BAE Systems Investor Brief - December 2005
End of Dec 05
In This Month’s Brief:
- Department of Homeland Security certification
- New Bradley Subsystem Production Facility
- Saab acquires Aerospace Monitoring & Systems (AMS) in South Africa
- MBDA signs contract to acquire NewLFK
- Hawk Mk128 Update
- Installation of JSF Vertical Tails
- Typhoon Export
- Typhoon Update
- Other notable achievements on the Typhoon programme in 2005
- Type 45
- Astute Hull Closure
- Astute’s First Signal
BAE Systems CONTRACTS AWARDED THIS MONTH
- IT Support to Maryland
- Engineering Support for Trident II Program
- Brazilian, Korean Orion Fleets upgraded autopilots contracts
- Active Pilot Control System for UH-60M
- MCTS contract
- Expanded Production of M113 Conversions
- Additional $51m Delivery Orders for M88A1 Overhaul
- First armored vehicle sale to UAE
General News
Department of Homeland Security certification
Our Electronics & Integrated Solutions (E&IS) Operating Group is now one of several US businesses that have been designated and certified by the Department of Homeland Security (DHS) as a provider of Qualified Anti-Terrorism Technology under the Support Anti-Terrorism by Fostering Effective Technologies (SAFETY) Act of 2002.
The DHS certification in late November applies to E&IS” MATADORTM infrared countermeasures system – a IRCM missile jamming system deployed on fixed wing aircraft to defeat IR-guided missiles.
New Bradley Subsystem Production Facility
BAE Systems and Red River Army Depot (RRAD) held a ribbon-cutting ceremony at the Depot in Texarkana, Texas on 16 November to open a world-class, lean subsystem overhaul facility for Bradley Combat Systems.
The newly established facility will be the site for the overhaul, remanufacturing and upgrade of the 25mm enhanced gun system, turret drives and transmissions for Bradley Combat Systems. This work is being performed as part of the Public Private Partnership established last year between BAE Systems and RRAD.
Saab acquires Aerospace Monitoring & Systems (AMS) in South Africa
Saab has signed an agreement to acquire Aerospace Monitoring and Systems (Pty) Ltd in South Africa. The acquisition is valued at RAND 30m and, subject to approval by the regulatory authorities, is likely to be effective by beginning of April 2006.
The company is based in Midrand, South Africa, has a turnover of RAND 58m and employs 75 people. AMS focuses on proprietary aircraft monitoring and recording systems for the global aerospace and defence market.
MBDA signs contract to acquire NewLFK
On 28 November the contract was signed for the transfer to MBDA of all the direct shareholding from EADS Deutschland in LFK, the German missile company, as well as its own remaining German guided weapons businesses active in the area of guided weapons and guided weapons sub-systems and components to LFK.
This transaction is subject to regulatory authority approvals from European anti-trust authorities and the German Ministry of Economics. Once this is achieved, NewLFK will be a 100% owned subsidiary of MBDA.
Major Programmes Update
Hawk Mk128 Update
BAE Systems and the UK Defence Procurement Agency have been working together in active pursuit of a production contract for the Hawk Mk128. It is now expected that the contract signature will be achieved in the first quarter of 2006. The current design and development programme for the aircraft continues to schedule.
Installation of JSF Vertical Tails
The vertical tails for the first JSF aircraft (A-1) were installed on 28 November 2005 at Lockheed Martin's site in Fort Worth, Texas. The right and left-hand vertical tails, which were designed, manufactured and assembled by the JSF team at Samlesbury, were joined to the BAE Systems-produced aft fuselage.
This means that the front, centre, aft fuselages and the wing are now in place and the recent installation progresses the programme further towards first flight in Autumn 2006.
Typhoon Export
The Eurofighter GmbH Strategic Marketing Committee has appointed BAE Systems and the UK to lead Typhoon marketing activities in Japan.
Typhoon Update
On 21 December the Governments of the Kingdom of Saudi Arabia and the United Kingdom of Great Britain and Northern Ireland signed an Understanding Document, which is intended to establish a greater partnership in modernising the Saudi Arabian Armed Forces and developing close service-to-service contacts especially through joint training and exercises.
This confidential agreement between the two Governments recognises the requirement to provide enhanced capabilities to existing military assets and ensure that they can be supported by local Saudi industry. Under the terms of the signed document Typhoon aircraft will replace Tornado Air Defence Variant aircraft and others currently in service with the RSAF.
Other notable achievements on the Typhoon programme in 2005
The UK's contracted Typhoon deliveries for the year were completed in mid-December with the delivery of the 12th aircraft to the RAF. The other partner companies are also on target to meet their year end deliveries.
Also in December a Royal Air Force 17 Squadron Typhoon from the Operational Evaluation Unit, based at RAF Coningsby, successfully carried the new generation medium range air-to-air missile system, Meteor.
Earlier in the year, successful AMRAAM (Advanced Medium Range Air-to-Air Missile) firing trials were carried out with every milestone in the entire programme achieved exactly as planned.
Typhoon has now demonstrated its ability to carry the full range of air-to-air weapon systems proposed for use in its air defence role.
Ship 1, Daring
The overall performance is to schedule. The ship is now progressing well with its Launch Plan with only 4 weeks to the main event.
