The Weekly Wire: For Your Situational Awareness 7/9/2020
As Brazilian Gripen Productions Provides Proof of Concept, Next Steps Remain Uncertain
Hamilton Cook, Research Associate
On July 7, Brazil officially began manufacturing aerostructures for its fleet of Gripens from a new facility in Sao Paulo. This is seen as a major success for not only the country’s industrial development, as it will provide fuselages and tail cones for both the Embraer final assembly plant in Sao Paulo and for the main Saab production in Sweden, but also for Saab who will now be able to point towards a successful performance on technology transfer and industrial development.
Saab won the Brazilian future fighter competition for 36 jets for these exact reasons. When the contract was awarded in 2014, it was known that Saab had bid very aggressively on technology transfer and industrial participation. Not only did Saab offer to set up manufacturing facilities in partnership with Embraer for the production of the Brazilian Gripen E/Fs, but Saab also gave Brazil positions on the baseline Gripen itself while positioning the country as a sales hub for an aircraft seemingly suited to the Global South.
Some of those loftier sales goals, however, have met some challenges over the last six years as Saab has suddenly become caught in the awkward middle of the fighter market. The Gripen’s straightforward sales targets in Eastern Europe have been dashed by a United States administration that associates big allies with big arms sales, directing countries like Slovakia and Bulgaria to updated models of the venerable F-16 or larger buyers to an F-35 rapidly declining in price. Additionally, India’s potential use of the Strategic Partnership model for the next edition of its medium fighter acquisition program, may reduce Saab’s ability to differentiate the Gripen on tech transfer alone. Meanwhile, the Gripen now faces a rapidly expanding light fighter market that threatens to undercut the Gripen’s position as the affordable alternative. There, the Gripen will not only have to face the onslaught of next-generation, high-end trainer/light fighters backed by major OEMs, such as the T-50/FA-50 and the T-7, but also the emergence of indigenous fighter aircraft, like the HAL Tejas or PAC JF-17 that are far less capable than the Gripen but are now beginning to undercut the Gripen on price in order to stave off a competition.
Does this portend doom for the Gripen E/F? Absolutely not. The past decade alone provides us with plenty of examples of fighters that were ostensibly stalled in the export market, only to make sudden, rapid recoveries, the most notable of which was the Rafale’s rapid ascent into Indian and Middle Eastern marketsThough with a healthy backlog of Swedish and Brazilian orders, Saab will still retain the flexibility that has allowed it to serve a wide variety of non-traditional fighter customers.
On July 2, the budget committee of the German Bundestag earmarked $1.1 billion (€1 billion) for a range of defense acquisitions and upgrades. These include:
- Acquisition of three SIGINT aircraft based on the Bombardier Global 6000, worth $84.6 million (€75 million). These aircraft will be fitted with the Integrated Signals Intelligence System, restoring an airborne SIGINT capability to the German military in 2025.
- Upgrade of 170 Patriot missiles to ensure a sufficient stock of ammunition for the Very High Readiness Joint Task Force (VJTF), worth $240.5 million (€213 million). The VJTF is a NATO program to stand-up a contingent of several thousand soldiers that can be deployed within days.
- Acquisition of 1,818 guided rockets for the M270 MLRS (German designation MARS) worth $313.9 million (€278 million).
- Acquisition of 24 Leguan bridge-layers to replace older Biber bridge-layers, worth $372.6 million (€330 million).
- Upgrade of over 400 Boxer IFV’s by adding cameras to improve driver situational awareness, worth €69 million. This will allow the Boxer to be operated on public roads.
On July 1, the Australian Department of Defence released the 2020 Defence Strategic Update and the Force Structure Plan. Together, these documents shed light on Australia’s future national defense strategy and anticipated defense investments. The 2020 Defence Strategic Update outlines three novel strategic goals: to shape Australia’s strategic environment; to deter actions against Australia’s interests; and, to respond with credible military force when required. The document also acknowledges that, though unlikely, the prospect of widespread conflict in the Indo-Pacific region is higher than in 2016, when the Department of Defence published its last white paper. This confluence of geopolitical realities and bold strategic initiatives sets the stage for a series of ambitious modernization proposals estimated at roughly $188 billion (USD) over the next decade.
