The effects of the Russian-Ukrainian conflict were highlighted in his opening remarks at the annual press conference by Eric Béranger, the MBDA CEO. “The conflict in Ukraine was a wake-up call for most, the European Union imports in weapon systems increasing by 35% in 2022,” he underlined, mentioning also the recently announced increases in defence budgets by the UK, 5 billion £ over the next two years the original request made by the British Minister of Defence Ben Wallace who recently increased that figure, while French President Emmanuel Macron announced a 400 billion Euro defence expenditures in the next seven years, which follow the 100 billion Euro special fund announced by Germany. In mid-March the Council of the European Union decided to increase the financial ceiling of the European Peace Fund by 2 billion Euro to 7.979 billion Euro by 2027 to cover additional needs.
Underlining that without security “there is no sustainability,” the European missile company CEO also stressed the importance of sovereignty and that of cooperation, the two being strictly interlinked when speaking of medium powers such as the European nations.
With increasing needs and rising costs due to research and development for high-tech systems as well as to production costs, cooperation is the only way to cope with future needs, Béranger said, stressing the importance of consolidating resources in the human, industrial and financial domains. “We must rediscover the cooperation strength,” he stated highlighting that MBDA is a tool of cooperation and sovereignty.
Taking as example Complex Weapons programmes, he made clear that the French-UK cooperation is what allows the two countries to resource them. The same will happen for the Future Cruise and Anti-Ship Weapon (FCAS/W) programme which capability should be available by 2030 in order to avoid capability gaps. The heads of state of the two countries also declared that “France and the UK will work together on ensuring interoperability of their respective future Combat Air systems, including on communication and on armament systems,” other cooperation examples among nations that are part of MBDA as well as with others being mentioned by the CEO.
A key issue that emerged from the first year of conflict in Ukraine is the need to boost the production of defence systems, particularly ammunition, in order to cope with unprecedented usage rates. “Ukraine has shown that it is not a matter of technology or mass, it is a matter of technology and mass,” Béranger stated, adding that the need is to increase production volume and speed. This is however not easy task as the supply chain is under stress, some long lead items being provided at 24 months timing while other providers do not even commit to a delivery time. MBDA is working closely with its 600 suppliers to cope with this issue, and internally the company is trying to accelerate production as much as possible production processes, by optimisation and simplification, as nowadays “time is an issue,” as the CEO said. The Ukrainian war changed the time paradigm, as in the “peace dividend” era it was normal to spread deliveries when budget was not available, extending time, something that has become unacceptable nowadays. Among measures adopted by MBDA we find the creation of stockpiles of critical items, something which was definitely not usual in the past.
As an example of acceleration in the production process, the MBDA CEO unveiled that the production rate of the Mistral 3 VSHORAD missile has been increased from 20 per month to 30 per month, the aim being to each a 40 per month pace, doubling the initial figure and this by optimisation and simplification of the production process.
“However the most precious assets of an industry is its manpower,” Béranger stated, adding that “in 2022 MBDA hired 570 new personnel, while in 2023 this number will increase to 2,000,” most of them engineers.
That said, cooperation with customers is essential, and even improvements have their limits therefore close cooperation with customers to ease procedures and norms to speed up processes, as well as prioritising needs, are key measures.
“Cooperation is in our DNA, it is what created MBDA,” Eric Béranger stated, before providing some figures on the 2022 budget.
MBDA revenues remained at the same level of 2021 record level, 4.2 billion Euro, however order intake dramatically increased, from 5.1 to 9 billion Euro, which boosted the order backlog from 17.8 billion to 22.3 billion Euro. Ukraine had no effect at all on revenues, according to the company CEO, the war having only marginal effects on order intakes. However it is expected that the situation in Eastern Europe should have an impact n 2023 figures, albeit how much this will be is still open to question.
Photsos courtesy MBDA