360-Degree Point of View

Strength Through Partnership

December 9, 2014

Remarks by Martin J. Coyne
Director AMD Business Development, Lockheed Martin Missiles and Fire Control

The Berlin Security Conference
Berlin, Germany
December 2, 2014 

Good afternoon.

On behalf of the Lockheed Martin Corporation, it is our pleasure to be part of this year’s Berlin Security Conference. Today represents our first participation in this conference and we are delighted to participate with our European friends.

Lockheed Martin has been a vital contributor to technology advancement and global security for more than 100 years. Let me begin by sharing some of our technical heritage for those of you who might not know us very well.

A Diversified Global Security Enterprise

Lockheed Martin is a global security and aerospace company. We are focused on advanced technology systems, products, and services. With sales of $45 billion annually, Lockheed Martin is one of the largest corporations in the United States. We’re a global enterprise. We have 113,000 employees with operations in over 70 countries. Our principal objective is helping our government customers find solutions to their most pressing security challenges.

Perhaps this is best shown in our world-class aircraft. We developed and produce the F-35 Lightning II, the F-22 Raptor, as well as the F-16 and the C-130J. You may also know us for the Littoral Combat Ship. But Lockheed Martin is more than these examples.

We’re a leader in missile defense. In fact, our engineers invented the technology known as “hit to kill.” Our systems include the PAC-3 missile, THAAD, and Aegis BMD and we operate across all phases of missile defense, from the ascent phase through the midcourse and terminal phases.

Lockheed Martin is also a top provider of information technology to governments around the world. Our air traffic management systems handle 60 percent of the world’s air traffic. Our information technology portfolio includes systems for biometrics, command and control, cyber security, and healthcare. We’re also a leader in satellites and space exploration – from GPS to communications to climate monitoring.

In short, our people develop innovative solutions to complex problems.

But we are at our best – our most effective – when we work in partnership.

Partnerships are at the very foundation of our success. We’re proud to have more than 1,000 partnerships with suppliers, with businesses, and with universities all around the world, including hundreds here in Europe. National partners are vital to our success. They understand the market and national needs, and contribute unique capabilities and expertise. With their help, we are able to offer international government customers complete solutions that are the best of what Lockheed Martin and our partners have to offer.

Proof of Partnership – MEADS Success

Let me spend a few minutes talking about one of our most valued and enduring relationship in Europe – our longstanding partnership with MBDA in Germany and Italy. For more than a decade, we have worked together to develop a next-generation ground-mobile Air and Missile Defense system. It is managed by a NATO agency and satisfies requirements set out by Germany, Italy, and the United States. I’m talking about the Medium Extended Air Defense System, also called MEADS.

Because each nation recognized it would be difficult to do this alone, these three strong NATO countries entered into a strategic partnership based on burden sharing and enhanced interoperability. They agreed to share the development costs, with Germany and Italy providing nearly half of the total cost, thus allowing all three nations to provide a next generation air and missile defense system to meet their individual needs.  They also agreed to develop a common set of military requirements, which far exceeded those of any previous air and missile defense system, and ensured that MEADS capabilities would remain ahead of the threat for years to come. The arrangement was formalized in an historic agreement in 2004, the MEADS Memorandum of Understanding (MOU), which still serves the nations today.

Industry followed the lead of our governments and developed a strategic partnership of our own:

  • a partnership based on cooperation through which we agreed to co-develop the new system as equal partners with equal say
  • an industrial model in which all had meaningful workshare and 100% access to all the technology
  • a commitment to equally share the risks across the program to ensure its success.

We formalized this arrangement with our own industrial agreement, which has guided our co-development effort to date.

Partnering has been the foundation of the MEADS program.  It has been the essential element that has enabled us to develop a complex system that meets the robust military requirements that I mentioned previously.

Our government customers insisted that we develop a capability that would defeat current and future threats approaching from all directions and do so simultaneously. Why? Because they knew that the enemy of the future would not simply launch ballistic missiles down the protected corridors of our current sectored systems, but that they would combine those attacks with maneuvering cruise missiles and other air-breathing threats to assault our blind spots and vulnerabilities.

