I sometimes have an uncanny ability to write something exactly a day too soon, so in fairness, I should comment on the latest. Defense News reported today that BAE Systems is negotiating with the Iraqi government over the potential sale next year of 200 M2A2 ODS Bradley fighting vehicles. The M2 is the type for the infantry, vice the cavalry, which simply means that it carries more soldiers and fewer anti-tank missiles. The -A2 ODS is the version that the National Guard drives, and it’s based on lessons learned in the 1991 War in Iraq itself (that was Operation Desert Storm, after all). Paul McLeary’s article further noted that a similar deal is being discussed with the Saudis for 2015, though numbers were not mentioned.
For the folks in York, Pennsylvania and elsewhere who rebuild Bradleys, this is great news—for a while. For as Mark Signorelli, BAE’s vice president for vehicle sales admitted in a speech this week at headquarters in Michigan, “we’re past the point where we can avoid layoffs”. I must agree; demand from Middle Eastern countries may sustain the business, but only partially. BAE Systems other armored vehicle subsidiary, Hägglunds of Örnsköldsvik, Sweden, has been doing just fine for years on export sales, and much the same can be said for the Leopard 2 business of Krauss Maffei Wegmann and Rheinmetall. That Great German Tank Fire Sale of the past ten years has given them great upgrade opportunities. But it’s notable just how compact a footprint BAE’s Swedish business has, and that’s what the American business lacks.
It’s also important to note that neither the Bradley nor the Abrams have done fabulously on the export markets, except with a handful of American allies in the Middle East. I’d count Australia’s purchase of a single regiment of M1A1s, except that the latest word from Down Under doesn’t indicate that the Army there has been all that happy with its choice. In short, the future size of these two lines of business—M1 and M2—may be a knowable know. And if that’s so, my radical consolidation suggestion may still be the way to go. The Army Department here in the US might just run the numbers, and think seriously about just how much longer it wants to maintain such overcapacity in the industry.
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