CAMM Opener for the Naval Missile Market: MBDA & LMCO’s MoU
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In mid-May 2013, MBDA signed an MoU with Lockheed Martin that has the potential to shake up the naval missile industry. It sounds innocuous: both companies agree to jointly explore the market for the integration of MBDA naval missile systems into Lockheed Martin’s MK-41 Vertical Launch System, and ExLS VLS/cell insert. They’ll begin with a late 2013 demonstration involving Britain’s new CAMM-M Sea Ceptor missile, but the implications reach far beyond.
Right now, the naval missile market is divided by launcher type, and many of MBDA’s missiles sit in a DCNS banlieue.
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The DCNS SYLVER family of vertical launchers have been installed on a number of ship classes, but the more popular Mk-41 isn’t integrated with key MBDA offerings. If a country chooses the Mk-41 for its ships, its long-range cruise missile will be Raytheon’s RGM-109 Tomahawk, not MBDA’s formidable SCALP Naval. Medium range air defense will be Raytheon’s RIM-162 Evolved SeaSparrow, even though MBDA’s range of solutions from CAMM-M to VL-MICA to its high-end Aster-15 might offer better fits for some budgets and threat profiles. Long-range air defense can only be Raytheon’s SM-2 or SM-6, leaving MBDA’s Aster-30 in the cold despite its ballistic missile defense capabilities. The MK-41 doesn’t even have a vertically-launched anti-ship missile yet, which could open up green field opportunities for missiles like MBDA’s Exocet MM40 Block 3. Etc. MBDA CEO Antoine Bouvier isn’t just blowing smoke when he says that:
“Possessing the broadest range of naval missiles available on the market, there is a strong logic for MBDA to join forces with Lockheed Martin whose vertical launch systems have a strong presence in the naval market. Working in concert, we will be able to offer greater choice to naval customers around the globe providing them with solutions optimized to their exact needs, which has always been MBDA’s priority.”
Lockheed Martin isn’t currently a player in the ship-launched air defense or strike missile sectors, though its LRASM-A might become a serious challenge to SCALP at some point. In the meantime, broadening the Mk-41’s range of weapons makes their VLS system much more attractive to customers like Britain, and makes the SYLVER family much less attractive for new ship designs. Adding the ExLS could give Lockheed Martin a dominant position in the small combat ship sub-sector as well.
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The question is how the partnership is allowed to go. MBDA itself is jointly owned by EADS (37.5%), BAE (37.5%), and Finmeccanica (25%).
BAE makes launch canisters for the Mk-41, and will benefit from the MoU. EADS and Finmeccanica, on the other hand, have close ties to governments in France and Italy. Those governments may want to protect the SYLVER systems they’re standardizing upon by trying to limit the scope of MBDA’s cooperation. This issue will be especially acute for France and its national champion approach to key armaments, notwithstanding the potential tradeoff of more missile work in a broadened market. On the other side of EADS ledger stands Germany, whose ships use the Mk-41 VLS.
If Italy stays neutral on the issue, and the Germans are positive about the prospects of wider MBDA integration, they could probably overcome even energetic French interference, with support from BAE. If Italy is willing to get involved, and Germany isn’t, France may be able to protect DCNS with an energetic campaign to limit Mk-41 cooperation to CAMM.
A smart CEO will have anticipated these issues, but one can’t always anticipate the full reactions of key firms like DCNS, or the political winds of government. Time will tell.
