Stabile Conditions

BERLIN/RIYADH | | saudi-arabien

BERLIN/RIYADH (Own report) - With the help of business deals with Arab dictatorships, the German-French EADS Corp.'s armaments sector will double its sales. This was announced by Stefan Zoller, the CEO of the sector. According to Zoller, who is German, this branch of the corporation, which changed its name last autumn from "EADS Defense and Security" to the more PR-compatible "Cassidian", will seek its clients mainly in threshold countries because EU arms budgets are stagnating. Alongside India and Brazil, according to Zoller, the countries receiving the most attention over the next few years will be Saudi Arabia and the United Arab Emirates. Cassidian has already been engaged in Saudi Arabia for two years with the reinforcement of its border security - a project costing billions with the participation of the German federal police. Because the regime in Riyadh had insisted that its border guards be trained in how to handle border security facilities and equipment, German police officers had to also be flown in. According to reports, Cassidian is financing this mission. The deal is being processed through the German Association for International Cooperation (GIZ) a "development" agency.

Infantryman of the Future

The stagnation of European arms budgets is the reason for Cassidian's offensive beyond the EU's borders. The EADS armament sector is still earning on its contracts with the Bundeswehr and other European military forces. Just recently, for example, it landed a contract with the Bundeswehr for the delivery of another 400 units of the basic system "Infantryman of the Future" combat equipment, needed for the war on Afghanistan. Already earlier it had provided the army, navy and the air force with 2,500 units of the type of equipment, including night-vision equipment, cameras as well as unit radio systems and infrared targeting apparatuses. Cassidian landed a contract also in March with the Swiss armasuisse procurement authorities, worth 20 million SFr, to standardize for mass production, the "Swiss Army soldier modernization program" (IMESS). "The tactical leadership capability from the company level to the single soldier," for example, should be optimized and otherwise "better night fighting and reconnaissance capabilities" achieved.[1]

Rates of Return Threatened

But such costly contracts no longer suffice to insure future growth and a durable increase in the rates of returns. Though last year, Cassidian was able to increase its rates of returns by approx. eleven percent - to six billion Euros - in 2010, new contracts declined by 4.3 billion Euros - 46% of the previous year. The rates had declined from 8.4 percent in 2009 to 7.7 percent in 2010. To reverse this tendency, the head of this sector, Stefan Zoller seeks to enhance expansion abroad. "We have to go where there are double-digit military budget increases," he said, for example "in India, Brazil or the Middle East".[2] Zoller sees the possibility of doubling the current non-European share of sales to reach 60 percent by 2020, achieving a total sales volume of around twelve billion Euros. The company has already initiated its first steps in this direction. In Europe approx. 600 jobs have been canceled, while new factories are planned to be built in the countries of Cassidian's main armament customers.[3]

Libya: "A Very Good Performance"

India is named as a particular example. New Delhi is looking to buy new fighter planes. Cassidian is hoping to be able to sell 126 Eurofighters. The competition is heavy. In rivalry with Cassidian for the contract of billions, are Boeing, Dassault and Lockheed Martin. In February, the German Defense Minister at the time, Karl-Theodor zu Guttenberg personally attended India's air show in Bangalore, in the south of the country, to promote Cassidian. In New Delhi, the enterprise is not only advertising with plans to have a large part of the production done in India, but is also offering to develop a new super-radar for India. The company considers the war on Libya as very important, because this will be the first deployment of Eurofighters. Cassidian says that the plane has given a "very good performance" in this attack.[4] An Indian officer has confirmed that the Indian Air Force is also carefully watching the West's attack on Libya.[5]

Command and Control Centers

A few years ago, Saudi Arabia had already purchased 72 Eurofighters. This dictatorship at the Gulf has become a regular Cassidian customer, which has set up a busy branch office in Riyadh. In early 2008, the Saudi Arabian regime ordered command and control centers for ground-based anti-aircraft defenses, at the time, from the "EADS Defence and Security." This was followed in 2009 by a contract for the installation of border security along the approximately 9,000 km of national borders. Other sectors of the EADS Corp. also have lucrative relations with Riyadh. Just recently the military department of the EADS subsidiary, Airbus, announced that the first Saudi Airbus Military A330 MRTT - a tank aircraft - had successfully completed its virgin voyage. Business will be expanded even further and contribute to Cassidian doubling its rates of returns.

Border Security

How Cassidian won the contract for the Saudi Arabian border security provides a good example of the German government's involvement in EADS' business. The company says that that contract has helped "to enhance its position as world leader in the domain of national security systems."[6] Riyadh awarded Cassidian the contract only on the condition that its border guards be trained in how to use the security facilities and their equipment, not only by company personnel but also by German federal police. The fact that the federal police is fulfilling Saudi demands for these training measures, had already been reported a while ago by german-foreign-policy.com.[7] According to recent reports, Cassidian is financing this foreign mission from company funds. This deal had been managed by the state-owned German Association for International Cooperation (GIZ formerly GTZ), which, in public, acts as if it is a "development" agency.[8] The remarkable flexibly managed business deal, which was conducted by the former Interior Minister, Wolfgang Schaeuble during the CDU/SPD Grand Coalition, is helping to stabilize both the Saudi regime and Cassidian's rates of returns. The expansion of the border security facility, which had been initially calculated to cost two billion Euros, could, according to expert estimates, now cost up to ten billion Euros.

Insignificant

Of course, the deal was only made because it fit into Berlin's geostrategic concepts. Just as India is being armed to counter the People's Republic of China,[9] Germany is supporting the Saudi Arabian military and other repressive organs, to stabilize the Gulf dictatorships and position them against Iran, the recalcitrant potential leading Persian Gulf power. (german-foreign-policy.com reported.[10]) That the Saudi regime is living up to its side of the deal and insuring the necessary "stable conditions" on the Arabian Peninsular and now has intervened in the repression of the rebellion in Bahrain [11] has caused but a slight stir of outrage in German public opinion. It is clear to both Riyadh and Berlin that this is insignificant, as long as the Saudi repression and Cassidian's rates of returns promote the prosperity of western elites.

[1] CASSIDIAN erhält Auftrag für Soldaten-Modernisierungs-Programm der Schweizer Armee; www.bdli.de 02.03.2011
[2] EADS rüstet in fernen Ländern auf; www.ftd.de 29.03.2011
[3] Rüstungsriese Cassidian streicht 600 Stellen; www.handelsblatt.com 24.03.2011
[4] Das Bombengeschäft; www.spiegel.de 25.03.2011
[5] Tracking Libya, with eye on fighters; www.telegraphindia.com 23.03.2011
[6] Die globale Sicherheit unterstützen; EADS aero-notes 28, Dezember 2010
[7] see also Water as a Weapon
[8] Rüstungskonzern zahlt Einsatz von Bundespolizisten in Saudi-Arabien; www.spiegel.de 02.04.2011
[9] see also Am Indischen Ozean and China's Rival
[10] see also Hegemonic Conflict at the Gulf, Fragile Use of the Gulf Dictatorships and Kampf der Titanen
[11] see also Submachine Guns and Ammunition