Tuesday, 17 July 2012

Missiles: Franco-French war in the Saudi sands

Thales and MBDA are a contract of 2.5 billion euros. One is legitimate and has the benefit of priority in the negotiation, the other offers the electronics group to make a joint bid. Without success.Problem, this fratricidal battle, that annoys the Saudis, the Americans could benefit if the new French government does not put good order.

It is a true Franco-French war being waged behind the scenes for several months the missile manufacturer MBDA, supported by the firepower of EADS (the shareholder at 37.5%), and the electronics group Thales, itself supported by Dassault Aviation. And every time - or most - are allowed between the two rivals, which are however also be good partners in several cooperative programs. But the issue goes beyond commercial and industrial reports today that the two groups can maintain.Because it is a contract (called Mark 3) of several billion euros in Saudi Arabia. Corroborating sources, the contract price currently stands at 2.5 billion euros when it peaked at 4 billion euros in 2011. The Kingdom wants to modernize its air defense short range, which has consisted of missile systems, and Shahine Rattlesnake (Crotalus improved chassis mounted AMX 30) manufacturing Thales, which is the official supplier of the Kingdom for nearly thirty years its air defense (Al Thakeb contract in 1984). It is even one of the priorities of Riyadh, slips a knowledgeable observer: "Prince Salman (then defense minister, appointed in June and then crown prince and deputy prime minister, ed), said in Paris "when the defense minister, Gerard Longuet, came to Riyadh in late March.

2.5 billion contract that can be lost

In this context, Thales offers a modernization of the Saudi-based Rattlesnake NG (VT1). And since 1984, Thales made his butter reaping a series of contracts to support the renovation and Rattlesnake and Shahine systems like the contract Shola 2 (197 million). MBDA but also wants to enjoy the windfall and offered to Saudi Riyadh VL Mica missiles and Aster and Rattlesnake modernization, as the prime contractor Thales. That stubbornly refuses the electronics, which eyeing this contract since 2008. "This is Arles, this contract," sighs one at MBDA, which provides play for the team of France against foreign competitors.

One thing is sure, this fight between two groups considered French by Saudi Arabia is trying to blur the message of France to Riyadh. And this fratricidal war could eventually consider several sources, to lose the contract to a foreign competitor. The Americans were ambushed and count the blows. And history could repeat itself once again to Paris which registered yet many failures in Saudi Arabia (contract Miksa border surveillance, Rafale ....) because of major malfunctions related to the war between France and French networks . "The Saudis do not understand what is going on, they are completely surprised by the Franco-French which does not concern them," says one to "".

War between the state services

Yet everything seemed clear during the passage in Riyadh by the former Minister of Defense, Gerard Longuet, who made his last trip to Saudi Arabia on March 24 before the start of the campaign for president. France continued to support an offer since 2008, that of Thales. The Saudis had taken note and were ready to sign later in the year 2012, we are assured to "". Especially since the King had given the green light by sending a letter of intent and had even set aside a budget. In addition, Gerard Longuet had conveyed the message in Riyadh that the French air force would not abandon the Rattlesnake NG (New Generation) to protect its airbases. Which was then reassured the Saudis.

But soon, EADS, including taking advantage of the semi-power vacuum in France because of the campaign, is returned to the charge with the authorities, praising the tempting offer of MBDA. At the European missile, it explains why the Saudi authorities asked them to present this offer. However, what ended up blurring the whole message from Gerard Longuet. Since threads are blocked.Especially since, according to the French state services, the Saudis were treated to a different tune.

Thus, the supply of MBDA is supported by a part of the Directorate General of Armaments (DGA) while that of Thales is supported by Odas, a company created by the French state to support the major arms manufacturers , mainly in Saudi Arabia. And the Saudis, says to you "" have even had a visit in the spring of director of central intelligence within that time, Bernard Squarcini, accompanied by an executive officer of EADS, asking them to name of the French state to receive in connection with this case an intermediate, which appears today in business around the sulphurous president. Yet a man who is no longer in court in Riyadh for some time. "MBDA and EADS will never have this contract," said one expert from Saudi Arabia. Short of grand guignol in French is only if the key there is still a contract of 2.5 billion euros to a French industrialist. "Today we have the impression that everything past is over with the new majority that wants clear and clean business," said the source.

A fight premise of the consolidation of the sector missile

A DGA is estimated that Thales has left so much drag on this issue and it is not unusual for funds now MBDA plays his luck: "The Saudis really want Thales since that time." Anyway, MBDA is the job quite well and with the support of EADS, including the managing director of EADS stalled, Jacques Bourgeois ... a former party of angry Thales Group and is close to the French embassy in Riyadh.Within the electronics group, we recall that there was nevertheless a non-aggression agreement in 2008 required by the secretary general of the Elysee, Claude Gueant, on Saudi Arabia between the two groups. True, but Thales has not played very well hit with Riyadh. Because its CEO, Luc Vigneron, which has not always had good relations with senior Saudi leaders, recently landed its director of Middle East Region, Olivier Badard, yet he had appointed in February 2009, without Saudis warn, furious at having been neither defendants nor consulted.

But beyond this very juicy, there is also another part that is played on an industrial level with the further consolidation of the European missile industry. The activity of missile systems from Thales needs this contract to run its plant in Belfast. MBDA as watching a good time to get its hands on the activities of Thales missiles at a good price. Provided the e-group is seller. This is not the case today, it says in the Thales. Today Only: the Saudi contract, if lost, could again determine his choice in the review of its business portfolio.

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