European Defence Industry Research Articles

Prospects for increased cooperation in European defence industry policies

(2003). Prospects for increased cooperation in European defence industry policies. European Security: Vol. 12, No. 2, pp. 89-98.

The transformation and future prospects of Europe's defence industry

Europe’s defence industry has evolved by transforming itself from a collection of nationally oriented firms to one dominated by two giants. Stimuli external and internal to the European Union (EU) are responsible for this development. After describing the evolution of this sector since the end of the Cold War, the authors present four factors that played key roles: developments within the United States’ defence industry; the impact of technology and defence economics; general economic restructuring within the EU together with nascent defence industrial policy; and progress towards the creation of a European Security and Defence Policy. While the evolution required all four factors, the EU played a critical and under–appreciated economic and political role in the changes that have transformed the European defence industry, and is now positioned to continue to shape this process.

Small countries and the consolidation of the European defence industry: Portugal as a case study

In this paper, we analyse the dilemma confronted by a small country in relation to the consolidation taking place in the European defence industry. Assuming that Portugal must maintain its armed forces, and must retain a minor defence industry, this industry must be competitive in small niches. Competitiveness must be based on, amongst other elements, technical efficiency and technological change. We investigate this issue, first characterizing the threats faced by the Portuguese defence industry, then investigating its present efficiency and finally, we discuss its role in the consolidation of the European Industry. We conclude that the Portuguese defence industry has no alternative but to opt for innovation and European partnership, which are complementary policies, but which require the active involvement of the stakeholder (i.e. the Government) in effecting these fundamental shifts in direction and emphasis. If this strategy does not succeed, the defence policy should be based on offsets.

Trends in European defence industry: Fortress Europe or Atlantic defence industry?

In the last one decade, the global defence industry has undergone significant changes. It has shrunk in terms of size. It has also become more concentrated. While large companies in the leading centres are on a merger and acquisition spree, it has left medium and small companies facing severe difficulties in adjusting to the changed scenario. The demand for military equipment shows uneven trends. While the demand for high‐tech weaponry has gone up which, in turn, has attracted more money in both sales and investment in military R&D, the ‘demand for conventional military equipment has been stagnant. As the second largest military production centre in the world, the European defence industry faces a dilemma today—whether to build a common continental industrial base independent of the US or strive to become a giant Atlantic defence industry. This paper argues that while the former option makes sense for Europe, the latter, though plagued with problems in the short run, might become inevitable for Europe in the long run.

Comparative Perspectives on East and West European Defence Industries

JEEMS Journal of East European Management Studies , Seite 43 - 64

Strategic alliances in the European defence industry

Reports on research into the relationship between European defence manufacturing firms and their experience of cross‐border strategic alliances. The research takes in 135 cross‐border strategic alliances involving UK and European defence manufacturing firms, ranging from firms heavily dependent on defence contracts to firms whose defence interests make up less than 10 per cent of overall business. These firms manufacture telecommunications, transport, information, lethal platforms and components for the operation of these platforms for military organisations. A main aim is to ascertain the extent of participation in strategic alliances, the types of alliances being used and the major problems experienced by the partners.

European military satellites

Western intervention in Balkan conflicts since the mid-1990s has led to heightened European concerns about its dependence on US technology in the crucial areas of command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR). The consolidation of European defence industries and US support for a stronger European role within NATO are now changing this picture. The creation of the European Union's new rapid reaction force will increase demand for Europe's own military-satellite capabilities.

A test bed for enhanced cooperation: The European Defence industry

A test bed for enhanced cooperation: The European Defence industry

Change and cross‐border activity in the European defence industry

Following on from the thawing‐out of the cold war and the revolutions of Eastern Europe, the threat of lower armament levels provided opportunities for the rationalisation of European defence and its military‐industrial complexes. Coupled with the continuing threat of reduced defence expenditures and increasing competition, defence companies have reacted to the changes with a number of strategic moves involving mergers and acquisitions, market nicheing and diversification, in addition to lay‐offs and plant closures. More recently, moves towards a single European defence industry have been discussed among the major contributing member countries and their industry leaders. The integration of a defence aerospace industry seems well placed to succeed, given French co‐operation, and this should produce a formidable, global competitor. East and Central Europe’s contribution to the equation is questionable, although the early signs are that west European defence companies are establishing firm footholds in the region against strong US competition.

Saving NATO's Foundation

Transatlantic defense cooperation is a little like the weather: everybody talks about it, but nothing much seems to happen. Meanwhile, Europe is building a separate European defense industry, based in part on shortsighted, if not downright misguided, calculations of self-interest. For its part, the United States is tentative at best and ambivalent at worst about greater cooperation. But as the United States and Europe dither, the effectiveness of the nato alliance?and ultimately its future?is increasingly at risk. The costs of inaction mount daily. Declining defense budgets, already stretched too thin, are denied the efficiencies that greater transatlantic cooperation could yield. Both Europe and the United States have therefore had to delay the modernization of their mili tary forces and thus have been slow to take advantage of advances in technology?notably information technology that applies to command, control, communication, and intelligence. The air war in Kosovo

Corporate Governance and Performance During Consolidation of the United States and European Defense Industries

Under a market-oriented corporate governance system, the United States defense industry consolidate quicker and gained a comparative advantage in simple measures of firm performance, including profit margin and market share, than the continental European defense industry, which is more oriented toward stakeholder relationships in corporate governance. The defense industry in the United Kingdom, also characterized by market-oriented governance, performed well. On a wider set of measures related to firm performance and other stakeholders, the evidence is less clear. Concerns have been expressed about the European defense industry's survival in its current form. Likewise, concerns have been raised about the increasing level of concentration in the United States, its potential effect on innovation, and the erection of trade barriers. This paper concludes that corporate governance concepts are useful in analyzing firm conduct and performance in the defense industry and other traditionally -- 'national' industries. It also concludes that policy concerns might successfully be addressed through increased Transatlantic cooperation, attention to the flexibility inherent in the Anglo-American system of corporate governance, and recommendations to modify public procurement policies.

