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Wednesday, August 1, 2012

Dogs and Ponies Seek New Shows

Military Insider

By Andrew Drwiega

Attending the Farnborough Airshow in early July reconfirmed the increasingly widely held belief that the center of gravity of business, particularly military aerospace, is moving eastward and away from Europe. Everybody knows it, and while the facade was still familiar, the commitment was not there.

As a journalist, there were fewer rotorcraft press briefings than I have ever seen. AgustaWestland alone, under the bower of its parent company Finmeccanica, was the only company to host a full press conference with CEO Bruno Spagnolini in the hot seat.

Eurocopter CEO Lutz Bertling held a less public private roundtable with the press and Bell Helicopter President & CEO John Garrison hosted a press breakfast. Sikorsky had arranged 1-on-1s with new president Mick Mauer for selected journalists on the Sunday before the show. There was a time, not so long ago, that a new CEO of any major helicopter OEM would have been metaphorically “paraded through the streets of Rome” (ok, Farnborough or Le Bouget), like a conquering Caesar.

Aside from a lone Sikorsky MH-60 R/S briefing, the usual plethora of product updates was largely missing (although the U.S. Marines did a superb job—once again—of telling everyone who will listen how well they are using the MV-22B Osprey). Perhaps the message was picked up by “faces unseen” from the UK’s Ministry of Defence, who may consider it for use onboard the Queen Elizabeth aircraft carriers. As they are now without “cat and trap,” at least until the JSF-35 is replaced by UCAVs, it may be just the job for the Carrier Onboard Delivery (COD) role (as carrier out by the Grumman C-2 Greyhound in the U.S. Navy fleet). In fact the prospect of the U.S. Navy buying 48 MV-22s (albeit still without any defined budget to back up that aspiration) would be very supportive to Bell-Boeing’s hopes of selling the aircraft to the UK (although numbers and lifetime costs still have a major role to play in any decision).

Russian Helicopters held a press conference on three of its products—the Ansat, the Mi-171A2 and the KA-32A11BC—which, although largely sales pitches, had good English speakers with appreciably slicker presentations (they are learning the game fast). Boeing had “off-on-off” flights lined up on one of the four MV-22Bs that flew over from the U.S. for Farnborough and the Royal International Air Tattoo held the weekend before. But the C-17 press flight was also canceled—clearances could not be got in time, it appeared.

British Secretary of State for Defence Philip Hammond speaking at the ADS Defence Conference during the Farnborough Airshow in the UK told industry that they needed to adopt a new approach to business as the world order changed.

Perhaps industry’s reluctance to “break out the balloons” at Farnborough can be identified by something that the UK Secretary of State for Defence, Philip Hammond, said during the ADS Defence Conference on the morning of the third day. Although principally addressing British industry, Hammond warned that the defense industry, in fact industry in general, was facing a huge challenge. He stated that domestic demand was declining as government budgets contract, a factor throughout Europe. Added to this was the reality that traditional export markets were also fundamentally changing: “Previous customers now want to be partners, and perhaps in a few years’ time, see themselves as first tier competitors. So there will be a huge pressure on industry to revisit business models, and to build partnerships to reflect the new reality.”

He suggested that industry had to think about three key elements—development capital, end demand and technological capability—in a different way. He suggested that partnering in development rather than simply delivering products was now the way ahead. In the main, the rotorcraft industry has already responded to this with various partnerships progressing with Russia, China, India and Brazil, among others. The challenge will be to manage the process in a way that ensures their continuity as a prime, or at least as an equal partner. With minds on the coming struggle that lies ahead, the airshow “dog and pony show” may well be on its way to newer climes.

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