Antoine Bouvier, Paris

MBDA − a test case for a realistic European Armament Cooperation? The benefits of 10 years of integration in

the missile sector

Interview with Antoine Bouvier, CEO of MBDA, Paris

The European: Mr. Bouvier, MBDA will be celebrating its tenth anniversary later this year. What does this mean for you? Mr Bouvier: It was actually on 18th December, 2001 when BAE Systems, EADS and Finmeccanica, the three major forces in the aerospace sector in Europe, signed the agreement which would pool all their missile activities into a new company, MBDA. From this union, a model has emerged that is very special, even unique, in the world of defence.

The European: MBDA operates within a particularly sensitive area. Mr Bouvier: Indeed, namely guided weapons − also referred to as complex weapons − which feature in the range of defence equipment that delivers effects and which are capable of conferring superiority during a military engagement or confrontation. Although its activities see it intimately linked to state security and sovereignty, MBDA has established technological and industrial capabilities in four major European nations (France, Germany, Italy and the United Kingdom). In due course, this will be five as a result of our positioning strategy in Spain.

The European: What is the added value of such cooperation? With four or five partners, won’t cooperation become too complicated? Mr Bouvier: Cooperation is not an end in itself. To be viable and lasting, it has to take the best of each one of its different elements so that the operational excellence of products and programmes achieved together exceeds the individual capability of each nation working in isolation.

The European: Could you illustrate this? Mr Bouvier: If I had to give just one example of this philosophy, I would choose the beyond visual range, air-to-air missile Meteor programme for which MBDA is the prime contractor and in which the five nations I mentioned above, as well as Sweden, are cooperating. This missile, which will be in production as of 2013, will ensure a clear, long-term air superiority for Europe’s three combat aircraft: Gripen, Rafale and Typhoon. It will also contribute to the renewed appeal of these aircraft on the export market.

The European: Finally, in a Europe where budgets are witnessing a long-term downward trend.

Antoine Bouvier Antoine Bouvier is Chief Executive Officer of MBDA since June 2007. He was born in Paris in 1959 and graduated from the Ecole Polytechnique (1980 – 1983) and the Ecole Nationale d’Administration (1983 – 1986). From January 2002 until joining MBDA, he was CEO of ASTRIUM Satellites. Prior to that, he was Executive Vice President in charge of Eurocopter’s Commercial Helicopter Division. In 1990, he joined Aerospatiale’s Commercial Aircraft Division. From 1992 until 1994, he was Secretary General and Industrial Director of the ATR GIE. Between 1994 and 1998, he was ATR’s Vice-President of Operations, going on to become President of the ATR GIE from 1998 until 2001.

Mr Bouvier: The viability of MBDA, as is the case without doubt for all defence businesses, rests on a strategy committed to export and globalization. In this respect, MBDA’s distinct model rests on four pillars: European cooperation, national sovereignty, operational excellence and globalisation. I will now look at each one of these in more details.

The European: Yes, it would be fine to learn about the setup of your company. Mr Bouvier: Fifteen years ago, what is now MBDA used to be six national missile companies, all competing with each other, all having very strong culture, history and vision of where the missile business is going. In these 15 years, we have been able, step by step, to set up what is now MBDA, an integrated European company with a unified vision.

The European: Wasn’t the first significant step in 1996 the formation of Matra BAE Dynamics (MBD)? Mr Bouvier: Indeed, this came about when France and the UK launched the SCALP/Storm Shadow stand-off missile programme together as an alternative to U.S. procurement. Loo - king back, this can be seen as a strong vote of confidence in Anglo-French cooperation. The second step came in 2001 with the formation of MBDA and, with it, the inclusion of MBDA Italy and the subsequent introduction of MBDA Germany in 2006.

The European: Will the experience you have help in creating new forms of cooperation with nations’ administrations?

40 Mr Bouvier: During this time, MBDA has acquired an unparalleled experience in balancing cooperation between European countries while still respecting individual strategic priorities. This unique experience is no longer limited to programmes, but is gradually being extended to all areas of the business through an industrial and capability strategy negotiated with its domestic countries. In the United Kingdom, through a Port - folio Management Agreement signed with the Ministry of Defence in March 2010.

The European: And what is the role of MBDA? Mr Bouvier: MBDA will lead the transformation of the Complex Weapons sector for the next ten years. It will transform the way these weapons are supplied and supported in order to de - liver the best equipment to the front line, while sustaining a healthy UK industrial base and bringing significant savings for the taxpayer.

