Military Industrial Cooperation Between Spain and

Australia

HE Mr Enrique Viguera

Ambassador of Spain to the Commonwealth of Australia

Canberra, 17 June 2015

Contents1. Outlook of Spain’s Military Industry2. Military Alliances and Operations3. Australia-Spain Military Cooperation4. Australia-Spain Industrial Military Cooperation5. Conclusions

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OUTLOOK OF SPAINOUTLOOK OF SPAIN’’SSMILITARY INDUSTRYMILITARY INDUSTRY

1.1 Main Figures

• Budget 0,94% GDP in 2014.

• 2015 first year of increased military spending since 2009 but funds will probably not exceed its pre-crisis peak before 2020.

• 5.5 billion Euros production (2014): Airbus Defence and Space (50%), Navantia (9%), Indra (8%).

• 2.6% worldwide defence sales (between 2007-2011).

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1.2 Exports

• 7th world’s military exporter: 3,907 Million € 2013

• 70% total defence resources to exports: 54% aeronautical; 24% shipbuilding; 8% IT, electronic, missiles and space, 24% auxiliary, armament, land vehicles

• 100 companies core of the defence (20,000 direct jobs, 50,000 indirect) but 350 companies reporting sales to defence.

• Main markets (2014):▫ UK (1st), France (2nd) Saudi Arabia (3rd), Germany (4th)▫ Turkey (5th)▫ Australia (6th)▫ Latin America: Mexico, Colombia, Chile, Venezuela, Brazil

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1.3 Aerospace systems (I)

• Spain as one of the true drawing boards to runway aircraft manufacturing industries in the world. Long manufacturing tradition and strategic sector: CASA now within Airbus Defence and Space: C212-400, CN235, CN295

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• Three regional clusters (Andalucía, Madrid and Basque Country). Exports to over 60 countries. World leader in military transport & humanitarian support, surveillance & border/maritime protection, refuelling.

• main company with 10 industrial installations employing more than 10,000 direct and 50,000 indirect. 2,400 supplier companies. More than 1,000 aircrafts sold.▫ Eurofighter wing assembler & manufacturer, delivery and services▫ A400M assembling plant, delivery & training▫ A330 MRTT manufacturing, delivery & services ▫ Helicopters NH90, EC135 and Tiger manufacturing of parts, assembling &

maintenance

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1.3 Aerospace systems (II)

1.4 Naval Systems (I). Long tradition

• Spain’s historic industry (almost 300 years): Creation of military arsenals and shipyards in Ferrol, San Fernando and Cartagena for construction and repair of Spain’s Armada ships• Navigation history (Pacific) ▫ Magellan/Elcano, first world tour▫ The Philipines and Retroviaje Manila/Acapulco, Galeón de Manila. Pacific as

“Spanish Lake” (Íñigo Ortiz de Retes, PNG; Mendaña Solomon twice; QuirósVanuatu “Austrialia del Espíritu Santo” (and almost Australia 2nd try); Torres Strait (almost Australia).

▫ British colony 1793 visit by Malaspina/Bustamente trip to Sydney (Descubierta & Atrevida frigates). Recent evidence by Australian researcher in Spain’s Naval Archives: plans by Bustamante to Charles IV (Godoy) to attack Sydney from America with 200 ships

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1.4 Naval Systems (II)

• Navantia main shipbuilder. 100% public SEPI. 5000 employees, around 1000 naval engineers with industrial facilities in▫ Ferrol-Fene (Shipyard, 3 docks, & shiprepair 4 docks), ▫ San Fernando-Puerto Real-Cadiz (Shipyard 2 docks &

shiprepairs 7 docks). FABA systems (combat systems, naval weapons, platform control and security systems, command and control, fire control systems, life cycle support, integrated control systems)

▫ Cartagena (2 docks, floating & dry). Engine factory.

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1.4 Naval Systems (III)• Main military products: ▫ Offshore Patrol Vessels (OPV) Avante▫ F-100 frigates (US communication

systems and Aegis)▫ Amphibious ships (LHD, BAM –Buque

de Acción Marítima-, LCMs)▫ AOR Cantabria▫ Submarine capability: Agosta Class

Submarine Tramontana S74, S70 Mistral (Scorpene) and S80.

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• Participating in 50 commercial actions in 20 countries. • Around 50% export

1.5 Information Technology

• Various players, including missile technology (Sener) and advanced satellite capability (HISPASAT)

• Indra as a main player (20% shares repurchased by State in 2013 -337 millons Euro).

