Battle lines are drawn within Armscor

Top officials suspended for rejecting board’s new strategy, writes Wyndham Hartley

THERE is something rotten in the state of Armscor — the government’s weapons acquisition agency. Evidence of this is the dismissal of the board’s chairman Moreti “Mojo” Motau by former defence minister Lindiwe Sisulu early in June and the suspension of two top officials for criticising a new strategy for Armscor developed by the board.

Pierre Meiring and Kgathatso Tlhakudi had been suspended pending a disciplinary process while Mr Motau is challenging his removal as chairman.

The collision between officials and the board is about the officials wanting to remain faithful to the post-1994 mandate of Armscor of defence material acquisition, while the board wants to market the organisation as an acquisitions agency for other countries in Africa.

The board also wants Arm- scor to expand into making commercial vehicles such as tractors, trucks, helicopters and ships, as it used to do before 1994.

The officials’ critique of the new strategy is that “Armscor was formed to provide a complex technical service to the South African National Defence Force (SANDF) and this remains at the heart of the company’s mission.

“Sensitivity to the needs and intent of the client are the cornerstones of the organisation’s survival, yet this new strategy seems to ignore this in totality”.

The officials were apparently not consulted in the preparation of the strategy by a board with little or no experience of defence material acquisition.

Defence consultant Helmoed Heitman says if it is true the Armscor board did not involve senior management in the development of its strategy “then that is crazy because they have all the experience.

“It is more than crazy if they did it in secret because that is simply reckless.”

The officials also challenged the contention of the board that the intellectual property held by Armscor can be “leveraged” for commercial advantage.

“There is generally a complete lack of understanding related to the intellectual property that Armscor is the custodian of,” the officials say.

“There is a belief expressed in the strategy that this can be a major source of income whilst exactly the opposite is true.

“It is a general principle that in any area where intellectual property can be established that is commercially viable there will be a supplier of such intellectual property and the associated products. The intellectual property established within the military environment is generally associated with those areas of endeavour where a commercial business cannot be established,” the officials say.

“A further aspect of the strategy, that Armscor should take the lead in and responsibility for so-called strategic projects of military-commercial nature, not only meeting the needs of the SANDF but also with a view to establishing a commercially viable business, is the most unrealistic aspect of the entire strategy. The proposed strategic projects are in the most competitive environments possible namely off road heavy transport vehicles, light utility helicopters and ship building.

“All of these business areas have seen massive international rationalisation over the last decade or so yet it is the Armscor board of directors’ belief that they can generate a start-up in these fields and successfully make money.”

Mr Heitman says the idea of building trucks, tractors and helicopters in competition with, for example, the Chinese and the Russians is simply crazy. He says the board is missing the point entirely of Armscor’s purpose.

“It is not clear why the former minister fired ‘Mojo’ Motau but one reason could be the controversial strategy designed to take Armscor into the 21st century,” Democratic Alliance defence spokesman David Maynier says.

“The strategy, entitled Repositioning Armscor: Strategy Through the 21st Century, was rubbished by Armscor’s senior management as a document that shows an abysmal lack of understanding of the business in general and the technicalities in particular”.

Mr Maynier has called on Defence Minister Nosiviwe Mapisa-Nqakula to step in and take action.

Armscor has consistently declined to comment.