Tuesday, 11 September 2012

The defense players under pressure

How to ensure that the Army remains capable of strategic missions while severe budget cuts ahead for years to come? Elected officials, industrial and military gathered for the tenth edition of universities defense in Brest on 10 and 11 September, will try to answer them. 

When the money runs out, you have to be innovative show. It should phosphorer intensely universities defense that open Monday in Brest. This great event brings together over two days of parliamentary experts in defense, generals and officers, industrialists military suppliers, will this year on a particular view of the new challenges facing this community.

This tenth edition effect occurs when a White Paper on defense and national security, which should define the tasks and key issues of the army for years, is being developed. The commission in charge was incorporated in July and will report its findings in early 2013.

On the other hand, it operates in a crisis of public finances across Europe. But the military is already engaged in a broad movement to reduce its size with 54,000 job losses over the period 2008-2015.

For the year 2013, the defense sector in France is doing relatively well with a stabilization of its budget to about 31.5 billion euros against an increase of 1% initially planned by the previous military programming law ( LPM). Following the letters and ceiling framing sent by the Prime Minister in June and August, the first saving measures, however, did not take long.

And the Ministry of Defence has decided to freeze 4.5 billion investment in equipment for the next six months pending the outcome of the White Paper. Some major projects will suffer including Scorpion ambitious program of modernization of land forces. Las for manufacturers, it is certainly the beginning of a more severe famine to come.

To a "Small Business Act"?

In July, the Court of Auditors in its mid-term review of the 2009-2014 military programming law believed that the defense had a savings of 15 to 30 billion euros by 2020 to stay within budgetary constraints . "There is very little leeway to place new orders while he must find the financial resources to fulfill orders during the execution," warns the report summary.

In this context, the intervention of Defence Minister, Jean-Yves Le Drian will be eagerly awaited. Of course, it should return some recent actions that take comfort an audience anxious. In these difficult times, it was able to maintain the research budget in 2013 will therefore benefit about 750 million euros.

Similarly, the dispostif Support dual innovation for SMEs will benefit even an envelope of € 50 million.Maybe he will go further and announce it a small business act for SMEs? In any case, he campaigned for the establishment of a partnership inventive about innovation among major groups and SMEs in the defense sector.

And industry in all this? Condemned to see their orders reduced or postponed? Not necessarily. They should not be mere spectators of these universities are an opportunity for them to put forward proposals on a new approach to their market.

Already, some their strongly advise the lessons of the current crisis. "In the defense industry can not continue to complain of declining budgets. This is a basic. Issue for them is now as follows: what to do when my main client can not both buy equipment, maintain and prepare for the future? "says Philippe Plouvier, the firm Roland Berger.

Clearly in Brest for defense players, immobility is not an option.

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