Strategic change in the European defence industry

Discusses how recent changes in the European defence market have forced leading defence companies to make significant changes to their corporate strategy. Examines these changes, reviews the existing literature on strategic change in the defence sector and provides a detailed case study of British Aerospace. Shows that the process of strategy formulation is complex and changing. Moreover, makes it clear that the defence market is restructuring at a European and international level and that the process of managerial collaboration is intensifying. Says that the future of the defence industry and the strategic focus of defence firms is thus unlikely to remain in the hands of national governments but will be determined at a European or global level.

A renovated procurement policy in France: Ten commandments to enter the next millennium

For France as in other industrialised countries, the strategic defence environment has been considerably modified. The nature of military threats has changed and new ones have emerged, entailing a shift in procurement priorities and strategies. Here Jean‐Yves. Helmer outlines how France has tackled the reform of its procurement process and policy as part of an overall reform of the defence system. He emphasises the need for firm cost control and for military and civilian projects to dovetail as much as possible, including the adoption of civil standards across the board. Far from driving French industry in on itself, this reorganisation, following some rationalisation as in Germany and the UK, is intended as a move towards forging a truly mltinational European defence industry. With resources towards such cooperation greatly increased this will over time yield considerable domestic sayings Helmet concludes with a list of Ten Commandments which should ensure a complete revolution in the French procurement process.

Transatlantic competition and European defence industries: a new look at the trade—defence linkage

The competitive environment of transatlantic economic relations has changed considerably in recent years, and this change generally has not been in favour of European industry and trade. The United States has reaffirmed its technological lead in a time of increasingly rapid technological change, and it is practising a new assertiveness in security and defence policy as well as in international trade policy and export promotion. This article analyses these developments and their implications for European defence industries as well as for Europe's industrial competitiveness and trade performance beyond the defence sector.

UK and German defence industry change: Some perspectives on strategic marketing

Over the past decade, the European defence industry has had to respond to increasing pressures of reduced defence spending, exacerbated more recently by removal of the immediate military threat from the former Soviet Union. Under the “Options for Change “, the UK has abandoned certain weapons programmes, while Germany has had the additional economic and social problems brought on by re‐unification. The industry's options comprise conversion, diversification or specialization, thus continuing to face structure change and competition from defence imports and “off‐the‐shelf” systems and equipment. Given the high exit barriers and past “cushioning” of the industry by governments, the presence of skills and know‐how to compete effectively is questionable. The case for strategic marketing approach for those suppliers remaining is clear; as buyer (monopsonistic) power strengthens, the threat of new entrants increases and the associated competitive rivalry intensifies. However, the ingrained “defence culture “ in...

Sink or swim? Central European defence industry enterprises in the aftermath of the cold war

(1995). Sink or swim? Central European defence industry enterprises in the aftermath of the cold war. Europe-Asia Studies: Vol. 47, No. 5, pp. 787-812.

Future Large Aircraft (FLA): European collaboration or buying off‐the‐shelf?

The aerospace industry has been identified as a key player in the restructuring of the European defence industry as a whole and the British government has seemed keen to support the role of the UK aerospace industry in this process. However, the decision to withdraw from the European attempt to develop a new alternative transport aircraft and to favour an American upgrade of the C130 Hercules has brought this commitment into question. John Appleby and Gordon Gilbert examine the issues and options surrounding this dilemma and its implications.

Defence industries: Progress in decline?: An overview

Although today's European and American defence industries are experiencing cutbacks, Michael Bell argues that there are some offsetting compensations for the British industry in the shape of healthy defence exports. As technology becomes increasingly more sophisticated and military operations executed on a multi‐national level, so collaboration and rationalisation between national defence industries must increase. Government interference would theoretically be limited by the natural pressures of competition, although the implementation of an open European market is not being imposed on a statutory level, which in turn leads to the issue of US protectionism of its defence industry and the degree of permeability of the European markets to American exports. Not only must defence industries be aware of the needs of their markets, but governments must continue to create as much common ground as possible between themselves.

The European armaments industry at the crossroads

In the coming decade, one of the most significant decisions facing European defence planners, as well as their US counterparts, will concern the extent to which their defence industries will be internationalized. The '1992 Plan' of the European Community (EC), the proposals of the Independent European Programme Group (IEPG) for integrating defence markets, and a series of new NATO armaments projects highlight the heightened interest in internationalizing the West European defence industrial base. This article examines the causes and consequences of the recent trend towards opening European defence industries to international competition, and explores the dilemmas facing policy-makers charged with crafting European defence industrial policy. These policymakers face three fundamental questions: What is the appropriate mix between free-market competition and state-to-state collaboration in Europe? Should European armaments procurement be based on a notion of 'European preference' that discriminates against foreign products? What institutional form should European armaments co-operation take?

Open defence markets: to be or not to be?

Profound changes are afoot in the European defence industries. The GEC/Siemens takeover of Plessey is just one of the more prominent examples of a widespread process of restructuring that reveals both the pressure on companies to think internationally, and the reluctance of governments – even when as committed as the British government is to international competition – finally to let go of all aspects of national control over defence companies. These changes have implications for European technological capabilities, transatlantic (as well as European) industrial and international relations, and the capacity of governments to regulate the current wave of industrial activity in the public interest. All this is occurring against the wider backdrop of the move towards the single European market from the end of 1992, and the expectation that defence budgets will be increasingly constrained as East-West tensions subside.