Ship 2, Dauntless
The overall performance is also to schedule. The 2006 schedule will see the project deliver all of the Blocks to the Govan Berth and end the year with the final line of sight milestone in preparation for launch in 2007.
Astute Hull Closure
The Submarine business has been driving to achieve the complete and fully welded hull for first of class submarine Astute by the year end.
Since shipping of the final major module, the command deck was completed last month and the drive has continued on achieving maximum pipe, cable and ventilation installation to help de-risk the commissioning programme in the New Year.
2005 has been a year of achievement for the Astute programme, during which every target has been achieved, the majority of them early.
Astute’s First Signal
First of class submarine Astute has received its first signal from UKSubcams, the Ministry of Defence body that transmits messages out to the flotilla, some two years before the boat goes to sea. The ‘end to end’ test has been completed much earlier in the programme than normal, making it a major de-risking exercise.
BAE Systems CONTRACTS AWARDED THIS MONTH
IT Support to Maryland
BAE Systems Information Technology won a multiple-award contract with the State of Maryland for consulting and technical services (CATS). Under CATS, the business unit was awarded contracts in five technical areas: Enterprise Service Provider (ESP), Web and Internet Systems, Geographical Information Systems, Software Engineering, and Information Systems Security.
This is a key opportunity that will allow the pursuit of the IT Support contract for Baltimore Washington International Airport.
Engineering Support for Trident II Program
BAE Systems Technology Solutions & Services was awarded a $62.5m contract from the US Navy’s Strategic Systems Programs (SSP). BAE Systems will provide system engineering and integration support for the Trident II (D5) Fleet Ballistic Missile Strategic Weapon System (SWS) program.
The contract is a continuation of a range of system engineering, test, analysis, IT, and logistics solutions performed by BAE Systems for SSP since 1956.
Brazilian, Korean Orion Fleets upgraded autopilots contracts
E&IS’ Platform Solutions (PS) has secured two contracts worth $12m to provide digital autopilot systems for Orion aircraft in Brazil and the Republic of Korea. Under subcontract to L-3 Communications, PS will support eight P-3 Orion aircraft each for the Republic of Korea Navy and the Brazilian Air Force, respectively.
The P-3 digital autopilot system provides pilots with enhanced modes of operation, including control-wheel steering, navigation steering, a broad range of hold modes, and automatic approach landings.
Active Pilot Control System for UH-60M
Sikorsky Aircraft Corp. has selected E&IS’ Platform Solutions (PS) to develop the active pilot control system for the US Army’s UH-60M Black Hawk program. The system will replace the mechanical pilot controls on the current UH-60 with active technology that saves weight and provides pilots with intuitive tactile cues for easier handling and reduced workload.
The Black Hawk will be the world’s first production helicopter to combine active control technology with a fly-by-wire system.
MCTS contract
Insyte has been awarded the Maritime Composite Training System (MCTS) Phase 1 programme, valued at around £100m. MCTS will provide the Royal Navy with a new shore based Warfare Operator Training capability. The capability will meet the training needs of the Type 45 Ready For Training in 2007 and current in-service surface platforms.
Contract Modification to refurbish additional M109 Vehicles
On 30 November, BAE Systems received a $58m contract modification from the US Army’s Tank-automotive and Armaments Command (TACOM) to refurbish 164 M109A5 vehicles and deliver 200 sets of Basic Issue Items for Egypt.
Under the contract, BAE Systems will complete comprehensive refurbishments on self-propelled howitzers purchased from US Army long-supply stocks. The refurbishment includes the overhaul of a significant number of assemblies to “like new” condition – including the engine, transmission and main armament.
Expanded Production of M113 Conversions.
BAE Systems responded to an US Army request to propose an additional 500 upgrades and conversions of the M113A3 Family of Vehicles. The request includes three variants: the M1068A3 digitized command post (361), the M1064A3 mortar carrier (66), and the M577A3 command post (73). Award of this option contract will extend production of M113 conversions through March, 2008.
Separately, the US Army Infantry Center released its staffing copy of a formal requirements document for the M113 family of vehicles. This requirement reflects the intent to upgrade the M113 family for an additional 46 years of use in various roles. BAE Systems, in partnership with Anniston Army Depot since 1997, has been the sole source provider of upgraded M113A3s since 1994.
Additional $51m Delivery Orders for M88A1 Overhaul
BAE Systems will overhaul 133 M88A1 Recovery Vehicles for the US Army in 2006. The overhaul of the M88A1 is a new program for BAE Systems and its Anniston, Alabama, facility. The M88A1 is a fully tracked armored vehicle with a mission to perform battlefield rescue and recovery missions.
First armored vehicle sale to UAE
BAE Systems Land Systems OMC has confirmed an $11m order (approximately ZAR 70 million) from the United Arab Emirates (UAE) Armed Forces for a number of RG-31 mine-protected armored personnel carriers, with further orders already under discussion. The production process is underway at Land Systems OMC’s Benoni, South Africa factory, for delivery in the first and second quarters of 2006.
The RG-31 (MK3A) is a world-renowned mine-protected armored personnel carrier (MP APC) in service globally with various peace-keeping organizations and armies – including the US Army which placed an order for 148 earlier this year.
