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Often turbulent and rarely smooth, transatlantic defense-industrial relations are headed for rough weather, with problems building on several fronts. At the eve of the brewing storm is the thorny issue of technology access and sharing between Washington and its European partners. Concerns in this area already are emerging on the recently selected $6-billion-plus North Atlantic Treaty Organization Alliance Ground Surveillance program. At the same time, Great Britain's long-running efforts to negotiate a waiver that would ease industrial collaboration appears to have stalled, while technology access issues also are proving knotty on the F-35 Joint Strike Fighter program.

Defense spending in Asia is slowly rebounding, but it is being driven by new political and economic realities that could alter traditional spending habits. Emerging factors impacting military procurement trends range from a growing awareness of the need to better integrate equipment, to concerns about ballistic missiles, to China's increasing economic and military force, say industry representatives. Moreover, elections of one sort or another loom this year in Taiwan, South Korea, Japan, the Philippines and other countries, which could slow modernization decisions.

The article reports on the state of the market for military aircraft as of 2009. Saudi Arabia and Oman are reorganizing their combat aircraft inventories as France and Russia are trying to persuade nations to buy their aircraft. Qatar took delivery of C-17, which is considered one of the biggest deals for 2009. French President Nicolas Sarkozy is closely involved in top-level lobbying for Rafale aircraft.

The article reports on the decision of AgustaWestland to continue its development and production activities to offset the temporary difficulties of the commercial market. According to AgustaWestland chief executive Giuseppe Orsi, the military business will remain robust and there is no reason to adjust performance targets for 2009. The company is continuing to develop the XX9 helicopter in spite of the current weak economic climate.

The article discusses the highlights of the 2009 North Atlantic Treaty Organization (NATO) Summit, which dealt with missile defense activities. According to German defense minister Franz Josef Young, arms control and disarmament constitute a concern that the alliance's strategic concept needs to address. The summit had been regarded as a key venue in which to urge members to embrace the concept of continental defense. France is also stepping up its interest in missile defense.

The article reports on the acquisition of military electronics contract DRS Technologies by Finmeccanica. The deal, which requires U.S. government approval and may face a counter-bid from EADS, could spark a new round of consolidation in the second tier of the aerospace and defense sector. Finmeccanica agreed to pay DRS shareholders a 32% premium. To alleviate such worries, Finmeccanica has proposed setting up DRS as a stand-alone subsidiary under a Special Security Agreement with a U.S. board of directors.

The article reports on the expectation of Italy to further grow its armaments trade surplus in 2008, building on a trend that began in 2005. But industry is seeking changes in regulations that could accelerate growth even more. According to the Italian government's annual report to parliament, Italy exported arms worth €1.27 billion ($2.06 billion) in 2007, up from around €1 billion the year before and €894 million in 2005.

This article explains that a Malaysian requirement for 12 medium utility helicopters may lead to much larger sales if the country works toward a proposed inventory of 74 units, making the program one of the most attractive in Asia. The competition is attracting interest from Sikorsky, Kazan Helicopters, Eurocopter, Boeing and AgustaWestland, with bids due on January 8, 2007. The eventual order is only part of a broad push by the Malaysian armed forces to buy more helicopters, and it is taking money from other programs.

The article reports that France, Italy, the Netherlands and Norway are hustling to assess the impact of a revised production schedule for NH90 naval frigate helicopters. The latest delays mean the militaries will not receive their first NFH90s until well into 2009. The revised schedule was presented last month by NH90 prime contractor NH Industries at the NH90 Steering Committee meeting, which was chaired by the Netherlands.

The article focuses on EADS North America Inc.'s first victory as a prime contractor for the Pentagon. The young company is now considered as a serious contender in the largest defense market on the globe. This status could bolster its future bid to wrest some of Boeing's business building refueling tankers for the U.S. Air Force. The win is also taking the focus away from problems in Europe with EADS's leadership turnover and delays in developing Airbus's new flagship A380. EADS North America is also teamed as a subcontractor to Northrop Grumman for the U.S. Air Force's impending refueling tanker competition against Boeing.

This article reports that the Russian government is planning to allocate $300 million over the next three years to help finance development of Sukhoi Co.'s regional jet program. Sukhoi has already clinched a deal with a group of Russian banks totalling $100 million in loans backed by the state guaranties, and is in talks with the European Bank for Reconstruction and Development for more loans. Development of the aircraft is estimated to cost $670 million. Sukhoi already has invested some $70-80 million of its own funds in the program.

