Consolidation is the name of the game, Stéphane Mayer, president of France’s GICAT (Group of land and air-land Defense and Security Manufacturers) and CEO of Nexter, told members of the National Assembly’s Defence and Armed Forces Commission at a hearing on 30 November.
“The land industry sector is still very fragmented in Europe,” worries Mayer, adding that today it is facing “really strong competition from a large number of countries which were described as emerging a few years ago but are now beginning to have a competitive industry.” One of the answers to maintaining the competitiveness and technological superiority of French and European manufacturers “would be consolidation,” he suggests.
Unsurprisingly, this ambition to consolidate goes hand in hand with the unknown elements surrounding the Volvo Group’s planned sale of its Governmental Sales business area which includes Renault Trucks Defense (RTD), Panhard and Akmat. GICAT, just like the parlementerians, “does not want to see an inrush into the French defence industry field, of possibly a foreign competitor […] which would get involved in and thus have access to the important strategic programmes which RTD is involved in.” Volvo’s project is in a consultation phase and no sale has officially been announced yet. “Nexter, like others most certainly, will take a look when the time comes,” Mayer confirmed. The two companies’ products being complementary, the GICAT president does “not have any worries concerning the [RTD] sites. Each has its capabilities, each its specificities. The project does not call for a cut in the number of employees,” he said.
Mayer added that the KNDS group (50% of which is held by France’s Nexter and 50% by Germany’s Krauss-Maffei Wegmann) also has a very clear position on the subject which is common to all the shareholders. Nothing, in theory, would hinder RD’s integration into KNDS because the group already has a structure “which allows it to open its capital to other entities or to proceed, like any company, with a pure and simple acquisition,” he noted.
But for the president of GICAT a consolidation of the land sector must also take place at a European level. “The development of joint programmes is a tool, a vector which will later allow us (…) to undertake our missions more efficiently, more easily thanks to joint materiels but also the services that go with them. It is thus a tool, a step in the direction of a future Defence Europe,” he declared. So, Paris is already planning joint programmes with Berlin through, notably, initiatives such as the Main Ground Combat System and the Combat Indirect Fire System. These projects, for the 2030 horizon, would replace, respectively, the Leclerc and Leopard tanks, and the self-propelled AUF-1 and PzH 2000 howitzers. “KNDS is a natural candidate” for these joint tank and artillery projects even if “it seems necessary that there should be bilateral agreements to define this programme and its exports,” Mayer stressed.