The authors of the MEADS requirements also demanded that this capability be highly mobile to react to changing battlefield conditions.   They also insisted that it be easily transported so it could quickly provide defense for expeditionary operations. As a result, the MEADS system is so deployable that, using just two C-17 aircraft, a 360-degree, networked air and missile defense minimum engagement capability can be deployed anywhere in the world in 48 hours.

They required us to develop a system with an open architecture based on non-proprietary software, and a plug-and-fight network that would allow nations such as Germany to tailor the system for their individual needs. Finally, they wanted MEADS to do all of these things BUT cost half of what it costs to operate and maintain systems currently in the field.

… and that is exactly what we collectively designed, developed, and built.
The product of our MEADS partnership has been proven in three missile tests at White Sands Missile Range, two of which were the first ever in the world.

On 13 November 2013 MEADS simultaneously engaged and destroyed a ballistic missile attacking high from the north and a low-flying cruise missile-like target approaching from the south. The system performed exactly as designed and validated the collaborative work done by German, Italian, and American industrial engineers.

Probably the best complement heard that day was from a senior US government official who said “you know, you couldn’t tell who was from where until you heard their accents.”

Was getting to this point easy? No way! But it does prove what can be accomplished when we look past the limits of national and company visions to achieve the full promise of world-class engineering.

The US could not have done this alone, nor could Lockheed Martin have accomplished this independently. The MEADS success resulted from a dedicated, determined, collaborative effort of the three sponsoring governments and their respective industrial teams.

Let me tell you about the vital role German industry have played in the MEADS program. MBDA Germany has been significantly involved in the development and integration of the Battle Management software. It has played a significant role in development and integration of the Multifunction Fire Control Radar, including work with Airbus to incorporate highly advanced radar modules. The lightweight 360-degree MEADS launcher was also developed, assembled, and tested by a product team at MBDA Germany.

A state of the art MEADS System Integration Laboratory is installed on-site at Schrobenhausen. This capability, in conjunction with the link to the Freinhausen test centre, will provide MBDA Germany with additional systems competencies in the field of air and missile defense. In short, MBDA-GE has been directly responsible for the numerous MEADS achievements, to date.

For our part, Lockheed Martin remains 100% committed to fielding the MEADS capability and looks forward to continuing to work closely with our German and Italian partners to meet this objective.

Ladies and gentlemen, we have a collective sense of pride in what we have been able to accomplish together. And for those of you who can, especially the many Germans in the audience, I hope you will have the opportunity to visit the MBDA facility in Schrobenhausen and see the MEADS equipment for yourself. I hope you can talk with the young German engineers who now represent the technology leadership for a new generation of air and missile defenses. I’m sure you will share in their sense of pride in the MEADS launcher, radars, and battle management system, and in the leading role German engineers are playing today.

Lessons from the MEADS Partnership – Key Tenets of Success
Partnership made the MEADS program possible, with the promise of bigger results from smaller national investments. So why has this transatlantic partnership endured when so many other project attempts have failed over the years? Let me share a few thoughts…

First, Lockheed Martin and MBDA took cooperative development very seriously.
We believe our original proposal was chosen because we proposed a more integrated leadership organization, tri-national product development teams at each work location, and unanimous decision-making within our board of directors. We said from the beginning that we would engage fully in partnership for the success of the MEADS program.

We laid out an Industrial Cooperation Agreement that said we would each apply our resources if a partner company needed help. We agreed on a tri-national Executive Management team to manage the program, and defined the business and technical positions that ensured each company had representation and visibility into work processes and products at each worksite. From the beginning, our product teams in Dallas, Orlando, Huntsville, Syracuse, Munich, and Rome spoke three languages, but had one purpose.

Our work tools reflected this philosophy and we implemented tri-national email and data networks for the MEADS program, including the first multi-national industrial classified network. This ensured all members of the MEADS program team could share information, collaborate on design development, and reflect full participation to their national customers.

Second, MBDA and Lockheed Martin embraced the significant technical challenges associated with MEADS

This does not mean that some programs are less interesting or unimportant. But what brought our nations and our companies together was a clear need for a better air and missile defense system. Our companies, and our people, have never lost sight of the honor and opportunity to have been chosen to develop MEADS. We sought out and assigned our best talent to this effort.

