The Weekly Wire: Week of 8/31/15
In a continuance to a deal that began over 16 months ago, it appears that Saudi Arabia is set to receive 79 high speed interceptor craft from French Shipyard Couach, subcontracted from German shipbuilder Lürssen. The interceptor craft are 15 meters in length, and will go directly to the Saudi Arabian Coast Guard. The apparent resolution to a long-rumored deal is noteworthy. In February 2014, reports surfaced that Germany had agreed to a €1.4 ($1.6) billion deal with Saudi Arabia for the production and delivery of 146 patrol craft. As more details surfaced in the months that followed, it appeared that German shipbuilder Lürssen had begun to build some of the ships for the Saudi Coast Guard. Under consistent pressure from many in the German government to cease arms exports to Saudi Arabia, the patrol craft contract has transitioned to French shipyard Couach, where it is reasonable to assume that the remainder of the work will be completed. For Saudi Arabia, the eventual delivery of the German-French interceptor craft will add to a growing fleet of naval patrol craft, including incoming deliveries of American vessels and additional French-built boats.
Oshkosh was awarded a $6.7b contract for initial production of the Joint Light Tactical Vehicle (JLTV). The JLTV will replace the current fleet of Humvees operated by the US Army and Marine Corp with a vehicle that is both lightweight and more survivable. In total, the Army plans to acquire 49,100 vehicles by 2040, while the Marines will execute a smaller buy of 5,500 vehicles by 2022, putting the programs total value at near $30b. AM General, maker of the Humvee, and ground vehicle newcomer Lockheed Martin, had both competed for the award and are widely expected to protest the decision. The JLTV award is one of few opportunities in the U.S. ground vehicles market, which has been declining since the drawdown of forces in Iraq and Afghanistan. Avascent Analytics projects the US ground vehicles market to be with worth approximately $6-7b a year between 2015 and 2025, with JLTV accounting for nearly 20% of the market.