Offset Exposure
* The Financial Times and IHS Jane’s estimate that a dozen of the top prime defense contractors have a combined $75B worth of offset obligations, though there’s very little transparency around these deals. Lockheed Martin and Boeing lead the list, which is driven by large contracts in the Middle East and Asia. These offsets take sometimes surprising forms such as technical help provided to fisheries in Oman. More in the video below:
US Gov’t Shutdown Watch
* Attendance at defense trade shows, already down because of sequestration, is further depressed by the shutdown.
* The Congressional Research Service wrote a report [PDF] on the effects of the shutdown on DoD.
France: FMS in the Works; New Frigate Program?; Industrial Worries
* France’s defense minister told Les Echos [in French] that the lack of a legal mechanism allowing direct state-to-state relationships had resulted in the loss of some export contracts for his country. A setup akin to US Foreign Military Sales (FMS) was approved in principle by President Hollande last month and should be implemented within 6 months.
* Le Drian also reiterated his interest for a frigate program lighter and cheaper than FREMM, prosaically dubbed Frégate de Taille Intermédiaire (FTI, or Frigates of Intermediate Size), with an eye on exports. He plans to decide in 2016 whether to pursue it. This could keep [in French] DCNS’ ship designers busy.
* But flat budgets – at best, once you factor in uncertain funding from one-off asset sales – are getting the French defense industry worried. Christian Mons, the head of a couple of defense trade groups, fears [in French] full rate production of the VBMR infantry vehicle won’t start before 2025, or 10 years later than planners of the Scorpion modernization program had originally anticipated.
(Failed) State Insecurity in Libya, Egypt
* Libyan Prime Minister Ali Zeidan was released after being kidnapped by a militia supposed to protect parliament. This came apparently in retaliation for his support of an American raid that led to the capture of an Al Qaeda leader last Saturday.
* Reuters explains some of the underlying drivers of the recent coup in Egypt:
“Egypt’s Interior Ministry, which controls all of the country’s police forces including state security and riot police, never forgot the chaos [at the end of Mubarak’s regime when Muslim Brotherhood prisoners killed their way out of prison…] Officers swore revenge on the Brotherhood and Mursi, according to security officials.”
* The US State Department made yesterday’s press reports official: deliveries of major weapon systems to Egypt, from F-16s to Apaches, are suspended.
Russia Reorganizes Roscosmos
* Russia’s prime minister appointed former deputy defense minister Oleg Ostapenko to head and restructure their troubled space agency.
Stellar Ninjas, At Sea
* Today’s video reviews the latest tests conducted by the US Navy and Missile Defense Agency (MDA) with Aegis BMD 4.0 and SM-3 block IB missiles:
