Select Committee on Defence Written Evidence

Memorandum from Matra BAe Dynamics (13 June 2000)


The Meteor Consortium

  Europe's leading Guided Weapons companies make up the Meteor consortium—Matra BAe Dynamics (UK and France), Alenia Marconi Systems (UK and Italy), CASA (Spain), LFK (Germany) and Saab Dynamics (Sweden). Between them, these companies have over 40' years experience in producing leading air launched weapon systems including ASRAAM, Storm Shadow, Magic, Mica, Sky Flash etc.

  Boeing is also a member of the consortium and will provide Meteor with a very real opportunity of being exported into the US. Boeing will also be able to look at the possible integration of Meteor on its existing platforms in service around the world including the F/A18 and F15. Importantly, all the technology, systems design authority and intellectual property rights will reside in Europe, ensuring no US Congressional veto on Meteor/Eurofighter exports.

The Governments

  Following its announcement on 16 May, the UK has now joined France, Italy, Germany, Spain and Sweden in selecting Meteor. All six nations will share the one-off cost of Meteor's development, thereby reducing the cost to the UK taxpayer. Although the exact percentage shares will not be finalised until a contract is signed between the nations later this year, it is anticipated that the shares will fall within the following ranges: UK 35-45%, Germany 20-25%, France 10-15%, Italy 10-15%, Sweden 10-15% and Spain 5-10%.

Meteor's Capability

  Meteor will meet the MoD's requirement for a Beyond Visual Range Air-to-Air missile for Eurofighter from the day it enters service. The Meteor/Eurofighter package will defeat all existing and emerging threats at a fraction of the cost of the US response—F22/AMRAAM. Meteor will have:

    —  a range of over 100 kilometres;

    —  Mach 4 performance;

    —  all weather capability;

    —  ram-jet propulsion providing optimum range and agile end game performance;

    —  in-flight two-way datalink update capability from launch aircraft or third party;

    —  interoperability between Europe's most advanced fighters—Eurofighter (UK, Germany, Italy and Spain), Raphael (France) and Gripen (Sweden).

Meteor Technology

  Although Meteor will be an entirely new missile, many of its key components will be a development of existing technologies. For example, the seeker will be an evolution of the system used in Mica/Aster; the Inertial Measuring Unit is based on the one used in ASRAAM, as is the electronics and power unit. Additionally, extensive development work has already taken place on the ramjet system, the electronics and power unit and the data link unit.


  Initially Meteor will create and sustain over 1,200 direct highly skilled engineering and manufacturing jobs in the UK—2,500 in Europe. However, with global exports the UK figure could increase to 2,500 jobs with 5,000 across Europe.

  The selection of Meteor by the UK Government will ensure the UK, and indeed Europe, will be able to develop the high technology skills required to create the next generation of guided weapon systems. This will enable MBD to provide genuine competition in a sector of the guided weapons market which has been dominated by the US for the last 30 years.

  The selection of a European missile will also ensure Eurofighter sales will not be subject to US Congressional Veto. This will provide a substantial boost to Eurofighter's export hopes, which could result in the creation of many more high technology jobs throughout the UK.

Smart Procurement

  Germany, France, Italy, Spain and Sweden have asked the UK to lead the Meteor programme. The UK MoD will manage the programme on behalf of the European MoDs using its procurement procedures. The UK MoD will contract with Matra BAe Dynamics (UK) who is the sole prime contractor for the whole programme. This will ensure risk is transferred from UK MoD to industry with MBD agreeing a fixed price contract. The price to the MoD will therefore not change and should any cost over-runs arise they will be borne exclusively by the Meteor team members. These steps are a unique and novel approach to the European procurement collaboration.



  Throughout the 1990s, the US's guided weapons industry underwent substantial change. In less than 10 years, the US's 12 major missile businesses merged into three: Raytheon, Lockheed Martin and Boeing.

  Europe's Guided Weapons business would only survive if it could effectively compete with its US competitors which to this day dominate the global market place—the US enjoys nearly 73% of the world market; it has nearly two-thirds of the European market; and approximately half of the total export market.

  The pace and extent of US consolidation and US's share of the global market were key drivers behind the subsequent consolidation in Europe.

Matra BAe Dynamics

  MBD has been the focal point for European consolidation. In 1996 Matra Défense (part of the Lagarde"re Group) and BAe Dynamics merged into Matra BAe Dynamics. Later this year, following the creation of BAE Systems and EADS, Alenia Marconi Systems and Aerospatiale Matra Missiles will be merged into MBD. Shortly after this the German missile company, LFK, will also join the company.

  The new company will be joint owned by BAE Systems (37.5%), EADS (37.5%) and Finnmecanica (25%). Its turnover, order book and payroll will double, making it the largest guided weapons company in Europe, second only to Raytheon in the world. It will have an order book of approximately £6 billion and will employ nearly 12,000 people in 14 sites in the UK, France, Italy and Germany (3,500 UK employees).

  The UK Government's decision to select Meteor will ensure the new company has a secure foundation, enabling it to retain and enhance the high technology skills required to develop the next generation of guided weapon systems. It will also help MBD to compete more effectively against its main competitors in the US.

Next Steps—the US

  Although the long-term success of Europe's missile industry will depend on its ability to compete in its home markets, it will also have to break into the world's largest market—the US.

  Ove the last 30 years, the US has effectively been closed to Europe's guided weapons industry while at the same time enjoying nearly two-thirds of the European market—in effect a one-way street. There are currently 18 US missile systems in service in Europe, 12 of these in the UK. To date the US has not bought a single missile from the UK.

  The Meteor team's decision to include Boeing as a partner was the first step to try and gain a foothold in the US market. Boeing has already had great success in introducing the Harrier and Hawk into the US market and MBD hopes it will have the same success with Meteor.

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