• High range of military products: radars, automatic test systems,airdefense systems, simulators, airbionics, airtraffic management systems, electronic warfare systems, command and control, fire control, sattelite communciations, etc.

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MILITARY ALLIANCESMILITARY ALLIANCESAND OPERATIONSAND OPERATIONS

2.1 Military Alliances and Operations

• Middle size NATO country (47.5 million). 7th in troops: 120,000 active, 80.000 paramilitary. 8% women• Close cooperation within EU (EDA Chief Executive from Spain) and

bilateral European partners (Germany, France & UK), particularly in aviation sector –Spain has almost 5% of Airbus Group capital-(Airbus 67%, Airbus Defence and Space 22%, Airbus Helicopters11%)–and participating in different projects like Eurofighter, Eurocopter etc.• Close military cooperation with the US: 2 major joint military facilities

in Spain: ▫ Rota since 1953, naval/air. Will become base of 4 Arleigh Burke-class

missile-guided destroyers (Aegis). The 1,300 military personnel will double in the next years. Navantia maintenance and repair.

▫ Morón Air Base of Special-Purpose Marine Air-Ground Task Force Crisis Response-Africa. The 850 marines and sailors can reach 3,000 within the next few years

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2.2 International Operations• Approximately 2,000 military in 12 international operations (5th country

worldwide in number of troops abroad)• Resolute Support in Afganistan Herat (485)• Inherent Resolve Coalition against Daesh in Iraq: (300; 200 trainers at Build

Partnership Capability in Besmayah; 95 at US Bagdad Diplomatic Support Center; 11 General Headquarters Kuwait & Bagdad).• FPNUL UN provisional force in Lebanon (700)• EUTM-Mali support operations to Mali (180 Spaniards & command from 600).

Bamako, Dakar & Cape Verde• EUMAN Central African Republic (150) and Gabon• EUCAP Nestor/Ocean Shield/ EU Atlanta/EUTM Somalia (300) • Patriot Battery in NATO Integrated Air and Missiles Defence System Adana

(Turkey) (150)• EUFOR-Althea in Bosnia-Herzegovina (10)

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January 2015

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AUSTRALIAAUSTRALIA--SPAIN SPAIN MILITARY COOPERATIONMILITARY COOPERATION

3.1 Overview• Same principles and values. Maritime tradition in both countries.• 2007 Spain’s (Naval) Military Attaché in Canberra, 2009 (Naval) Australia’s

Military Attaché in Madrid

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• Navy Diplomacy: Juan SebastiánElcano (1920, 1988); 2007 F-100 Álvaro de Bazán, 2012 Espérides(200 years Malaspina), 2013 Cantabria. 2015 Anzac Frigate recently in Ferrol.

• About dozen Memoranda of Understanding on bilateral cooperation, consultations RAN/Armada, protection of classified information, exchange of visitors, delegations, etc.

3.2 Official Visits and Meetings

• Political delegations (most recent): Australian Minister of Defence and Minister for Defence Materiel (2009), Defence Parliamentary delegation led by Senator David Johnston (2012), Defence Minister of Spain (2013), Defence State Secretary of Spain (2014), regular MOD international meetings (NATO etc. last May Shangri-La Singapore).

• High ranking officials: AJEMA, Sea Power Conference in Sydney (2012) and Canberra Commissioning (2014), Chief of the Armada (2013), JEMA (2013 & 2014). Admiral Griggs Madrid (2014).

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3.3 Sustained Military Cooperation

• 2 permanent Armada Navy Officers LHD Sydney. • 2 RAN officers: 1 in Madrid and 1 in Ferrol (31 Escuadrilla de Fragatas).• Regular RAN training with F-100, LHD, LCMs. • 60 navy personnel trained during Cantabria mission

RAN/Armada cooperation as the kernel of Spain-Australia bilateral relations

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AUSTRALIAAUSTRALIA--SPAIN SPAIN INDUSTRIAL MILITARYINDUSTRIAL MILITARYCOOPERATIONCOOPERATION

4.1 Aircrafts

• Airbus Defence and Space present in Australia since 90’.• Air 5402, December 2004. 5 330 MRTT plus 1 full simulator• Industrial facility at Brisbane (120 employees)• Brilliant job over Iraq• 2 new tankers? White Book 2015

