BAE Systems Realigns Naval Business

By AMI INTERNATIONAL

AMI International Inc., Bremerton, Wash., is an international consulting and naval intelligence services company located on the Web at amiinter.com.

BAE Systems has announced that it is taking the next steps in the ongoing restructuring of its naval businesses by moving forward with the realignment of the Sea Systems group into three basic components. This realignment-- announced on 10 March--is being implemented in order to better manage future naval programs that are currently spread out across the United Kingdom.

The three basic components of the Sea Systems group will include:

Submarine Business Unit: This unit will include the Barrow facilities and staff, the Astute-class/Swiftsure-class update teams at Farnborough and Weymouth, and the Astute/Swiftsure/Trafalgar-class submarine integration facilities at Ash Vale. This facility will fully transition following the expected completion of the Albion-class LPD program in mid-2003.

Naval Ships Business Unit: This unit will comprise all Clyde-based facilities (Govan and Scoutstoun) and staff, including the Surface Ships and Type 45 Destroyer teams, as well as the Type 45 Destroyer team at Filton, and the Type 45 shore-based integration team. In addition, these facilities will be charged with construction of the largest section of the two future aircraft carriers, with final assembly at Rosyth dockyard in Fife.

Underwater Systems Business Unit: This unit will be responsible for all business units and activities that are currently at Waterloo.

BAE Systems was forced to reappraise its naval business units following difficulties in the Astute submarine program. The company is now taking steps to better align the naval businesses in order to simplify the management framework as it moves forward with several major procurement initiatives--including the Astute Submarine Program, the Type 45 Destroyer Program, and the Future Carrier Program--at a time when the company is under intense scrutiny from the British Government due to program delays and cost overruns.

Interestingly, the much discussed purchase of the majority share of STN Atlas's naval business and incorporating it within the Underwater Systems Business Unit has not taken place.

Last Collins-Class Submarine Joins Royal Australian Navy

The sixth and final unit of Australia's Collins-class submarines has been commissioned in the Royal Australian Navy. The HMAS Rankin (SSK 78) was commissioned at the HMAS Stirling Fleet Base on 29 March 2003, ending the nation's first indigenous submarine program and probably the most complex shipbuilding project in the nation's history.

Built by the Australia Submarine Corporation (ASC), all six Collins-class submarines were delivered at a final cost of approximately $3.4 billion, in essence more than $500 million per unit, considerably higher than the cost of the average diesel-electric submarine available on the international market. Most of the additional costs are associated with infrastructure improvements at ASC and training for submarine construction, as well as repairs and upgrades that are usually associated with a country that attempts to build a complex system for the first time.

Unfortunately for Australia, ASC will no longer have any new program to sustain its work force now that the Collins class is complete. ASC, like every other shipyard in Australia, is facing severe over-capacity as many of the naval programs of the 1980s and 1990s are now complete with no significant orders for many years. Although considered extremely effective by allied navies that have operated with it, the Collins class was wrought with problems that delayed the final deliveries by two years and resulted in program cost overruns of as much as $700 million.

Canadian Navy Lease Third Upholder Sub

The Canadian Navy has taken delivery of the third Upholder-class submarine leased from the United Kingdom. The Cornerbrook--the third vessel of the Canadian Navy's Victoria class--will go through a maintenance period in Canada prior to her commissioning in late 2003. Originally scheduled to have already been delivered, units two (Windsor) and three (Cornerbrook) were delivered a year late, and unit four (Chicoutimi) also is scheduled to be delivered a year behind schedule in 2004.

The Canadian Navy, which decommissioned all three of its own Oberon-class submarines between 1998 and 2000, decided to lease the four Upholder-class submarines from the United Kingdom to regain its lost submarine capability. In 1998, the Canadian Navy signed an eight-year lease worth $525 million for four Upholder-class submarines, which are being reactivated by BAE Systems under a separate contract.

Taiwan Reaffirms Defense Commitment for Next Decade

During the second half of 2002, the Taiwanese Ministry of National Defense (MND) began a review of its procurement priorities for the next decade. The MND periodically reviews the plan--known as the 10-year projection--in order to incorporate changes to the long-term plans in relation to the strategic balance between China and Taiwan. Although relatively intact from 2001, the plan offers a glimpse of the naval procurement priorities now slated for the coming decade (2003-2012):

* Procurement of four Aegis guided-missile destroyers under a $4.6 billion program starting in 2009. Of note, this program has not been approved by the United States, which still intends to sell the four Kidd-class guided-missile destroyers to the Taiwanese Navy. A letter of acceptance for the Kidd class is anticipated by mid-2003; the first delivery is expected in 2005.

* Procurement of eight diesel-electric submarines beginning in 2006.
* Purchase of twelve Sikorsky MH-53 Sea Dragon mine countermeasures helicopters for $1.04 billion over the next decade.
* Purchase of twelve P-3 maritime patrol aircraft for a total of $2.82 billion over the next decade.

Under the 10-year projection, the Taiwanese Navy--under the heading of sea dominance--would receive 49 percent ($10 billion) of Taiwan's defense procurement funding for the next ten years.

Royal Schelde Delivers Destroyer To Royal Netherlands Navy

The Royal Netherlands Navy (RNlN) has taken delivery of its second De Zeven Provincien-class destroyer, the HRMS Trom, the second of four air-defense and command destroyers that will be built for the RNlN by Royal Schelde (Damen Shipyard Group). The first unit, De Zeven Provincien, was commissioned in March 2002, and the final two units--De Ruyter and Evertsen--will be commissioned in 2004 and 2005, respectively.

The Provincien class is the first to operate the APAR multifunction radar--developed by Thales Naval Nederland--which is integrated with the Raytheon long-range SM-2 Standard missile, and may be integrated as well in the future for the Evolved SeaSparrow Missile (ESSM) and Theater Ballistic-Missile Defense (TBMD). *