Our team would be the first to develop a ground-mobile system to destroy ballistic missiles, cruise missiles, and air-breathing threats that didn’t exist yet. It would invent mobile 360-degree surveillance and fire control radars that were more reliable, capable of tactical airlift, and could provide continuous coverage for maneuver forces. It would introduce a plug-and-fight battle management network architecture with system-of-system integration capabilities.

To the credit of the nations, the requirements for MEADS remained stable. Change and new thinking have brought the end to many programs. But because of the effort to base MEADS on an agreed common set of requirements and the desire for burden sharing, both reflected in strong government Memorandum of Understanding agreements, the program went forward on firm footing.

Third, MBDA and Lockheed Martin were determined to deliver on our commitments.
We live in challenging times. And for those companies, like ours who invent technology within budget constraints, the challenges are significant. The pressure on cost and schedule performance leaves little margin for error…failure is not an option. The MEADS program team – thousands of men and women over the years – met its commitments by working collaboratively to leverage the best talent and ideas from each company and by working together to solve the numerous challenges posed by a new system development.

MEADS development has not always gone perfectly, but over the past five years, the MEADS program has made every milestone date on-time and within cost. That includes three successful flight tests demonstrating new capabilities and first ever events.

In the 2004 Memorandum of Understanding by the Germany, Italy, and the United States, a $3.4B financial cap was set on the contract cost of the MEADS program.  Despite what some of you may have read or heard, our contract period will be completed on cost. We will spend not one euro or dollar more than the three nations agreed to in 2004.

The Need for Missile Defense in Europe

So where are we today?

There has never been a greater need for air and missile defense in Europe. Longstanding concerns about cruise missile and tactical ballistic missile development in Iran have suddenly paled as NATO finds itself less than ready to address unclear Russian intentions in the Ukraine and elsewhere. The Islamic State and war in Syria have forced us to question the effectiveness of government control over weapons of mass destruction.

For its part, Germany continues to take a lead role as it adopts and defines the role of a framework nation in NATO. As a regional leader, Germany anchors a group of regional allies that are focused on specific capabilities including air and missile defense. This important commitment is timed to benefit from Germany’s continued development of the Taktisches Luftverteidigungssystem (TLVS), which will soon become the most advanced air and missile defense system in the world.

Through the TLVS program, Germany has the opportunity to carry advanced technology forward and build on the proven developments of the MEADS program, which include rapid deployment, network flexibility, and 360-degree protection. They also have the chance to provide partnership opportunities to other NATO allies who are also contemplating investments in advanced air and missile defense capabilities.

We are proud of the role we have played to usher in a new era of cooperation and co-development and our strong multi-national industrial team stands ready to progress forward.

Thank you very much for the opportunity to speak to you today, and I hope each of you benefit from the conference in the days ahead. If you have the opportunity, we would be honored to have you visit our booth in the exhibits area and talk more with our experts about MEADS.

What Others are Saying

MEADS On The Most Important Battlefield – Germany

December 4, 2014

Germany have not decided yet about the direction for modernization of their air defense, a program called TLVS or Tactical Air Defense System (Ger: Taktisches LuftVerteidigunsSystem). In practical terms, there are only two options under consideration at the moment. The obstacle for the decision was a review of all modernization programs conducted on behalf of the Bundeswehr. This shift results in extra time for debate between columnists and experts – the MEADS or Raytheon? The German decision is anticipated, as it may create a domino effect in the European air defense. Other capitals will, almost certainly, follow Berlin. It is less likely though, that one of them will be Warsaw. The Polish MoD gave up on reviewing the MEADS offer for the Wisła program already in June and today does not express any interest in it. An unassisted change of that decision seems difficult for a number of reasons, mainly political and those of image. But we’re walking a separate way and without the “bias of Wisła” we would like to watch this international project. It is now difficult to tell what MEADS future will be. Itself, it does not want to be shelved as an “advanced-historical” military program. Our interviewee Marty Coyne, director for business development at MEADS International tells something more – they’re far more optimistic about the program’s future than a few months earlier.