The article discusses the aerospace industry of South Africa, examining the development of the Paramount Group's Advanced High-Performance Reconnaissance Light Aircraft (Ahrlac) and South African weapons as well as South Africa's military acquisition programs. The article argues that export-oriented South African defense companies are important to the industry, since the South African National Defense Force (Sandf) cannot sustain a large industry.

The article reports that stagnation demand in the European aerospace and defense industry is forcing companies to peruse core needs and adjust their product portfolios accordingly. It is said that the industry is preparing itself for a leaner spending era and big transactions are now off the table. John Dowdy, the head of defense and security for the McKinsey & Co. consultancy, says that the industry should focus on both portfolio and facility rationalization.

The article reports that Finmeccanica, the premier aerospace and defense contractor in Italy, will lose significant revenue sources after 2012 government defense spending budget cuts. Topics include international contracts, economic forecasting, and corporate restructuring. The chief executive officer of Finmeccanica, Giuseppe Orsi, is mentioned.

The article considers the aerospace and defense industries in Turkey. Turkey's increased purchases of military equipment from domestic companies in those industries is discussed, as is an increase in exports by both industries in 2009-2010. Development of turboprop trainer planes and military helicopters by the company Turkish Aerospace Industries Inc. is among the examples cited.

The article discusses factors that could reduce exports by European defense and aerospace companies. Political unrest in Africa and the Middle East could result in governments imposing export restrictions for those regions. In Great Britain legislators have demanded that exports to Saudi Arabia be examined more closely.

The article discusses the military aerospace industry of the Middle East and the high pace of defense procurement activity there. Possible obstacles that could curtail such procurement are discussed including political turmoil, unrest in Tunisia and Egypt, instability in Yemen, and a reported rising threat from Iran.

The article discusses the earnings-performance of European defense contractors. According to the authors, defense contractors are preparing for decreased government spending by implementing cost-cutting measures and restructuring plans despite strong financial returns. Topics include an overview of how uncertainty has impacted the growth strategy of several European companies, including BAE Systems, Finmeccanica, and Thanes.

The article discusses how aerospace and defense company Finmeccaniica maintains its growth targets despite the slowdown in commercial aircraft and helicopter markets in 2009. It states that the company reported an increase in revenue but a flat net profit. It notes that the company's new-order intake grew 22 percent despite the slowdown in the commercial markets.

The article deals with the defense procurement and development efforts of the Italian parliament, which include guided weapons, strategic reconnaissance and defensive countermeasures projects. The parliament has approved the acquisition of the AGM-88E Advanced Anti-Radiation Guided Missile as well as the purchase of the Rafael Spike-ER anti-armor weapon. The participation of Italy in the North Atlantic Treaty Organization (NATO) Alliance Ground Surveillance (AGS) program has been waived by the parliament.

The article reports that Europe's aerospace and defense industry officials are calling on their respective governments to be more proactive in supporting industry through a variety of measures, including shoring up vital research and development accounts and providing loans to ailing small and medium-size suppliers. They worry that small suppliers may be forced out of business owing to the global economic crisis.

The article reports that user feedback is causing Selex Galileo to adjust its plans for the Falco tactical unmanned air vehicle, with plans on improving payload options and making the system more responsive in the field. Many of the upgrades now being planned are linked to interest from the Italian defense ministry, which so far is not a buyer of the system, the author said. Selex is adding a catapult launch option to Falco, which normally operates as a short-takeoff-and-landing system, the author added.

This article reveals that the potential impact of renewed political upheaval in South Africa has dominated the 2008 African Aerospace and Defense show. The timing and schedule of military acquisition programs may fall foul of the strife. There remains the risk that funded programs or new-start projects could be delayed. South Africa's force modernization package, launched in 1998, is nearing completion. The show was marked by the official delivery of the first four Saab Gripen fighter aircraft.

The article reports that Italy's defense and aerospace sector is aiming to secure substantial business in Libya following a strategic agreement between Rome and Tripoli, which includes a $5-billion, 20-year reparations package for Italy's 1934-43 occupation of Libya. Italian Prime Minster Silvio Berlusconi and Libyan leader Muammar Qadhafi signed the global cooperation agreement that Italian industry hopes will increase its business in the North African country.

The article reports on the partnerships between India's private aerospace industry and Western defense industries. In one major deal, India's Mahindra Defense Systems concluded a joint-venture agreement with Whitehead Alenia Sistemi Subacquei of the Finmeccanica Group that aims to tap into the $500-million underwater defense systems market using the industrial and operational capabilities of its Indian partner. BAE Systems is in discussions with the Indian air force to supply 40 additional Hawk advanced jet trainers.

