Background Patria case

1 background

1.1 modernization of infantry vehicles
1.2 industry consolidation: light armored vehicles
1.3 european war between general dynamics , patria
1.4 purchase of patria amv

background

the patria case has european , nato horizon, , cannot understood outside horizon. first, rush modernize infantry armored vehicles western armies since 2002. second, consolidation of european armored vehicles suppliers through general dynamics acquisitions. third, commercial war between general dynamics , patria in field. last, peculiar status of arms deals implies state secret protection on arms trade , on collateral agreements. however, abuse of secrecy conceal unlawful practices such fake offset agreement, (equivalent bribery) not slovenian issue, real european problem. patria case chance @ happens in politically sensitive , covered areas of western democracies: arms , state security.

modernization of infantry vehicles

president george w. bush welcoming 7 new states nato, march 29, 2004. left are: prime minister indulis emsis of latvia, prime minister anton rop of slovenia, prime minister algirdas brazauskas of lithuania, prime minister mikulas dzurinda of slovakia, president george bush, prime minister adrian năstase of romania, prime minister simeon saxe-coburg gotha of bulgaria, prime minister juhan parts of estonia, , nato secretary general jaap de hoop scheffer.

the historic decision of u.s. administration move conflict against terrorisms outside united states @ end of 2001 led invasion of afghanistan , iraq. radical change: u.s. had not deployed large infantry on hostile grounds since 1983. decision had implications u.s. allies. ground troops need modern types of equipment fight new infantry wars. modern armored vehicles become priority: more protected, faster, deployable, interconnected new digital wars. new vehicles must capable inter-operate @ several communication levels.

air superiority no longer decisive issue. capability control ground became paramount. human cost of new occupation wars due infantry lack of adequate protection. more half of deaths of u.s. , allies caused inadequate armoured protection.

industry consolidation: light armored vehicles

pandur ii produced steyr-daimler-puch spezialfahrzeuge, part of general dynamics european land combat systems, parent company of mowag of switzerland , santa bárbara sistemas of spain.

general dynamics u.s leader in infantry vehicles, so-called mechanized infantry. general dynamics detected growth opportunity in nato , european armored vehicles market. after 2002 general dynamics planned profitable campaign of acquisitions of smaller european defense companies. between 2002 , 2003 general dynamics bought could. mowag in switzerland, steyer-daimler-puch speazialfahrung in austria, santa barbara in spain. general dynamics tried big shot: in 2004 launched hostile takeover of u.k alvis plc, bae reacted, , kept alvis under british control, later renamed bae systems land , armaments.

in 5 years general dynamics shares grew $30 $90. turnover of company climbed $13 billion in 2002 $32 billions in 2009.

european war between general dynamics , patria

major european nations such france, uk, germany, italy initiated own domestic programs replacing old generation apcs modern armored vehicles. smaller nations on other hand initiated process of international tender , procurement new advanced armored personal carriers. portugal, initiated procurement process right away.¨.

patria , general dynamics engaged in competition win on new defence contracts, notably belgium, portugal, patria overpowered general dynamics persuasive influence. patria astonished when excluded final round in portugal , belgium. patria small national company produces 1 of competitive armored vehicles on market. patria s turnover in 2005 300 million euros , in 2009 reached 500 million euro. commercial between patria , general dynamics akin fight between david vs. goliath, later 40 times size of finnish patria.

in 2003 patria , general dynamics competitors new portuguese armoured vehicles. general dynamics won contract pandur, in competition itself, general dynamics piranha; patria, third competitor, disqualified on technical reasons @ end of 2004. patria naively appealed against decision, , lisbon court dismissed patria appeal in less 40 days (by february 2005), portugal pay 365 million euro in exchange 260 pandurs , 516 million (150% of contract value) of general dynamics offset.

general dynamics - mowag piranha

then in belgian tender in 2006 finalists are: gd-steyr pandur, gd-mowag piranha, iveco centauro, , patria amv. patria lost, , general dynamicswon: 700 million euro 242 general dynamics piranha , 700 million of gd offset, accurately divided between flanders , walloonia (delivery between 2007-2012).

then czech republic. defense daily writes in dec 2005: fate have it, steyr’s pandur ii (general dynamics) , patria’s amv final 2 contenders czech republic’s $1 billion wheeled apc contract. patria won, contract goes general dynamics, pandur.

similar stories romania, ireland, denmark, lithuania, sweden, spain etc. general dynamics has conspicuous sales outside of europe: $ 6 billions of light armored vehicles saudi arabia national guard, via foreign military sales.

patria had victories against u.s. giant: croatia, slovenia, poland, estonia. , notably, united arab emirates. in 2009 sweden canceled contract award patria of $338 million 113 patria amv, restarted contract in 2010.

purchase of patria amv

in december 2006 slovenia purchased 135 patria amv infantry fighting vehicles. largest defense acquisition in slovenian history of military procurement. participants bid included patria patria amv , slovenian subsidiary of general dynamics, sistemska tehnika valuk. government chose former.