Germany first

It is not a secret that the Medium Extended Air Defense System or MEADS enjoys a guaranteed funding only until the end of 2014. But its problem is not an early development phase or even more so not meeting the tactical-technical requirements. Having spent almost 4 bln U.S. dollars and conducting 90% of the work, the question for whom will the investment be realized, remains still open. The first and optimal client, from the timeframe point of view, seemed to be Poland and the Wisła program. At the end of June, after two technical dialogues, the public opinion has been told that the MEADS does not meet the key criteria, defined as being operational in NATO countries and offering technology cooperation. The path towards the Wisła was closed for the American-German-Italian consortium. Lockheed Martin and MBDA (German and Italian division), as creators of the MEADS International consortium partners, hope that the future decision by Germany to utilize the MEADS system components as a basis for the TLVS system will allow to continue the program after 2014.

Germany was planning to take decision about the future of the air defense, effectively about the Patriots, as early as in Fall this year. But the change on the post of federal defense minister, Thomas de Maiziere had to make room for Ursula von der Leyen, and above all the criticism of the raising costs and the produced effectiveness of the Bundeswehr’s modernization programs, have put the decision on hold. An audit by the KPMG, announced in October, wasn’t very critical as far as the MEADS was concerned, it recommended though another analysis of the program before a decision is made. On the other hand a political pressure has risen in the recent months to speed up the steps concerning the TLVS, and members of the Parliament from the defense committee have issued a resolution to make it this year. This seems unlikely, but according to Marty Coyne of the MEADS International, it is possible in the first quarter of 2015, maybe as early as February. Politicians have begun actions for utilizing the achievements of the MEADS program. Both members of the Parliament, and the Bavarian prime minister of the ruling CSU party. Germany have spent on the MEADS program almost 1.2 bln EUR already, but for the politicians it is primarily a fight for the future influence on the budget and specialized workforce, much less about federal expenditures. The MBDA Germany Ltd. headquarters is located in the Bavarian Schrobenhausen. In the recent years, in the facility that hires 1100 people, including 250 engineers, 60 mln EUR was invested in new infrastructure, including a simulation center for air defense systems. Nobody today would like to dispose that lightly.

Once the KPMG report was published, the military experts have effectively begun very detailed talks with MEADS. According to the consortium, it’s convenient to them. They have an opportunity to present the material results of their efforts that went on for many years. It has become greatly important that one side of the project is the German industry and that specific technical data are in Germany. The KPMG has envisioned five different solutions to be considered in regard to the TLVS – 3 of them concerned the MEADS, 2 did the Raytheon. Currently, no hybrid solution is being considered, only two options are left: the MEADS or the Patriot Next Generation.

The current situation has brought a lot of optimism for MEADS. There is a timeframe and there is the system that emerged after billions-worth of investments. The competitor has yet to face that financial and research effort. The MEADS has been rooted on the local market, as it is equally a German, as well as American or Italian system. What is also important is the ambition by Berlin to become a NATO framework country in the field of missile defense. This requires a different approach. The system should be state-of-the-art, modular and not an upgrade to a 40-year old design. In the long term, a new system, developed from the scratch, would be more beneficial for Germany.

The German decision will create a domino-effect. According to MEADS, a selection favorable for them, will result in the first place in taking the decision by Italy – a consortium partner with 17% share, who due to financial reasons can not take the decision single-handedly and implement the MEADS on their own. The system will be then introduced operationally in the NATO armies. Due to the military and economical links between Germany and the Netherlands, almost certain seems selection of the MEADS as replacement for the equally aged Dutch Patriots. Romania is other interesting case pointed out by Marty Coyne. Because of the modular design concept of the Lockheed Martin/MBDA system and more tight financial capacity, Romanians are interested in a phased air defense modernization. Command and control to start with, then the radars and finally the intercepting units.

Selection of the MEADS as the future German air defense system, should be finalized formally by signing a contract after roughly a year. As Coyne said, each decision will be a decision. It would heal the situation concerning funding of the program by its partners.

An American MEADS?

In the coming weeks the Americans will start their path to develop the tactical air defense. The Pentagon continues to develop the air defense system based on a new, integrated, network-centric battle management system (IBCS). The question remains however, which launchers and sensors will be plugged into the network. The answer should be delivered by the so called alternatives analysis, scheduled for a year, that resembles the Polish technical dialogue. Both the MEADS, Raytheon and completely different offers will be examined. It’s a first step to indicate the direction, toward which the tactical air defense of the United States will strive. Needless to say that the MEADS remains very optimistic and has great expectations about the analysis – the developed system is designed from the start to be easily plugged in and seamlessly integrated (plug and fight).

