate had approved March 17. The initiative was immediately criticized by China, North Korea and Russia, and mildly supported by Japan.


Japanese trade officials said Mar. 18 they will review French carmaker Renault's plans to buy a stake in Nissan Motor Co. to prevent any leak of sensitive defense information. Nissan produces multiple rocket launcher systems and mine-sweeping vehicles for the Japanese defense ministry.


Five days after Hungary joined NATO, a Hungarian company (Aeroplex) has won a 1.5 million pound sterling contract to repaint 14 Royal Air Force VC-10 tanker aircraft, the MTI wire service reported Mar. 17.


The projected cost of the F-22 fighter has grown by 667 million US dollars, and the F/A-18 E/F Super Hornet is not performing as well as advertised, according to Mar. 17 testimony by the U.S. General Accounting Office to the Senate Armed Services Air-Land subcommittee.


Airbus made a loss of 125 million pounds (204 million US dollars) in 1998, the Financial Times reported Mar. 17, partly because of provisions of 200 million pounds for potential losses on some aircraft sales.


Russia expects the first launch of its new Dnepr space launcher, jointly developed with Ukraine from the RS-20 intercontinental ballistic missile, to take place in April, Itar-Tass reported Mar. 17 from Moscow.


A court in Florida has sentenced two Americans to jail terms for a failed 1997 plot to smuggle 34 Canadian Army surplus UH-34 Kiowa light helicopters to Iraq, The Canadian Press reported Mar. 17.


South Africa's Denel is negotiating the sale of G-6 wheeled self-propelled howitzers and of anti-aircraft missile systems to Saudi Arabia, and of the G-6 to Kuwait and Qatar, Agence France Presse reported Mar. 16 quoting a Denel official at IDEX.


Russia's Rosvooruzhenie defense export company has beaten out competitors from Ukraine, China and Poland to upgrade 50 Egyptian Army SA-3 Goa (Pechora) air defense systems, Itar-Tass reported Mar. 16. Work on the contract, which will extend effective range of the missiles from 17 km. to 25 km., will start this year.


The Pentagon on Mar. 15 officially notified Congress that it proposes to sell 26 AMRAAM air-to-air missiles, worth 110 million US dollars, to Bahrein.


Uganda will return two Mi-24T combat helicopters to their supplier because they were not overhauled before being delivered, the New Vision newspaper reported Mar. 15. The helicopters, the first of a total fo four, were provided by Belarus through Consolidated Sales Corporation, a company registered in the British Virgin Islands.


Boeing plans to further cut 6,700 jobs in its commercial airplane division, the Associated Press reported Mar. 15, bringing total job cuts by the end of the year close to 38,000. Boeing announced in December it would reduce employment to between 185,000 to 195,000 by the end of 2000.


The British Ministry of Defence announced Mar. 15 that Jordan would buy a substantial number of Challenger 1 main battle tanks which are being retired by the British Army. Numbers and delivery dates have not yet been finalized, the deal could cover 200 or more tanks.


Russia's state-owned arms export agency, Rosvooruzheniye, earned two billion dollars in export contracts last year, Itar-Tass reported from Abu Dhabi Mar. 15 quoting company general director Grigory Rapota.


 The infrastructure necessary for the deployment of the S-300 air defense missile system on the Greek island of Crete is ready, and the missiles will be deployed by the end of March, Itar-Tass reported Mar. 14 quoting Greek Deputy Defense Minister Dimitris Apostolakis.


The UAE has for the first time officially hinted that it could pull out of a deal to buy F-16 fighters if the U.S. refuses to supply advanced source codes for the aircraft's electronic warfare systems. Sheikh Mohammad ibn Zayed al-Nahayan, the UAE chief of staff, said on Abu Dhabi television Mar. 14 that "We have special requests... If they are not met, then the UAE has other options in the international market."


Germany, which currently chairs the European Union, outlined plans to merge the EU with the Western European Union, and to set up a permanent EU military committee, during an informal Mar. 13 meeting of EU foreign ministers in Reinhartshausen. The EU is expected to adopt a new defence initiative in June.


The U.S. Navy will proceed with plans to privatize its weapons handling operations at its bases in the United States, the Associated Press reported Mar. 13. The program will outsource 80,500 jobs, and should save 8.5 billion US dollars by 2005.


Australian Defense Minister John Moore confirmed Mar. 13 that he has named an outside panel to review the Royal Australian Navy's controversial Collins-class submarine project.


Defense Ministers Georgi Ananiev of Bulgaria and Nikola Kljusev of Macedonia signed a defense cooperation agreement on Mar. 12, which Ananiev said "prepares the ground for intensive future cooperation between our states in the military sphere. Bulgaria announced it will give Macedonia 150 tanks and a similar number of 155 mm and 122 mm artillery pieces, worth a total of $3.5 million, Reuters reported Mar. 12.


The White House will bring together all U.S. federal space agencies in April to explore how the government can increase the commercial competitiveness of the U.S. space industry, United Press International reported Mar. 12. Participants will include NASA, the Federal Aviation Administration, the Pentagon, and U.S. industry.


US Air Force B-52 bombers could remain in service until 2045, and planning for their replacement may not start before 2013, Air Force Chief of Staff Gen. Michael Ryan told reporters in Washington Mar. 12. There are now 76 B-52s in the US Air Force active fleet. The first B-52 entered service in June 1955.


Slovakia's Cabinet has decided to cancel a contract to buy Russian-made S-300 air-defense missiles, Itar-Tass reported Mar. 12. The contract, initially worth 20 million US dollars, was signed in December by the previous government as part of a countertrade deal with Russia.


Aviation Week & Space Technology has been named one of the 1999 "Best of the Business Press'' by Advertising Age's Business Marketing magazine, McGraw Hill announced Mar. 12.


The former Soviet republic of Belarus will strengthen its forces in collaboration with Russia to counterbalance the admission of three former Soviet bloc states to NATO, Agence France Presse reported Mar. 12 quoting President Alexander Lukashenko.


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