The 2020 Force Structure Plan breaks down major Department of Defence investment initiatives by land, air, maritime, cyber, and space domains. Of these, the maritime domain is set to receive the most funding over the next decade. Defence anticipates maritime investments totaling upwards of $52 billion (USD), with significant funding allocated to submarine construction, maritime guided weapons development, and mine warfare capabilities. The air and land realms are expected to attract considerable funding throughout the 2020s as well, with totals estimated at roughly $45 billion (USD) and $38 billion (USD), respectively. Substantial aerial funding is allocated to hypersonic weapons research, P-8A and E-7A Wedgetail upgrades, and UAV acquisition, while key army investments include new land combat vehicles upgrades and acquisitions. The cyber and space fields are also slated to garner considerable attention over the next decade, with total investments estimated at $10 billion (USD) and $5 billion (USD), respectively.
In June, the French government launched a €15 billion ($16.8 billion) recovery plan to stimulate the defense and aerospace sector. As part of this, the French armed forces will notably benefit from a new batch of eight H225M rotorcraft, worth approximately € 300 million ($336 million). This future procurement is more than welcome as the Air Force suffers from stretched fleets and low availability rates; however, they still intend to lease a batch of 8-10 heavy transport helicopters .
The French Navy will also witness earlier deliveries of the vertical takeoff and landing VSR700 unmanned aerial system (UAS) designed by Guimbal Helicopter and Airbus, as part of the SDAM program (Airborne Drone System of the Navy) to be deployed on future FDI and FREMM frigates. Airbus’s Aliaca mini-fixed UAS for maritime ISR missions will be based on future offshore patrol vessels and will also benefit from a procurement boost as part of the SMDM program (Small Embarked Drone System of the Navy).
Over the last two weeks, two new light combat vehicles from the Middle East and North Africa made their official appearance. The first one branded “Barb” is an indigenously built mine resisted ambush protected vehicle developed in Tunisia and was unveiled by the Ministry of Defense during the 64th anniversary celebration of the Tunisian Army. With a V-shaped hull design to protect against IEDs, it has an open turret and can be equipped with a 12.7mm heavy machine gun. Further developments are still expected, notably to improve its passenger capacity, design, and endurance.
More importantly, this is another highlight of the Tunisian Ministry of Defense’s willingness to nurture its local industry base and become more independent. This follows in line with recent ground robots deployed during COVID-19 Tunisian lockdown and the Al-Istiklal class offshore patrol vessels which entered into active duty in 2018. If future trials and firing tests are successful, a production agreement for Barb series production could be expected in the coming years. In that case, the Barb would complement Tunisia’s MRAP fleet, which currently is comprised of US and Turkish vehicles.
On the other side of the region, the Ministry of Defense of the Kingdom of Saudi Arabia signed a production agreement with the state-owned company SAMI to start production of the Al Dahna. Presented for the first time in 2018, this 4×4 light tactical vehicle is expected to be entirely made in Saudi Arabia, as part of the Kingdom’s Vision 2030 and its intent to diversify its assets from the oil industry. With this upcoming indigenous program, Saudi Arabia consolidates its industrial footprint, already initiated with locally license-produced light armored vehicles from Western OEMs and will join other regional producers based in the UAE, Turkey, Egypt, Jordan, and Qatar.
On July 6, the United States Department of State announced that it had approved a potential sale of eight MV-22 Block C Osprey aircraft to Indonesia. The contract is valued at $2 billion and includes an array of additional equipment including radar systems, IFF systems, missile and radar warning receivers, and countermeasure systems. The new rotorcraft will most likely be sent to the Indonesian Army, which had previously been considering the MI-26 and the CH-47 to meet its need for new utility rotorcraft. The sale is intended to bolster Indonesia’s ability to conduct humanitarian missions and amphibious operations.
The new MV-22s will most likely replace Indonesia’s aging inventory of Bell helicopters. However, the contract has yet not been signed and will likely change prior to being finalized, especially since the $2 billion contract value is very high for Indonesia relative to other acquisitions and the DSCA often approves an acquisition for its maximum value. It should also be noted that the Indonesian Air Force still has an unfilled vertical lift requirement, as it will need to soon replace its NAS330 and NAS332 aircraft.