MBDA lays out its grand vision of becoming a global playery
A FORCE Report
Le Plessis, Paris: It took MBDA some time to open the gates of its facilities for the foreign media. But when it did, it pulled all stops to ensure that the visitors, the Indian media team, have access to not only the top management, including the CEO, but to the technical project heads, as well as the business strategists; and, of course, its key factories in the heart of France. Through conducted tours, presentations and talks over regional wine and cheese, MBDA was presented as a company poised for a bigger and juicer piece of the pie in the international missile market, especially in India, which it wants to develop as a home market outside Europe.
Apart from the joint development of Short Range Surface to Air Missile (SR SAM) programme with the DRDO, MBDA is also competing for the missile requirements of multi role helicopters, medium range maritime reconnaissance aircraft, land-based mobile coastal defence, Jaguar upgrades and the recovery of the Sea King helicopters among other projects. Buoyed by the growing Indian appetite for the state of the art munitions, in February 2010, MBDA gave a presentation on all its airborne systems to the Indian Air Force. In addition to the armed forces, with the increasing focus on homeland security, MBDA also plans to enhance its portfolio in India to go beyond missiles, to include counter-mine and counter IED systems. So, it was about time that the Indian media get a taste of what the MBDA platter holds.
But perhaps, it has also to do with the way MBDA views itself today and wants the world to share that vision. As Chief Executive Officer Antoine Bouvier in an hour-long interaction with the visiting journalists said, “Our strategy is to reinforce and strengthen MBDA as a global player. We have been a European company for a while now with offices and facilities across UK, France, Germany and Italy. Now we have an office in the US also;” apart from the one in India of course, which opened nearly two years ago.
After a series of mergers of French, British and Italian companies in the mid-Nineties, MBDA was created in 2001. Further consolidation happened with the acquisition of the German subsidiary EADS/LFK in March 2006 and the present form emerged with BAE Systems, EADS (37.5 per cent each) and Finmeccanica (25 per cent) sharing the stakes. As Loic Piedevache, MBDA country head, India says, “This was the trend in Europe. We faced enormous competition from abroad and the only way to survive and thrive was to sink individual differences and combine the strengths.” Underlining the transition, Bouvier says, “15 years ago, MBDA was a collection of six-seven competitive national companies. We gradually consolidated ourselves as a European company. Our biggest challenge then was to override our history of rivalry and competition to develop a mindset of cooperation, not within Europe alone but outside as well.”
Given this history, MBDA may appear to be a late bloomer, but the fact is that its missiles have been well known in the defence market, throughout the world and especially in India where its anti-tank guided missile Milan has been in license-production by Bharat Dynamics Ltd for the last 40 years. Bouvier himself, though only three years old in the company is an old India hand. His association with India started 20 years ago when he was with Airbus. On that net, he counts Jet Airways chairman, Naresh Goel as his friend. He subsequently moved to ATR, then Eurocopter followed by Astrium before coming to MBDA. With this track record, it is only modesty that prompts him to say, “India is such a vast country, I dare not say that I know India.” Nevertheless, he does know how India, and its public sector functions. While in Astrium, he worked with Indian Space Research Organisation (ISRO) and now with BDL and some private sector companies.
Even as Bouvier reinforces MBDA’s commitment to become a global player through a three-pronged strategy which involves mustering all the key technologies either directly or through partners so that it never has to depend upon anyone for technology; having presence in each theatre of missiles, such as land-based, air to air, close air support etc; and establishing a global presence beyond Europe through exports, cooperation and partnerships, his focus is India, which according to him will emerge as MBDA’s biggest market outside Europe.
To further that interest, MBDA is already in talks with a number of Indian private sector companies exploring all possibilities of working together including transfer of technology, joint ventures and joint development. The key to greater Indian participation at the moment is, of course, the ambitious SR SAM missile, on which MBDA has been conducting technical discussions with the DRDO for a few years now, which according to Piedevache is very excited about co-developing the missile. Bouvier says that whenever the Indian government’s go ahead comes for this project it will be a landmark for both DRDO-MBDA and India-France. For the former, because “it will not be transfer of technology, but true joint development,” he says. “We will bring our strengths and DRDO will bring its strength to the table to develop a completely new product, which we can then consider exporting jointly.” And for India-France, because the French government has already thrown its weight behind the project and views it as a cementing factor in a multi-dimensional relationship.
But MBDA officials are still keeping their fingers crossed. They know that in India there are many a slips between the cup and the lips. Informally, over wine they talk about the tremendous pressure that Israel has been exercising on the government as well as the DRDO. They rue the unfairness of Israeli business practices which MBDA can never match because of its transparency in deals and uprightness in business. However, brushing aside such misgivings, the CEO strikes a positive posture. He says, “There is progress on talks on SR SAM and we are happy with it. Such issues cannot be decided overnight. Moreover, I see more opportunities than problems.”
Being the CEO, Bouvier has to have a grand vision skimming over minor setbacks, which is why he takes pains to enunciate his role as a global player as opposed to niche or national players. “I view two US companies as our biggest competitors, primarily because of their huge domestic market,” he says. “This is the reason MBDA has been leveraging synergies between products and markets to attain a critical mass,” he adds. According to him, 10 years ago, companies like Boeing used to be a small global player and now they are a big niche player, unlike MBDA which is a truly global player because of the range of its missiles and its operational world-view. “India must view all this when looking for a strategic, long-term partner,” he says with a flourish.
Ironically, while Bouvier views the US giants, Boeing and Raytheon as its rivals, for whom he has a ‘healthy respect’, his colleagues concede facing maximum challenge in India not from the US but from relatively smaller player like Israel and the old horse Russia, both of whom seem well-entrenched both in the Indian market, as well as the armed forces. As one commented over lunch, “The Israeli strategy is simple. When you give them the Staff Requirements, they click on all the boxes, claiming to give you everything that you want. They never say no to anything. Once the contract is signed, they show their cards, but by then you have already invested so much money and time. We don’t do that. We always refer the SR to our technical people. We never claim what we don’t have or cannot provide.”
To ensure that MBDA has everything that a customer may desire, three to four per cent of the sales go into technology and 70 per cent into development every year. Bouvier says, “The world is changing and so are the threats. We need missiles with lower signature, which are more agile and accurate. Therefore new seekers are required and better propulsion system.” MBDA is currently working on a number of new projects, such as deep strike missile, ballistic missile defence, surface attack cruise missile and new generation anti-submarine missile.
Over the following three days, the Indian media team got a flavour of the new as well as the ongoing projects in various divisions of MBDA, encompassing land, air and maritime domains. For details, read the next article.