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4.2 Indra Australia (I)

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Number of radio navigation systems rolled out by Indra now surpasses 200.Several civil tenders: Infrastructure, Air traffic control etc. Two mainmilitary:

90 Professionals Sydney basedRevenues: A$50M

2012: TACTICAL COMMUNICATION ROUTERS FOR THE RAAF (6)

….providing interoperability and connectivity to existing communications infrastructure as well as tactical Ground-Ground and Air-Ground-Air voice communications networks. The most advanced and capable communication routing systems in the world

Indra Australia

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4.2 Indra Australia (II)

2014: Deployable Defence Air Traffic Management And Control System (Ddatmcs)

….delivering the Australian Defence Force (ADF) a deployable Airspace Management capability, providing Joint Battlefield Airspace Controllers (JBACs) with sophisticated equipment in a highly mobile environment. The primary mission of the DDATMCS is to support the provision of Air Traffic Management (ATM) services in support of the Australian Defence Force operations.

Indra Australia

4.2 Indra Australia (III)

• Indra will design, develop, construct, integrate, test, deliver, install and commissiontwo Level 1 and one Level 2 DDATMCS.

• Indra has an active interest in the following Defence projects:

▫ Land 19 Phase 7B – replacement of Ground-Based Air Defence Capability▫ Sea 1448 Phase 4B – replacement of ANZAC Class Primary and IFF radar▫ AFM1010,1011 and 1012 – replacement of ADF’s Ground-based Navigation

Systems▫ SEA 1439 Phase 5B2 Stage 2 – Upgrade of Collins Class Submarine

SATCOM▫ SEA 1000 – Submarine replacement for Collins Class

4.2 Indra Australia (IV)

4.3.1 Naval - LHDs

• LHD program: 2 LHDs BAE Systems subcontracts Navantia for design and construction in Spain.

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• On time and schedule of Canberra (commissioned) and Adelaide (sea trials).

• ‘Great success’ project where Navantia has been a leading actor.• Guarantees and life cycle: next 30 years of cooperation (December 2014).

4.3.2 Naval – AWDs (I)• Sea 4000

• DMO subcontracts Navantia design three destroyers based on Spain’s F100 frigates (Álvaro de Bazán).

• AWD (DMO/Raytheon/BAE)

• Navantia, not in the Alliance, supplied 5 blocks from Spain for 2nd AWD and brought to Adelaide new highly skilled personnel to assist speed up construction.

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4.3.2 Naval – AWDs (II)

• 23 May: AWD Hobart launched and 2017 delivery schedule

• But 2 years delay and 2 billion AUD overcost

• ‘Reform’ program: new management scheme tender. BAE, ASC, Navantia…

• Navantia will propose its own management system.

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4.3.3 Naval – Navantia Pty

• Establisment of Australian Navantia Pty (first case for a Spanish public company). • 50 employees in Melbourne moving to Canberra by the end of the year. Other

employees in Adelaide and Sydney.• Further enlargement and “Australianization”• Institutional support by Embassy in Australia

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4.3.4 Naval – Other Projects (I)

• IP 2048 (2011). LLC program based on LCM 1E Navantiafor the Armada. Principal contractor Navantia for 12 LCMs, 8 delivered, 4 last expected for end of this year.

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4.3.4 Naval – Other Projects (II)• SEA1654. 2 AOR limited tenders between Aegir-18 Daewoo (South

Korea) and Cantabria Navantia plus maintenance contract of 5 years.

• Tender in August. Decision by the end of the year. Similar ship to NZ

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4.3.4 Naval - Other Projects (III)

• SEA 5000. Future frigates in substitution of Anzac frigates (2020 and 2025). Based on F110 Navantia Hull (CEA Radar + SAAB combat system)? Spain’s Armada future destroyers.

• SEA 1179. 4 Offshore Patrol Vessels (2015 White Paper)

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CONCLUSIONSCONCLUSIONS

5. Conclusions• 2007 big naval contracts as starting point of enlarged bilateral

relations. Short but intense bilateral history with essential industrial military component. Bright future.

• Future bilateral naval industrial relation assured:▫ LHD life cycle contracts.▫ Potential more involvement in AWD▫ Future potential interest: SEA 1654 and SEA 5000 and others

• Growing presence and progressive ‘Australianization’ of Navantia

• RAN/Armada core of bilateral relations

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Thank you!

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