Memorandum from MBDA Missile Systems
1. MBDA Missile Systems very much welcomes
the announcement of the Government's White Paper on Defence Industrial
Strategy, judging it as a very necessary and eagerly awaited addition
to the 2002 Defence Industrial Policy White Paper. The Company
also welcomes the recognition given to the importance of the UK
Defence Industry and the way in which its key strategic technologies
and capabilities contribute to the widely acknowledged effectiveness
of UK armed forces in operations around the world. Indeed, we
have congratulated the Minister for Defence Procurement and his
team on producing, so speedily, such a comprehensive piece of
work that will hopefully prove a watershed in UK Defence Acquisition.
2. MBDA, in conjunction with the MoD, put
considerable effort into producing a substantive proposal to help
inform the drafting process for the White Paper. We therefore
welcome it as a positive step on the road towards establishing
a sustainable UK Complex Weapons industrial capability, providing
affordable military capability to the UK Armed Forces for the
future. We are particularly pleased that the importance of the
sector and the need to retain appropriate sovereignty over its
vital contribution to the military capability chain has been recognised.
3. However, the challenge now of course
is to implement the Strategy in time to avoid seeing UK Complex
Weapons industrial capability going into decline and, as the paper
acknowledges, time is short. The way ahead for this sector requires
greater clarity when compared to other sectors. No industrial
leader has been identified, nor an MoD champion. The White Paper
proposes the establishment of a joint MoD and UK multi-disciplinary
industrial team (ref B7.51) that will, in turn, establish an effective
working strategy. However, there are neither details of this forum
nor, most importantly, of the authority it will be given to drive
through the changes required, not only across industry but also
within the MoD. Such authority is essential for successful implementation
of DIS in this sector.
4. From the industrial perspective, we believe
that there is a clear leadership role for MBDA, which has 68%
of "on-contract funding" for above-water complex weapons.
In anticipation therefore of being asked to take such a lead,
we had already started, ahead of the publication of the paper,
the process of engaging some of the other identified industrial
players in the sector. Our position as a quadri-national European
company also puts us in a unique position to work with the UK's
European partners, whilst we would welcome the opportunity to
similarly engage non-European/non-UK players.
5. As potential leaders of an industrial
team working together with the MoD, we would look forward to open
dialogue and to agreeing the route maps in both the Research and
Development and Capability domains which we believe will be required
if we are jointly to achieve the required affordable military
capability with improved through-life support. To that end, tempering
of competition in certain circumstances is most welcome and we
would also look to agree mechanisms with MoD, and other appropriate
Government Departments, to demonstrate long-term value for money.
6. We also judge that it would be significantly
beneficial to the successful implementation of the Defence Industrial
Strategy for a degree of cross-sectoral information exchange that
allows the sharing of best practice. We believe that industry
and MoD need to work together to devise a mechanism for such an
exchange, giving full consideration to commercial and IPR sensitivities.
7. Within this process we recognise the
fundamental requirement for industry to also play its part in
meeting the challenges, both in terms of re-structuring and of
behaviour. Clearly, we would look to take these issues forward
with our industrial colleagues, but in the meantime we have already
started a substantive pan-European MBDA cultural change and realignment
programme which is intended to better prepare ourselves to engage
in the open dialogue and other new ways of working which the paper
sets out.
8. In summary, there is no doubt that the
Defence Industrial Strategy White Paper presents a timely and
unique opportunity for the UK to enable a sustainable and affordable
Complex Weapons industrial capability. Within MBDA, we certainly
recognise this and we intend fully to play our part in the ongoing
processes, both by re-shaping our business model to meet the new
paradigms, and, particularly, in the early establishment and leadership
of a joint team. Much will depend on the latter and particularly
the authority it is given to take action. It will certainly need
to have made very positive progress within six months if vital
engineering industrial capability is not to go into irreversible
decline, and with it, UK sovereignty over Precision Effects, such
a vital element of the military capability chain. We don't see
that as being in the national long-term interest.
9. Finally, MBDA would be happy to attend
the Committee in order to provide oral evidence, should that be
required. If that were to be the case we would field Guy Griffiths,
MBDA's Chief Operating Officer (Operations).
January 2006
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