Nexter, Thales Hold Preliminary Talks on Alliance

PARIS - Nexter is in preliminary talks with Thales as a possible alliance partner in a restructuring of the French land systems sector, Nexter Executive Chairman Philippe Burtin said March 4.
The discussions with Thales were part of "preliminary, non-binding and non-exclusive" talks, which included other companies in France and Europe, aimed at industry consolidation, Burtin told analysts and journalists as he unveiled Nexter's 2010 results.

State-owned Nexter pursued a "strategy of sector" in its talks, Burtin said. In the land sector, Thales has the TDA munitions and mortar business, and its Australian unit builds the Bushmaster armored vehicle, he said.
The discussions over a potential partnership were also at the program level, namely the Véhicule Blindé Multi-Role multirole troop carrier, which Nexter hopes to win in an international tender expected to be launched toward the end of this year, Burtin said.
Thales Executive Chairman Luc Vigneron said Feb. 14 the electronics company "could not remain indifferent to changes in the land defense sector."
Nexter posted 2010 net profit of 164 million euros ($227.8 million), up 16 percent from 141 million euros a year ago, on a 21 percent increase in sales to 1.1 billion from 887 million euros. New orders totaled 601 million euros, lifted by a Saudi Arabian order for 155mm shells for the Caesar artillery system and a French multiyear purchase of medium-caliber munitions. That compared with 2009 orders worth 1.29 billion euros.
Operating profit rose 26 percent to 185 million euros, from 147 million euros. The outlook for 2011 was for a decline in sales to about 800 million to 850 million euros, while new orders were expected to be stable, Burtin said.
The order book totaled 2 billion euros, or 2½ years work, down from 2.5 billion euros.

Roxel To Provide 258 Rocket Motors for GMLRS

PARIS - Roxel, the Anglo-French missile propulsion company, received in December an order from Lockheed Martin for a first batch of 258 rocket motors for the Guided Multiple Launch Rocket System (GMLRS), known in French as the Lance-Roquette Unitaire (LRU), said Françis Rodriguez, Roxel vice president for sales and business development.
Lockheed Martin said in a statement, "The French DGA (Délégation Générale de l'Armement) is also in the process of finalizing its selection of an upgraded fire control system to support the guided precision munitions."

Lockheed has pitched its Universal Fire Control System against a competing offer of the European Fire Control System, proposed by a consortium of three European companies. A DGA spokesman said studies are being conducted on selection of the fire control system, and an industry executive said a choice is expected by the end of the first half of the year.
Gen. Elrick Irastorza, Army chief of staff, said March 1 that French land forces of the future will need precision artillery of 1meter accuracy, day and night. The LRU offered just that capability, an Army officer said.
Roxel expects further orders for LRU rocket motors, built under license from Aerojet. The LRU system was bought under a memorandum of understanding signed by Britain, Germany, France, Italy and the United States.

U.S. Navy Seeks New Landing Craft Proposals

An updated draft solicitation for Ship-to-Shore-Connector (SSC) landing craft was issued March 1 by the U.S. Navy's Naval Sea Systems Command (NAVSEA). The draft request for proposals begins the process of building a replacement for the Landing Craft Air Cushion (LCAC) amphibious craft that first entered service in the mid-1980s.
Two primary industry efforts have been underway to compete for the new landing craft. SSC Team Textron is led by Textron Marine and Land Systems - builders of most existing LCACs - and supported by L3 Communications and Alcoa.

Team SSC is anchored by Marinette Marine working with Boeing, Oceaneering and Griffon Hoverwork, Both teams have put together proposals to build up to 73 SSCs over eight years. The first SSC is to be delivered in 2018. The request asks for bids for the first eight production SSCs to be delivered by 2020.
Proposals already shown by both teams feature air-cushioned craft with similar configurations to the LCACs. As with the earlier craft, the SSC will be 91.8 feet long and have a beam of 47.8 feet. The new craft is to carry a load of 67 metric tons - 13 more than the LCAC - have a crew of two rather than three, use a simpler and more efficient drive train, and have better environmental and communications systems.
Industry teams have until March 31 to respond.

Finmeccanica Eyes Sell-off of Some DRS Units

ROME - Three years after acquiring U.S. defense electronics firm DRS, Italy's Finmeccanica is planning to sell off some DRS units with total revenue of up to $800 million, managers said March 3.
The selloff at DRS, which saw $4 billion in revenue last year, is part of a move away from "non-core" activities. It will also help cut debt at parent Finmeccanica, CFO Alessandro Pansa told financial analysts in a meeting in London.

Some of the proceeds from the sales will also be plowed back into new acquisitions for DRS, which could be outside the U.S., said CEO Pierfrancesco Guarguaglini.
"If DRS can be more present outside the U.S., it will give the possibility to increase revenue," Guarguaglini said at the meeting.
Guarguaglini has previously said that DRS could benefit from expanding outside the U.S. market, guided by the global know-how of its parent company, Finmeccanica.
Without naming which units might be sold, Finmeccanica said it would seek to divest activities operating in "non-core segments for the group, markets with limited growth opportunities in the near future and markets where DRS lacks scale. …We are currently initiating the process to implement this portfolio optimization by 2011."
Proceeds from the sales would be partly used to help ease Finmeccanica's debt of 3.13 billion euros ($4.32 billion). Finmeccanica is also planning property sales and sale of a stake in energy unit Ansaldo Energia to reduce debt.
Targets for DRS acquisitions have already been identified by Finmeccanica, the company said, and were small to medium-sized. The company is interested in "control of enabling technologies, ease of integration within group products," and that possible acquisitions be in "key DoD programs of interest for the group that can be effectively integrated within DRS and foster growth in strategic areas."

