Memorandum from Matra BAe Dynamics (13
June 2000)
1. METEOR
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;
— 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.
Employment
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.
2. CONSOLIDATION
OF EUROPE'S
GUIDED WEAPONS
INDUSTRY
Background
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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