All we want is a level field

A few months ago, when the MEADS was participating in the Wisła system procedure, the three defense attachés from the United States, Germany and Italy have submitted the Polish MoD with an intergovernmental agreement between three partners (MEADS is not strictly a business venture, but an inter-government one) regarding the approval for including Poland to the partners group on equal rights – against all other partners. Equal, because the same intellectual property rights, regardless of the level of shares, are owned by Germany (hence the idea for a hybrid MEADS-Patriot system), the U.S. and Italy. Hence also the strong position of the MEADS in Germany and Italy – they have acquired advanced technologies and have a great chance to implement them to the production stage.

Since the decision by the Polish MoD to continue the essential negotiations only with Raytheon and the MBDA, our military have lost their interest in the MEADS. They were not present during the July tests of the system in – not so distant – Italy. The consortium itself does not press for that very strongly, it is suggesting however to rethink the criteria that were used to exclude their offer from the tender. Marty Coyne is adding that the MEADS’s offer stands still open for Poland. If only our country would uphold the requirement to deliver 6 air defense batteries in the final configuration by 2022, the MEADS could deliver them on time, in contrast to the information published by the MoD on the recent competitors. The first battery – around 4 years from signing the contract. During our interview, we were also interested in the cost issues. Although the MoD hasn’t officially raised that question, the cost could be assessed for a half of the total air defense modernization program. In case of the Wisła, we’re talking about roughly 13 bln PLN (4 bln U.S. dollars). Taking into account the common undervaluation of ambitious military programs – which refers to many defense ministries – Marty Coyne thinks that an-approximate figure is relevant in regard to the whole program of 8 batteries. And such figure was declared by the MEADS.

The whole MEADS International offer was based on three pillars. A leading notion was to draw conclusions from the F-16 offset experience, develop partnership – not a supplier-client – relations, that was the first pillar. Another one is placing in Poland 40% of all work in research and production of the batteries. After assessment of the Polish capabilities and the timeframe, that level was indicated as rational. There’s nothing against that being higher, but there are certain consequences to that, for instance a longer implementation period for the program. An interesting element of the industrial cooperation was development in MESKO a simplified version of the PAC-3 MSE, the PAC-3 CRI and the Poland-only manufactured MCM missile (Medium Range Air Defense Complement Missile). 70% of the missile was to be built in Poland and the U.S. authorities approved the technology transfer of such an advanced technologies as the warhead’s seeker. What was to distinguish the combination of two missiles in one fire unit (an advanced missile against ballistic threats and simpler, cheaper one against classic air threats), which is advocated by many, was the range. That missile could make the majority of a few hundred planned for purchase by Poland for the Wisła systems. The third pillar is introducing the Polish companies to a large global enterprise, that creates export opportunities greater than Poland alone. The plans to acquire systems of capabilities similar to those of the MEADS are today being outlined by 15-20 countries worldwide.

MEADS has thought their offer had met with a positive reception by the Polish side. There was nothing that indicated they were to be excluded after the technical dialogue. Curiously, director Marty Coyne doesn’t think that the Polish requirement regarding a high share in the program for the local industry results in increased expenditures. Especially over a long period. It is true that today there’s a need for investment to enhance the capabilities of the Polish defense industry, but in Poland there are lower production and labor costs, you can make savings on transport and the maintenance system that is created, will stay. This will be balanced out in the end.

The eventual decision by Germany, that hasn’t been made yet, will allow to meet the criteria of operability in NATO armies, that are important to many. That decision will with no doubt have impact on the issues debated by the governments of Poland and Germany. All that MEADS would like is to let them fight the others on a level field. Taking into consideration the fact that the MoD since the end of June hasn’t sent any formal invitations to Raytheon nor Thales/MBDA for participation in negotiations about the Wisła program, as well as the unknown effects of the German decision and the complicating political situation in Poland – there’s nothing to rule out, in our editor’s view. But for the MEADS, most important for the next months, remain Germany. (Mariusz Cielma, Dziennik Zbrojny)


© 2014, MEADS International, Inc.