The European: How far are you in this partnership? Mr Bouvier: This state-industry partnership is now well understood in France as well. Hence, at the London summit on 2 nd November 2010, the French and British governments called on MBDA to participate in the reorganization of the complex weapons sector as the single European prime contractor. We take particular pride in the final declaration of the summit

which states that this experience will serve as a test case for the rest of the defence industry.

The European: I have some doubts if the newly agreed-upon French-British cooperation would be successful. We saw two agreements in the last 25 years on deep cooperation without any result in the end. Mr Bouvier: This Franco-British rapprochement might be criticized in some quarters for being seen to be creating a twospeed Europe as far as defence is concerned. At MBDA, we see this completely differently. Just as the launch of the SCALP / Storm Shadow programme between France and the United Kingdom 15 years ago enabled the foundation of a first joint business which quickly expanded to include four countries, the observations and principles of the industrial policy that have inspired the Franco-British rapprochement of today could be shared by all.

The European: But the strategic interests are not shared with other European States. France and the UK are nuclear powers with totally different horizons than e.g. Germany or Poland. Mr Bouvier: Missiles and complex weapons lie at the heart of sovereignty. This is even more true in relation to deep strike and air superiority. Yet France and the United Kingdom now recognize that they can not independently assure the level of funding and technology necessary for this sovereignty and are both in agreement on the need for mutual dependence.

The European: This new framework goes well beyond what we have already come to understand by cooperation. Mr Bouvier: Cooperation has until now taken place pro gramme by programme. This new framework has many im plications. Accepting a certain level of dependence and specialization for a given nation in turn means ensuring its partner nations have full access to its specialized skills and technologies and are prepared to do so for the long-term. We need a level of mutual commitment to the investments made by each party in the technologies that will be shared by all. This commitment must serve a product policy that reflects the acquisition policies of partner countries, as well as the operational requirements and equipment needs of their respective armed forces.

The European: The French UK operation in Libya conforms to what you said, but it also fits with my strategic understanding. Is this the beginning of adapting operational requirements, thus creating centres of excellence? Mr Bouvier: In other words, specializing industry through centres of excellence, thereby making savings while maintaining the skills base, guaranteeing access to technologies and converging of operational needs are all closely linked. In this respect, I am convinced that the present experience gained by the British and French conducting operations in Libya will help converge future arms requirements for both of their air forces.

The European: Let me come back to some figures to situate MBDA. In the missile field, what is your standing in Europe? Mr Bouvier: Ten years ago, the creation of MBDA was part of a wider trend leading towards the concentration of defence industries in the western world, a move reflecting the end of the Cold War and its logic of weapons mass production. MBDA now represents 70% of the European missile industry in terms of sales and is able to export 40% of its production. If only because of its size, MBDA has become the sole business able, within the current context of contracting defence budgets, to guarantee security of supply with regard to missile technology to its domestic nations.

The European: The EU, supported by European industries, is striving for a common security and defence market with an independent technology and research base. Will this be sufficient for the European defence industries? Mr Bouvier: Still, since MBDA’s creation, the challenges have increased tenfold. European nations are deployed in an unprecedented number of overseas operations (Afghanistan, Iraq, Gulf of Aden, Libya, Ivory Coast etc.) which are putting significant pressure on their armed forces and equipment. The budget crisis which is besetting Europe today makes it even more urgent to better coordinate procurement policies between different countries. But that’s not enough. The European defence industry will not maintain its position in the world without exploiting the growth opportunities in emerging countries which, understandably, expect that their own investment will serve their industrial base.

The European: The example of MBDA shows that a pure defence company can survive. Mr Bouvier: Thanks to its 15 year track record of managing balanced cooperation, MBDA possesses an unmatched understanding of the very close link between the preservation of its customers’ sovereignty and the necessary search for industrial efficiency. This expertise is a unique asset when it comes to seizing the opportunities offered by globalization to the benefit of our domestic customers.

The European: Could MBDA serve as an example for Europe? Mr Bouvier: After all these years, we at MBDA are well aware that each new defence review carried out by our domestic countries confirms the need to specialise in their technologies of excellence, to cooperate with their closest allies, and to pass on, through exports, the structural reduction of European investment levels. This is the very same model on which MBDA was founded. In all reality, it is difficult to see other sustainable model in existence within today’s European defence industry.

The European: Mr. Bouvier, my congratulations to the 10 th anniversary of MBDA and thank you very much for the interview.