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Industrial trends

What does the defence industry look like today?


The world's military-industrial complex is noticeably changing shape. After World War Two the main competition was between NATO and Warsaw Pact countries. 

For a complete run down on the arms industry visit http://en.wikipedia.org/wiki/Arms_industry

Most of the main weapon systems developed during the 1980s Cold War are still among the most deadly systems today:

The heat in the cold war

The 1980s was basically a period of massive rearmament as the US attempted to push the USSR into economic collapse by relying on its massive borrowing capability to invest in military hardware in a contest of building destructive capital which would be unsustainable for the much smaller Soviet economy to win. Soviet president Mikhail Gorbachev attempted to steer a middle course but was toppled by a military coup. This was in turn overturned by Boris Yeltsin who dissolved the USSR. The result was the development of a range of destructive capital which today remains the yardstick by which such systems are compared.

Sea

Nimitz class Supercarriers
Wasp class Landing Helicopter Dock (LHD) amphibious assault carrier
Ticonderoga class of missile cruisers
The Arleigh Burke class of guided missile destroyers
Los Angeles class nuclear attack submarine
The Vanguard class (Trident) nuclear missile submarine [UK]
Meko class frigates [Ger]
La Fayette class frigate [Fr]

Air
 F22 Raptor [air superiority fighter]
 Eurofighter Typhoon [air superiority fighter]
 Dassalt Rafale [carrier fighter]
 Mig-29 [air superiority fighter]
 Sukhoi Su-27 [air superiority fighter]
 B2 Spirit [Stealth bomber]
 B1 Lancer [supersonic bomber]
 Sukhoi Su-34 [supersonic bomber]
 C17 Globemaster [strategic airlifter]
 UH-60 Blackhawk [tactical helicopter]
 AH64 Apache [attack helicopter]
 Mi24 "Hind" [attack helicopter]
 NHI NH90 [utlity helicopter]
 CH53E Super Stallion [heavy helicopter]

not forgetting the older F15 Eagle, F18 Hornet, F16 Fighting Falcon, F14 Tomcat

 
Land
Abrams tank and Bradley IFV
T-80 tank (mostly a failure) and BMP-3 IFV
Leopard 2 tank
Mowag Piranha
BTR-80
VAB and VBL
Buffel mine protected vehicle

The collapse of the Soviet Union in 1991 meant that the balance of terror was at an end. The former soviet nations adopted market economies which grovelled along on the brink of collapse, breeding a new generation of kleptocracy. The failure of the Soviet system had repercussions in Africa and numerous other places where Soviet patronage had propped up regimes that were economically bankrupt. With the Russians desperate for hard cash patronised regimes found themselves without support.

The bloated 90s and 200s

With the economic collapse of Russia the military market contracted. Military manufacturing firms that had remained independent during the Cold War fell on hard times and a process of consolidation began during the 90s and early 2000s. During this times a few firms grew to become a good deal larger in the military arena than they had been before.

Agusta Westland (Italian/British helicopters)
BAE (British, Swedish, South African and American land sea and air systems)
Boeing (US aerospace manufacturer)
Denel (South African defence manufacturer)
EADS (European aerospace manufacturer)
Finmeccanica ( Italian defence systems)
General Dynamics (US aerospace, land and naval defence systems)
Israel Military Industries and Rafael
Kraus-Maffei-Wegmann (German land systems)
Kongsberg (Norwegian Defense and Aerospace)
Lockheed Martin (US aerospace and defence systems)
Norinco (Chinese defence manufacturer)
Northrop Grumman (US defence aerospace)
Renault Defence (French land systems)
Rheinmetall (German defence systems)
Raytheon (US military systems)
Russian Helicopters (what it says)
Thales (Defence electronics)
United Technologies (US aerospace and defence)
United Aircraft Corporation (Russian aircraft joint venture)

being some of the better known and larger corporations. Unfortunately something was starting to become obviously wrong with Western military programmes. They became corrupt and bloated. New weapons were starting to become outrageously expensive to develop and gold-plating of specifications was getting out of control. Systems with enormous budget overruns included:

US Marines Expeditionary Fighting Vehicle (scrapped) [US$3.3 billion]
US Army M247 Sergeant York DIVAD (Division Air Defense) (scrapped)
US Army Comanche helicopter (scrapped) [US$7.9 billion ]
US Army XM2001 Crusader self propelled artillery (scrapped)
US Marines V-22 Osprey tiltrotor
UK RAF Nimrod A4R ASW aircraft (scrapped) [UKP3.8 billion]
Indian Navy ships
Joint services F-35 Lightning II multi-role jet
European Boxer Multirole armoured vehicle
Airbus A400M aircraft
The Future Combat System (scrapped) [US$18.7 billion]

In nearly all these cases the primary problem was the failure of the military to specify what they wanted or to ask for more than was practical. The result was a lot of money was spent finding out what wasn't wanted. It was a basic problem of military men with too much money and no idea what it was they were expected to do. At the same time some well established platforms started to become gold-plated as well and the result was huge increases in unit costs for systems such as:

C-130 Hercules transports
UH60 helicopters (and their descendants)
Armoured infantry fighting vehicles

Where the west tends to go for grandiose programmes where listed defence firms promise the earth and then deliver late and well over budget this is not the case everywhere. It is notable that by comparison the Russians have had relatively few failures. The T-80 main battle tank and the Black Eagle was a spectacular exception. In general the Russians are less likely to ask for perfection and work on the basis of gradual improvement based on field experience. This means that older Russian equipment develops a reputation for reliability even in the face of some pretty terrible maintenance circumstances.

The rise of the BRICS

The rise of the BRIC nations (Brazil, Russia, India, China) has been on the back of the peace dividend. These countries are enjoying tremendous economic growth and are drawing numerous other nations along in their wake. Other nations developing industrial capability thanks to the rise of the BRICs are Turkey, Mexico, Indonesia, South Korea, Israel, Australia (New Zealand), Singapore, and Malaysia.

As a result we are seeing new manufacturers entering the market particularly from Singapore (ST Engineering), Turkey ( Otokar and FNSS ), Brazil (Embraer ), Korea ( Hyundai Rotem, Hyundai Heavy Industries ), Finland (Patria) India ( Tata , HAL) and Australia (Austal) and all entering with highly competitive ideas or cost-performance.

We are also seeing the re-animation of the former soviet bloc manufacturers particularly in the Ukraine (Antonov),  Russia (Rosoboronexport ) as well as Romania, Serbia and Poland.

This means that the arms business is now split between the high technology extremely expensive end and the medium technology relatively reasonable end.

While the New Zealand defence force has tended to buy the almost most expensive kit, there are now a wider range of options from nations we have not traditionally seen as defence allies.