North Korea threatens 'all-out war' over exercises

South Korean and US forces will start annual military exercises, which they say are purely defensive

North Korea has threatened "all-out war" in response to exercises by South Korean and US troops, starting Monday.

The South Korean capital Seoul would be turned into a "sea of flames", the Korean Central News Agency warned.
Pyongyang also said the South should stop sending propaganda leaflets and balloons over the border.
Inter-Korean relations have been extremely tense since 46 South Koreans died when their warship was sunk last March.
Seoul blamed the North for the incident, something Pyongyang denies.
But tensions rose even further after the North shelled a frontier island in November, killing four South Koreans.
Military talks aimed at defusing tensions and restarting dialogue broke down earlier this month.
Annual exercises About 12,800 US troops and some 200,000 South Korean soldiers and reservists will take part in the military exercises, which will last 11 days, according to US and South Korean forces.
Seoul insists the drill is purely defensive but North Korea says it is a pretext for an invasion from the South.
"The army and people of the DPRK [North Korea] will return bolstered nuclear deterrent of our own style for the continued nuclear threat... and our own missile striking action for their vicious attempt to eliminate our missiles," KCNA said.
The North routinely issues war rhetoric against South Korea and the US, but analysts say the risk of clashes is higher when the two sides are not talking to each other.
Earlier, Pyongyang said it would fire across the border if South Korean did not "immediately stop psychological warfare".
The South has been launching balloons, carrying leaflets critical of the Pyongyang regime and news about the recent democracy protests in the Arab world, over the heavily fortified border.
"South Korea is driving the Korean peninsula to overall confrontation, with beefing up anti-republic, psychological plots," the North Korean statement went on.
South Korea has also been attaching food, clothes and radios to the balloons it sends over towards the North.
Pyongyang tightly controls access to the Internet and attempts to block other sources of information about the outside world.

Iran nuclear plans: Bushehr fuel to be unloaded

The Bushehr nuclear plant has been hit by repeated delays

Iran has confirmed it is having to remove nuclear fuel from the reactor at the Bushehr power plant, the latest in a series of delays to hit the project.

On Friday, the International Atomic Energy Agency (IAEA) said it had new information on "possible military dimensions" to Iran's nuclear plans, which Iran says are purely peaceful.
The IAEA will supervise the unloading of fuel from Bushehr, Iran's nuclear envoy Ali Asghar Soltanieh said.
Iran began the Bushehr project in 1976.
Iran's Fars news agency says the fuel is being removed for "technical reasons".
The fuel at Bushehr is being provided by Russia, which built the plant and whose engineers will carry out the unloading, under the supervision of the IAEA.
"Upon a demand from Russia, which is responsible for completing the Bushehr nuclear power plant, fuel assemblies from the core of the reactor will be unloaded for a period of time to carry out tests and take technical measurements," Mr Soltanieh said, according to the semi-official Isna news agency.
Computer virus? The BBC's Tehran correspondent, James Reynolds, says diplomats suggest the entire core of the Bushehr plant is being replaced - potentially a serious problem.
There has been some speculation that the Stuxnet computer virus may be responsible, our correspondent says.
Analysts say Stuxnet - which caused problems at another Iranian enrichment facility last year - has been specially configured to damage motors commonly used in uranium-enrichment centrifuges by sending them spinning out of control.
Some experts believe that the problems at Bushehr call into question the safety and effectiveness of Iran's nuclear facilities as a whole, our correspondent says.
The IAEA report - obtained by the BBC and made available online by the Institute for Science and International Security (Isis) - says Iran is "not implementing a number of its obligations."
These include "clarification of the remaining outstanding issues which give rise to concerns about possible military dimensions to its nuclear programme".
Six world powers are negotiating with Iran over its nuclear programme, and the country is subject to United Nations Security Council sanctions over its refusal to halt uranium enrichment.
Enriched uranium can be used for civilian nuclear purposes, but also to build atomic bombs.

Iran nuclear plans: UN concern over 'military angle'

Iran has always denied its nuclear programme is aiming to develop weapons

The UN's nuclear watchdog says it has received new information on "possible military dimensions" to Iran's nuclear development programme.

The International Atomic Energy Agency (IAEA) said the report raised "further concerns" about Iran's activities.
It urged Tehran to co-operate fully with its investigations in alleged weapons experiments, saying it had not done since 2008.
Iran insists its nuclear programme is entirely peaceful.
The IAEA report was obtained by the BBC and made available online by the Institute for Science and International Security (Isis).
It says Iran is "not implementing a number of its obligations including clarification of the remaining outstanding issues which give rise to concerns about possible military dimensions to its nuclear programme".
The country was also "not providing the necessary co-operation to enable the Agency to provide credible assurance about the absence of undeclared nuclear material and activities in Iran, and therefore to conclude that all nuclear material in Iran is in peaceful activities".
"Based on the agency's analysis of additional information since August 2008, including new information recently received, there are further concerns which the agency also needs to clarify with Iran," says the report.
Among those concerns were that Iran was not engaging with the IAEA on allegations that it was developing a nuclear payload for its missiles.
Six world powers are negotiating with Iran over its nuclear programme, and the country is subject to United Nations Security Council sanctions over its refusal to halt uranium enrichment.
Enriched uranium can be used for civilian nuclear purposes, but also to build atomic bombs.
The UN has imposed four sets of sanctions on Iran over the years.
While these have made it more difficult for Iran to acquire equipment, technology and finance to support its nuclear activities, they have not stopped trading in oil and gas - the major sources of Iran's income.