This article reports that Boeing and Alenia Aeronautica are strengthening the foundation of their long-standing cooperation with a large expansion in research and development efforts. A set of newly signed memoranda of understanding will see the two companies increasingly working together in long-lead research in the aerostructures and materials fields. To this end, Boeing plans to open a research center in southern Italy.

This article states that Alenia Aeronautica is ramping up C-27J production as demand for the tactical airlifter continues to grow among North Atlantic Treaty Organization (NATO) members and export customers. The company expects to produce 18 aircraft by year-end for its four customers--Italy, Greece, Lithuania and Bulgaria. The need for airlift is such that Alenia tried to get the Italian air force to defer some deliveries to allow aircraft to be diverted to other customers. However, Italy said it could not allow further postponements.

The article discusses the efforts of the Turkish government to modernize its defense capabilities and strengthen its defense industry. The modernization drive is being pushed in large part by the Turkish defense ministry's undersecretariat for defense industry (SSM). SSM chief Murad Bayar states that the goal is to push domestic content in Turkish procurements to 50% by 2010 from the 25% level in 2003.

The article reports on the decision of the U.S. Air Force to choose a subsonic platform for its next-generation bomber. George Muellner, president of advanced systems at Boeing's Integrated Defense unit, believes that the choice of a subsonic bomber concept to meet a 2018 in-service date bolsters the need for high-speed weapons. Boeing, Lockheed Martin and Raytheon are examining a variety of future cruise missile concepts.

The article reports that Lockheed Martin is trying to keep its cruise missile efforts alive with in-house and government-funded development projects. Lockheed Martin has suffered numerous test problems with the U.S. Joint Air-to-Surface Stand-off Missile (Jassm) that now put the program in jeopardy. Company officials nonetheless are hopeful that upcoming flight trials of the ramjet-powered Rattlrs missile will improve its weapons business.

The article reports on the emergence of Selex Sistemi Integrati as leader for the joint European active electronically scanned array (AESA) radar development programs. Along with efforts on the Tornado, Typhoon and Future Lynx aircraft, the group is also looking at airborne early warning, naval and ground-based applications that are part of a collaborative program between Italy and Sweden. The aim of the joint program is to develop a family of AESA radars suitable for air, land and marine uses.

The article reports that Finmeccanica is expected to take control of Selex Sensors and Airborne Systems by the middle of 2007. Finmeccanica acquired 75% of Selex in 2005 under a put/call agreement with BAE Systems that allows the Italian aerospace and defense contractor to buy out the remaining 25% share of BAE. The price of the transaction, set two years ago, will be around €400 million.

The article provides information on a joint venture involving Finmeccanica and EADS. Gaining the upper hand in the joint venture has long been a Finmeccanica aspiration and the company's CEO Pier Francesco Guarguaglini says that not only is it a top agenda item in talks with his EADS counterparts, he is also optimistic that he will prevail. EADS and Finmeccanica talks are likely to concentrate on Italian participation in the A350 program.

This article reports that key decisions in Italy on defense and aerospace acquisition and industrial policies are in flux after the very narrow win of the leftist coalition led by Romano Prodi in Italy's general election. Prodi's Union coalition will hold merely a few votes' margin in the Senate, while it maintains a wider majority in the lower house. After the Union's inability to clearly trounce the ruling center-right coalition led by former Italian Prime Minister Silvio Berlusconi, political analysts say that there could be a protracted period of uncertainty in Italian politics. Given the current situation, Prodi's government is not expected to be able to make quick decisions, even though on some issues, particularly military procurements, action is required soon.

This article reports that Italy is resorting to some fancy financial footwork to bolster its paltry military modernization budget. Political leaders, egged on by military representatives and defense industry interest, have devised a last-minute change in Italy's budget legislation that effectively pumps 650 million euros into military modernization accounts. In a related move, the government has drawn on financing set aside for the Italian-French Fremm frigate program to fund the order for an initial batch of about 60 wheeled armored vehicles.

The article reports that Turkey expects to decide on a new trainer aircraft this year. The Turkish program is specifying a tandem-seat configuration and single turboprop propulsion system. At first, there were discussions between Turkey and the U.S. about a foreign military sales purchase of the Raytheon T-6A Texan II, which the Pentagon is buying under its Joint Primary Aircraft Training System project. In the long run it is anticipated that Turkey will buy an advanced jet trainer for which the Korea Aircraft Industries/Lockheed Martin T-50 and the Italian M346 trainer are seen as strong candidates.

