DeaconBlue
16th Aug 2005, 12:40
Is this going to scupper the program or just the chances for the french??
Boeing Shakes Up Thales Bid for U.K. Training
By ANDREW CHUTER, LONDON
Just days before three consortia are expected to bid on a 14 billion pound ($25.4 billion) contract to train British military air crews, Boeing has shaken up its partnership with Thales UK, switching from investor to supplier — a move that could undermine the U.S. giant’s efforts to increase its presence in the U.K. market.
The world’s No. 1 aerospace company had intended to join Thales as a 50-50 equity partner to bid for the Military Flying Training System (MFTS) contract. A Defence Procurement Agency effort, MFTS is intended to use a mix of Public Finance Initiative (PFI) and conventional acquisition techniques to provide all air training for the U.K. military from 2007 to 2032.
But Boeing told Thales in late July that it wanted to join the consortium, dubbed Sterling, as a supplier, not an investor. One company executive said Boeing’s leaders had balked at the level of investment required.
“It’s great MoD is taking this approach, but this is new territory and as we got closer and closer, we couldn’t make a good business case for a pure partnership and it made more sense to us for Thales to take the lead and us to play a smaller subcontractor role,” the executive said. “It wasn’t shaking to be 50-50. It started to look more like we could provide niche areas and them taking the lead.”
Boeing’s decision seems to rob the company of a chance to build its asset base in Britain. The Chicago-based firm has secured a series of big-ticket contracts here in recent years on programs such as the Nimrod MR4 patrol plane, the E-3 Sentry AWACS aircraft, the C-17 transport, and Chinook and Apache helicopters.
But Boeing has little defense industrial presence in the United Kingdom to show for it — just one training-services joint venture with AgustaWestland that supports the British Army’s Apache operations. By contrast, major U.S. rivals General Dynamics, Lockheed Martin and Raytheon and others all maintain a sizeable industrial presence here.
Boeing admitted it may have to change its thinking if it wants to secure a prime position on the Army’s Future Rapid Effects System (FRES) armored vehicle program. In June, company officials said investment or acquisition here could be catalyzed by a FRES deal along the lines of its U.S. Army contract for the Future Combat System.
A company spokesman Aug 12 said Boeing was “firmly committed to the U.K., which remains an important market for us.”
Sterling’s Prospects
The Sterling bid will go to the procurement agency by the Aug. 23 deadline with Thales UK as the sole equity partner and Boeing as a supplier, Sterling program director Vince Smith said Aug. 11.
Smith said that if Sterling wins, Thales may seek more equity partners among the firms that win MFTS subcontracts, whether awarded by the MoD or the contractor or a combination of both.
Smith confirmed that Sterling officials have talked with several potential suppliers, including QinetiQ and Serco Defence, which reinforced its PFI credentials on Aug. 11 by announcing its selection as preferred bidder for a 400-million-pound strategic partnership with the MoD’s Defence Science and Technology Laboratory.
Boeing Shakes Up Thales Bid for U.K. Training
By ANDREW CHUTER, LONDON
Just days before three consortia are expected to bid on a 14 billion pound ($25.4 billion) contract to train British military air crews, Boeing has shaken up its partnership with Thales UK, switching from investor to supplier — a move that could undermine the U.S. giant’s efforts to increase its presence in the U.K. market.
The world’s No. 1 aerospace company had intended to join Thales as a 50-50 equity partner to bid for the Military Flying Training System (MFTS) contract. A Defence Procurement Agency effort, MFTS is intended to use a mix of Public Finance Initiative (PFI) and conventional acquisition techniques to provide all air training for the U.K. military from 2007 to 2032.
But Boeing told Thales in late July that it wanted to join the consortium, dubbed Sterling, as a supplier, not an investor. One company executive said Boeing’s leaders had balked at the level of investment required.
“It’s great MoD is taking this approach, but this is new territory and as we got closer and closer, we couldn’t make a good business case for a pure partnership and it made more sense to us for Thales to take the lead and us to play a smaller subcontractor role,” the executive said. “It wasn’t shaking to be 50-50. It started to look more like we could provide niche areas and them taking the lead.”
Boeing’s decision seems to rob the company of a chance to build its asset base in Britain. The Chicago-based firm has secured a series of big-ticket contracts here in recent years on programs such as the Nimrod MR4 patrol plane, the E-3 Sentry AWACS aircraft, the C-17 transport, and Chinook and Apache helicopters.
But Boeing has little defense industrial presence in the United Kingdom to show for it — just one training-services joint venture with AgustaWestland that supports the British Army’s Apache operations. By contrast, major U.S. rivals General Dynamics, Lockheed Martin and Raytheon and others all maintain a sizeable industrial presence here.
Boeing admitted it may have to change its thinking if it wants to secure a prime position on the Army’s Future Rapid Effects System (FRES) armored vehicle program. In June, company officials said investment or acquisition here could be catalyzed by a FRES deal along the lines of its U.S. Army contract for the Future Combat System.
A company spokesman Aug 12 said Boeing was “firmly committed to the U.K., which remains an important market for us.”
Sterling’s Prospects
The Sterling bid will go to the procurement agency by the Aug. 23 deadline with Thales UK as the sole equity partner and Boeing as a supplier, Sterling program director Vince Smith said Aug. 11.
Smith said that if Sterling wins, Thales may seek more equity partners among the firms that win MFTS subcontracts, whether awarded by the MoD or the contractor or a combination of both.
Smith confirmed that Sterling officials have talked with several potential suppliers, including QinetiQ and Serco Defence, which reinforced its PFI credentials on Aug. 11 by announcing its selection as preferred bidder for a 400-million-pound strategic partnership with the MoD’s Defence Science and Technology Laboratory.