Nexter alliance: what next?

Details of the alliance between Nexter Systems and Krauss Maffei Wegmann (KMW) were at the heart of questions by members of the French parliament’s armed forces and defence commission during their hearing on 2 March of Stéphane Mayer, new chief executive officer of Nexter Systems.

Stéphane Mayer who was  appointed CEO of Nexter Systems effective 15th December 2015

Stéphane Mayer who was appointed CEO of Nexter Systems effective 15th December 2015

The latter reminded them that “this operation was not undertaken as a fusion” and that the timeline “to progressively put into place the organisation of a group capable of offering a joint product” is set at around 2030. But he did agree with the parliamentarians’ concerns that France and Germany have different weapons’ export policies. “The intergovernmental discussions (…) have not, to date, led to the changes that we would like,” he said, adding that one of the conditions “vital for the emergence of a European leader is the convergence of export control policies.” Distinguishing the short term from the long term is essential, he said, because even if neither the Netherlands (where the joint company between Nexter and KMW, Honosthor is registered) nor Germany “impose anything concerning the export of military materiel manufactured by Nexter in its French factories,” that will no longer be the case in 20 years when “the agreement of both countries will be required (…) if we attain our objective of a common vehicle manufactured partly in France and partly in Germany.” And, whilst stressing that “we have a few years ahead of us,” he insisted that “one of the conditions necessary for the success for this alliance is the convergence of export control regulations.

Mayer seized the occasion to state that the “major objective [of the alliance] is to become a European leader in land defence” eventually “able to offer common products which meet the operational requirements of the French Army and the Bundeswehr but also those of other European armies.” In order to do so, it will have to have “the capacity to attract the land defence actors from other European countries to form a group, like MBDA, that was constituted thanks to successive alliances, first between France and England, then with Italy and Germany.

A first step in this direction, he gave to understand, could be the purchase of TDA (a Thales subsidiary that produces 120mm mortars, and the rocket launchers of the Tiger helicopter together with their munition), “a good idea from a strategic point of view,” he remarked. But this buy-out “is not the object of any resolution or decision in the framework of our current agreements,” he stressed, adding that if such an operation “were to be considered, it would be submitted to the approval of the governance of the group under conditions which remain to be negotiated with the shareholders of TDA.

Come back tomorrow for the continuation of Stéphane Mayer’s hearing centred this time on Nexter’s order book and its futureprospects.