Over­ca­pac­ity sti­fles Europe’s de­fence in­dus­try

Lesotho Times - - International -

Mr Obama, of course, has ad­dressed the is­sue of racism be­fore, es­pe­cially in his speeches and writ­ings be­fore he be­came pres­i­dent.

Dur­ing his 2008 cam­paign, amid scru­tiny of provoca­tive state­ments by the pas­tor of a black church Mr Obama had at­tended, he said: “The is­sue of racism can­not be ig­nored.”

Since com­ing to of­fice, Mr Obama has dis­ap­pointed some with cau­tious, im­per­sonal re­sponses to in­ci­dents that African Amer­i­cans felt showed their on­go­ing per­se­cu­tion.

But he got very per­sonal in ad­dress­ing the case of un­armed black teen Trayvon Martin, who was shot dead by a neigh­bor­hood watch­man, say­ing Martin “could have been me 35 years ago.”

And be­fore last week’s slaugh- PARIS — Europe’s politi­cians need to put aside na­tional pride and se­cu­rity sen­si­tiv­i­ties and let the de­fence in­dus­try tackle the over­ca­pac­ity that has led to com­pet­ing pro­duc­tion of tanks and fighter jets, ex­ec­u­tives and EU of­fi­cials say.

The in­dus­try’s out­look is bright­en­ing, helped by a stronger econ­omy, in­creased mil­i­tary spend­ing in other re­gions driven by ten­sions in Ukraine, the Mid­dle East and South­east Asia.

France’s Das­sault, for ex­am­ple, reached deals this year to sell fighter jets to Egypt and Qatar and hopes to con­clude a sale to In­dia soon, com­pen­sat­ing for fall­ing de­mand at home.

But Europe has failed to fol­low the ex­am­ple of the United States, where the de­fence in­dus­try be­came more ef­fi­cient af­ter a down­turn caused by the end of NATO com­bat oper­a­tions in Afghanistan and Western spend­ing cuts.

Ef­forts by Euro­pean Union pol­i­cy­mak­ers and in­dus­tri­al­ists to forge a sin­gle Euro­pean de­fence mar­ket have of­ten been ob­structed by in­di­vid­ual EU gov­ern­ments which jeal­ously pro­tect their na­tional de­fence in­dus­tries and jobs, an is­sue likely to be dis­cussed at an EU sum­mit on Thurs­day and Fri­day to con­sider how to strengthen the in­dus­try.

“A strong Euro­pean de­fence mar­ket and in­dus­trial base can only be achieved with a move away from the ex­ist­ing fo­cus on na­tional mar­kets,” the Euro­pean Com­mis­sion said in a re­port pre­pared for the sum­mit.

“Europe can no longer af­ford the in­ef­fi­cien­cies of du­pli­ca­tion and over­ca­pac­ity that our ex­ist­ing frag­mented mar­ket en­tails.”

In the fighter jet mar­ket, three Euro­pean air­craft - the Rafale, the Eurofighter, built by Air­bus Group, Fin­mec­ca­nica and BAE Sys­tems, and Gripen, made by Swe­den’s Saab - com­pete for busi­ness.

There are 11 dif­fer­ent ar­mored ve­hi­cle pro­grams, ship­yards in most coun­tries and mak­ers of sub­marines in Bri­tain, France and Ger­many.

“In the last cou­ple of years in the United States, they have done tremen­dous reshuf­fling of their ca­pac­ity, clos­ing down fac­to­ries and adopt­ing more for less... Some of that needs to hap­pen in Europe as well,” Hakan Buskhe, Saab’s chief ex­ec­u­tive, told Reuters at the Paris ter in the Emanuel AME Church in Charleston, the pres­i­dent had be­gun to iden­tify more closely and per­son­ally with the civil rights cause.

A high point for sup­port­ers came in March when Mr Obama at­tended a cer­e­mony mark­ing the 50th an­niver­sary of a bru­tally re­pressed civil rights march in Selma, Alabama.

“Our march is not yet over,” he de­clared.

Mr Obama re­turned to this theme, and to his own ex­pe­ri­ences of race and iden­tity as the son of an Air Show last week.

The Euro­pean de­fence mar­ket has been shrink­ing, mean­ing there is less busi­ness to go round. NATO says spend­ing on de­fence by its 26 Euro­pean mem­bers slipped to about $250 bil­lion in 2014 from $275 bil­lion in 2010.

Slower busi­ness at home has forced many de­fence firms to look out­side Europe for sales although Rus­sia’s an­nex­a­tion of Ukraine’s Crimea re­gion last year has spurred some Euro­pean coun­tries to in­crease de­fence spend­ing and Poland is en­gaged in a ma­jor mil­i­tary up­grade.

Failed merger Pre­vi­ous at­tempts to re­shape Europe’s de­fence ab­sent Kenyan fa­ther and a white Amer­i­can mother, in the in­ter­view with Maron.

The pres­i­dent de­scribed how grow­ing up, he had to learn “I don’t have to be one way to be both an African Amer­i­can but also some­body who af­firms the white side of my fam­ily.”

But now the evo­lu­tion he wants to see is in broader so­ci­ety.

“And so what I tried to de­scribe in the Selma speech that I gave... was a no­tion that progress is real and we have to take hope from that in­dus­try have of­ten failed as gov­ern­ments hold shares in a num­ber of lead­ing Euro­pean de­fence com­pa­nies, en­abling them to in­flu­ence man­age­ment, or use golden shares to stop un­wel­come takeovers.

