Mr. Louis Gallois
Global Security—The Growing Challenges
EADS has been supporting the International Workshop on Global Security for many years, and is proud that, this year again, so many leaders in charge of defense and security have gathered here in Berlin to discuss security challenges. This is the fifth time that the workshop has come to Berlin, and I can hardly imagine a city more valid for it. Because of the wall that divided the city into two worlds, Berlin was the focal point of global security for decades. Now, 20 years after the fall of the Berlin Wall, the end of the Cold War, and disappearing borders, this city and the rest of the world face new, broader security challenges.
THE NEW SECURITY CHALLENGES LINKED TO GLOBALIZATION
I am sure that everyone knows the new security threats that we face in this globalized world after the end of the Cold War. Proliferation, terrorism, climate change, poverty-driven migration, nation building, and so on have made the list of security threats seemingly endless and diverse. One of the most important changes, brought about by globalization, is that the distinction between defense and security is being more and more watered down.
This can be observed in several different areas. Let me briefly address three:
Political: Overlapping areas of defense and security are on the agendas of NATO, the EU, and national governments.
Abroad: Today, military operations abroad are no longer limited to military actions, but also include a civil component such as infrastructure development and police work. In particular, the conflict in Afghanistan clearly shows that a new approach is required: Implementing constant reforms to an operation and at the same time taking care of the humanitarian situation in the country are huge tasks.
Domestic: Due to the many dimensions of threats, homeland security agencies often need to closely cooperate with military forces.
As the example of Afghanistan demonstrates, defense and security cooperation is—more than ever—a matter of alliances and partnerships. As you know, 46 NATO and non-NATO countries with more than 100,000 troops are currently fighting in Afghanistan trying to stabilize the country. It was clear from the beginning that no country alone would have the resources to do it on its own. Financial pressures due to the global economic crisis are weighing on national defense budgets. But the necessity to respond to defense and security challenges has not decreased. Furthermore, the scope of threats and missions is continuously enlarging.
For me there is only one solution: We have to foster dialogue between industry, political, military, and security forces to find a way to overcome the new challenges.
EADS AND THE INDUSTRY
This year, EADS celebrates its 10th anniversary. The roots run deep into 40 years of European aerospace and defense programs. Through cooperation and integration we have developed into a leading global aerospace company with global customers. Just try to imagine: Where would European aerospace and defense be without EADS? There would be:
- No Eurofighter
- No A400M
- No NH90
- No A380
- No Ariane
In short, we are a part of Europe that works! But our achievements would have not been possible without a stable European environment, which a high-tech company like EADS needs in order to operate, especially here in Germany, where we have 29 sites and employ almost 46,000 people.
I know that EADS is not considered fully German in Germany. It is also not considered fully French in France or fully Spanish in Spain.
But our company is a strong German player. We work closely together with the German government to solve discrepancies like we did with the A400M. I am happy that we found a solution and that the program continues. We will also find a solution regarding the Tiger helicopter. Eurocopter is working to solve the wiring problem and the Bundeswehr handed over fixed helicopters for testing in July. These two state-of-the-art aircraft are a good sign of what Europe is capable of when it works together.
That is why it really worries me to see national tendencies on the rise when it comes to awarding contracts in each of our four domestic countries. The current homegrown competition, which is resulting in a fragmentation of force, weakens Europe and its ability to develop innovative systems to tackle the security challenges ahead. Remember that EADS was created 10 years ago to gather European forces in front of the consolidated American industry around the giant companies: Boeing, Lockheed Martin, Northrop Grumman, Raytheon.
The rest of the world is not sleeping. Think about China and Russia. Against the background of global competition it is of vital importance for Europe and the European industrial defense base to cooperate and bury unnecessary wars.
THE NEED FOR STATE AND GOVERNMENT CUSTOMERS
To establish Europe as a strong global player, the defense industry needs states and governments as customers. States and governments are essential to provide a reliable environment and necessary resources for innovation and R&D. For example:
During the last 10 years, EADS created about 15,000 new high-tech jobs in Europe—in a period when the industry was dramatically destroying jobs on our continent.
We invested €22bn in R&D to develop leading-edge products for the future.
If Europe is busy fighting unnecessary domestic wars, high-tech jobs and innovative products will leave Europe. But they are an important contributor to the European economy. So Europe needs strong defense and aerospace players like EADS to counterbalance strong competitors such as Boeing. And that means, as a counterpart, that we have specific responsibilities and duties toward our domestic nations as customers.
More generally, it is obvious that both the industry and the nations as customers are sitting in one boat. We have to establish a constructive dialogue about common basic problems. We have to establish a dialogue about the way to save money without jeopardizing the future of the defense industry.
Decisions take a long time to make and are very complicated. Overcustomization and overspecification for cooperative programs contribute significantly to time delays and cost overruns. The law of balanced work-share return (juste retour) is leading to industrial inefficiencies. Better performance in procurement and a faster decision-making process have to be implemented to turn the current situation into a win-win situation for both the industry and the nations as customers. We need this particularly in this period of time when defense budgets are under pressure and cooperative programs are the only solution to finance them.
Ladies and gentlemen, the industry is ready to adapt. We are ready to meet customer requirements and to develop systems to counter future threats. We are ready to recognize that countries want to save money on defense budgets. I really want to emphasize that we have to engage in constructive dialogue on how to improve the current unsatisfying situation. Once again, we are sitting in one boat!
For me, this workshop serves as a great forum to discuss such important security questions and challenges. Once again let me say that I am very honored that so many of you accepted the invitation. I wish you all fruitful workshop experiences with interesting insights and inspiring discussions.