The article reports that Italian defense industry officials are betting that recent changes in export licensing and government policy in Rome herald more overseas sales in the coming years. Italy exported 480.3 million euros worth of military equipment, while 270 government-approved imports totaled only 103 million euros. Rome granted export licenses worth 1.49 billion euros in 2004, a 16.2% increase from 2003, suggesting that future sales will increase. That includes an agreement signed in July 2000 by France, Germany, Italy, Spain, Sweden and Great Britain to facilitate defense industry restructuring and coordinate export regulations in Europe. There is also concern from Italian government officials that financing of defense deals is becoming more complicated, since many Italian banks are refusing to become involved in weapon exports.

The article presents information on the arrival in the jet trainer arena: Finmeccanica which is exploring the potential for a linkup on the Aermacchi M346, according to industry sources in Rome. EADS' German predecessor, DASA, unveiled a supersonic jet trainer concept, dubbed the AT-2000, in 1996, which was the culmination of study work carried out in the early 1990s. Original timescales suggested a first flight in 2000, with an entry into service this year. The latest in a list of target customers for EADS is the 12-nation Eurotraining initiative.

The Italian navy is crafting requirements for two classes of unmanned aerial vehicles (UAV)—mindful, however, of its funding limitations and the performance of some candidate platforms. While developing cases for both small and medium UAV systems, in the short term the navy hopes to learn from the defense ministry's acquisition of the General Atomics RQ-1 Predator, which will be operated by the air force. The navy also wants to determine how UAVs will fit within its air arm, which has about 100 fixed- and rotary-wing platforms.

Eurofighter partner nations are struggling to trade off weapon and system integration, cost and schedules as they try to agree on the most important phase of the program so far. With Elements of Tranche 2 negotiations, covering 236 aircraft, certain to drag on into the second half of 2004, Great Britain, Germany, Italy and Spain are not now expected to ink a contract until the end of the year. The initially determined EOC 1, planned for introduction in 2008, includes integration of the Raytheon Enhanced Paveway II GPS/laser-guided bomb, along with a designation pod.

The article discusses highlights at the biennial International Defense (IDEF) exhibition which was held in Istanbul, Turkey in May 2011. Data from the defense industry secretariat showed that domestic military equipment amounted to 25 percent of the country's procurement in 2003, 42 percent in 2008 and 52 percent in 2010. The event witnessed the debut of Claw, a remotely operated weapon station (ROWS).

The article reports that companies operating in developing countries are challenging original equipment manufacturers and big contractors in the international military weapons and equipment market. According to the author, these smaller companies offer relatively low priced products that provide basic technologies to developing countries. He reports that the companies are teaming up with foreign partners who can provide them with the necessary technology and the needed expertise, with products mostly developed locally but marketed internationally.

The article reports that Italian company Selex Sistemi Integrati has developed an antipiracy system for merchant ships called Pompeius. According to the author, Pompeius is a modular, network-centric system that can meet different requirements and match the ship's value with the risk levels that it may encounter in its routes. The antipiracy technology has an on-board and an ashore system which operates independently and also as a network. The system, the author reveals, can provide early warning of suspected pirate activity.

The article reports on developments in warship design. According to the authors, ship designs are being driven more by lessons learned from the past and by economic conditions rather than peer-on-peer sea battles. They assert that success in shipbuilding will largely depend on anticipating changes in user requirements which include emphasis on multirole platforms, particularly with regards to international operations. They add that the countries of Brazil, Canada, Great Britain and Israel have all developed surface combatant programs.

The article presents the highlights of the International Defense Exhibition and Conference (IDEX) held in Abu Dhabi, United Arab Emirates in February 2011. General Atomics-Aeronautical Systems Inc. was able to finalize a deal with United Arab Emirates-based defense firm Golden Group for its Predator and Predator B/Reaper unmanned aerial vehicles (UAV). ITT Defense showcased its model of a surveillance satellite. Great Britain launched its Light Protected Patrol Vehicle project, the Force Protection Ocelot and the Supacat SPV400.

The article reports on the expansion of the Middle East defense market as of February 2011. It is noted that Middle Eastern countries are seeking comprehensive packages that include training, security guarantees, military-to-military cooperation, as well as nuclear guarantees. Due to manpower shortage, Middle Eastern forces are adopting automation. An assessment of the military purchases and capabilities of Saudi Arabia and Iran is presented.

The article discusses the highlights of the 2010 Africa Aerospace and Defense (AAD) exposition that was held in South Africa. Among the major defense technologies introduced were armored vehicles, remotely operated weapon stations, and a mobile ground-based air-defense system. It is noted that South Africa has a strong defense industry but budget cuts have affected the modernization of its National Defense Forces (NDF).