The most am­bi­tious ef­fort to re­shape Europe’s de­fence land­scape, a planned $45 bil­lion merger of EADS, now Air­bus Group, and Bri­tain’s BAE Sys­tems was aban­doned in 2012 in the face of op­po­si­tion from Ger­many which doubted the deal’s in­dus­trial logic.

The Euro­pean Com­mis­sion adopted a law in 2009 to try to level the play­ing field for com­pa­nies com­pet­ing for de­fence con­tracts and to stop Euro­pean gov­ern­ments fa­vor­ing firms in their own coun­tries. But the Com­mis­sion says progress, but what is also real is that the march isn’t over and the work is not yet com­pleted,” he said.

“And then our job is to try, in very con­crete ways, to fig­ure out what more can we do.”

Public re­vul­sion at the sup­pres­sion of the Selma march led to the Vot­ing Rights Act, a vic­tory in the civil rights strug­gle that even­tu­ally made pos­si­ble Mr Obama’s elec­tion to the White House.

“If we made as much progress over the next 10 years as we have over the last 50, things would be bet­ter,” he said. “And that’s within our grasp.” Mean­while, three Repub­li­can pres­i­den­tial can­di­dates say they are do­nat­ing to char­ity the con­tri­bu­tions they re­ceived from the leader of a white su­prem­a­cist group men­tioned by the al­leged per­pe­tra­tor of last week’s mas­sacre at a his­toric black church in Charleston.

White House hope­ful Sen­a­tor Ted Cruz will re­turn the $8 500 in do­na­tions he has re­ceived since 2012 from Earl Holt III, pres­i­dent of the Coun­cil of Con­ser­va­tive Cit­i­zens, a Cruz aide told The Guardian on Sun­day.

The group is listed as racist and ex­trem­ist by the South­ern Poverty Law Cen­tre, which tracks US hate groups. Holt has given dozens of times to nu­mer­ous can­di­dates in re­cent years, in­clud­ing mem­bers of the US Se­nate and House of Rep­re­sen­ta­tives, to­talling at least $56 000, ac­cord­ing to fig­ures com­piled by the Cen­tre for Re­spon­sive Pol­i­tics.

Aside from Mr Cruz, two other pres­i­den­tial can­di­dates have re­ceived do­na­tions from Holt: Sen­a­tor Rand Paul got $1 750, and for­mer sen­a­tor Rick San­to­rum re­ceived $1 500, ap­par­ently dur­ing his pre­vi­ous pres­i­den­tial cam­paign.

“Rather than put more money back in the pock­ets of such an in­di­vid­ual, my 2012 cam­paign com­mit­tee will be do­nat­ing the amount of his past do­na­tions to the Mother Emanuel Hope Fund to sup­port the vic­tims of this tragedy,” San­to­rum said on Mon­day in a state­ment.

“I ab­hor the sen­ti­ments Mr Holt has ex­pressed. These state­ments and sen­ti­ments are un­ac­cept­able,” Mr San­to­rum added. — AFP gov­ern­ments are still fail­ing to ap­ply the law in some cases.

The EU is work­ing to en­force the law on de­fence pro­cure­ment, to make it eas­ier for small de­fence firms to trade across EU borders and to pro­mote co­op­er­a­tion among Euro­pean coun­tries on de­fence projects, such as a planned Euro­pean drone.

In the ab­sence of a trans­form­ing de­fence merger, Euro­pean com­pa­nies have made some di­vest­ments dur­ing the down­turn.

Air­bus Group un­veiled plans last year to sell half a dozen busi­nesses with com­bined an­nual rev­enues of around 2 bil­lion eu­ros, sim­pli­fy­ing its De­fence and Space di­vi­sion to fo­cus on war­planes, mis­siles, launch­ers and satel­lites.

Deep restruc­tur­ing Restruc­tur­ing has gone much deeper in the United States, the world’s largest de­fence mar­ket.

US arms mak­ers went through a mas­sive con­sol­i­da­tion in the 1990s af­ter the end of the Cold War, with dozens of smaller com­pa­nies join­ing forces and ul­ti­mately cre­at­ing a hand­ful of large prime con­trac­tors less de­pen­dent on any one sec­tor.

Over­ca­pac­ity in the ground ve­hi­cle mar­ket forced plant clo­sures and lay­offs when the US mil­i­tary be­gan with­draw­ing troops from Iraq and Afghanistan, and years of bud­get cuts trig­gered stream­lin­ing across the rest of the de­fence sec­tor.

US of­fi­cials are now con­cerned about the dwin­dling num­ber of sec­ond- and third-tier sup­pli­ers in some ar­eas, such as the ground ve­hi­cle and air­craft car­rier busi­ness, wor­ried that a thin sup­ply chain makes com­pa­nies vul­ner­a­ble to in­ter­rup­tions in pro­duc­tion.

Com­pa­nies such as Raytheon, Lock­heed, Boe­ing and oth­ers are dra­mat­i­cally step­ping up their ef­forts to ex­pand in­ter­na­tional sales, with a key fo­cus on Asia and the Mid­dle East.

Ten­sions in the South China Sea have also opened up new mar­kets for US weapons mak­ers, in­clud­ing Viet­nam, where Washington has al­ready re­laxed its arms em­bargo to al­low lim­ited weapons sales. — Reuters

Peo­ple join in prayer dur­ing Sun­day ser­vice out­side the emanuel African Methodist epis­co­pal Church in Charleston, South Carolina on Sun­day.

Visi­tors look at a Das­sault Rafale M fighter dur­ing the public days of the 51st Paris Air Show at Le Bour­get air­port near Paris on Satur­day.

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