Tag Archives: GAMI

February 6, 2024 · 00:51

At the start of round two

I have stated more than one that America has a problem, it has a few, yet this was about defence spending and others aren’t spending it on American soil. I have been called crazy, cranky and delusional (no idea where the cranky part came from). Anyway, today I see that Saudi Arabia has a MoU (Memorandum of Understanding) with Leonardo defence.

From one source I am getting “The Ministry of Investment (MISA) of the Kingdom of Saudi Arabia, the General Authority for Military Industries (GAMI) of the Kingdom and Leonardo announced yesterday the signing of a Memorandum of Understanding (MoU) with the intention to discuss, develop and evaluate a range of investment and collaboration opportunities in the defence and aerospace sector.” Some will say ‘so what?’ and until recently I would have agreed. I never heard of them, that doesn’t mean anything, but when you consider that the amount (unverified) is rumoured to be around a billion dollars, the case starts to give a different stage. China is taking a massive slice, Germany and the UK are on the pie hunting side and now Italy takes a billion too. This means that the pie that America one had, what is left is a lot smaller and a lot less impressive (for America that is).

So the pie that was overwhelmingly America (Raytheon, Northrop and a few others) is now set to at least four additional players and even as we do not know the slice of China, there has been a few indicators (unverified) that it amounts to billions. As I personally see it, this is the result of biting the hand that feeds you and I never saw any clear evidence of what happened to that columnist no one cares about. That is the larger station. In addition to this, one source gives us ‘Fifteen Spanish companies compete for a slice of Saudi Arabia’s military pie’. There is no way to see how far they get and the defence market that is going on right now has 700 arms manufacturers trying to get a slice of $71,000,000,000. It is anyones guess how much is left after China gets its slice. All indicators give me that they are succeeding, in least in part, in securing that revenue and that is revenue that is lost to America. I feel certain that players like Raytheon will get a slice, but as far as I can tell it is rumoured to be the smallest slice they have gotten in a decade.

And a lot of this could have been prevented, but feel free to think that my delusion.

I wonder what news we will see next week when the trade fair is over. Yet I feel that a few European firms will be happy on what they were able to achieve. The largest setting That I expect at some point is that FN Herstal and/or the Herstal Group will place facilities in Saudi Arabia to see the setting that Saudi Arabia has advocated for close to 3 years to have 50% to be produced nationally. I reckon that FN Herstal/Herstal Group might reconsider that setting and move some of that to Saudi Arabia, not only for the slice of pie, but as part of Brics their dance-book will open up to several players. There is no data showing this to happen, it is pure speculation but that move makes sense to me. You see if FN Herstal doesn’t China and their AVIC, CASC, CETC, CASIC, CSSC, CSGC could get a lot more revenue. Norinco is unlikely to make that cut as it has been a really bad boy, but that could be my personal view on the matter.

Enjoy the day.

What did I say?

I have said it again and again. The US is in several dangers, financial being a large one and Al Jazeera gives us ‘UAE arms deals: What weapons is the Gulf state buying and why?’ (at https://aje.io/pn5gad), it is the second line that should concern people. The mention of “purchases from South Korea, Israel and France”, Israel makes sense, its Iron Dome is pretty essential in any defence setting, yet the US is not one of the mentioned, so no Northrop Grumman or Raytheon. It is South Korea and France. France needs the sales, but in the end, the US is overlooked (again). There is a setting that the US could still set itself on and that is to grow UAE defence growing, Manufacturing plants in the UAE (or Saudi Arabia), but there is no real information on where the GAMI is going at present, so when we see “has one of the most potent air defence systems in the region, relying mainly on American-made weapons like the older HAWK missile, the more capable Patriot PAC-3 missile and the THAAD air defence system which was used for the first time in combat this year, destroying a Houthi missile” we also see that out with the old and the new is increasingly likely not going to be American, so when one changes, where does that leave the sales pipeline of the US? When one falls over, where do the others go? Consider that the HAWK was not the latest solution when I left the army 20 years ago, so why are the American salespeople not all over that wreck from day one? It should have been a clear path for the US to cement a better stage with Saudi Arabia, the UAE, Bahrain and optionally Qatar. If they can keep one of these four it is close to a miracle. And at the edge is China, ready to sell whatever they can and when I initially stated that the US could lose hundreds of billions everyone was stating that I was nuts, that I was demented and I didn’t know what I was talking about. Over the last months we have seen activities that show that the US is in a sliding place and now Al Jazeera adds to that. People might laugh at the size of the UAE, but with the UAE the options for Saudi Arabia, Bahrain and Egypt will also grow and neglecting any options is folly and it could cost the American industry a lot more than anyone bargained for. It might be merely my view, but so far I have been spot on, something the others will yet have to prove.

Oh darn, I am missing out

Now to be honest, there was never much of a chance to begin with, but who would not want 3.75% commission, especially as it is based on a number amounting to billions. And as I said in several articles, the US is about to lose out on these billions. And guess what, after all the name calling I was handed (some are blindly accepting US stories that it will blow over), the setting given to us by Asia Times is ‘Saudi Arabia has a plan to buy fewer US weapons’, a mere 5 hours ago. It is supported by “Kingdom has launched an inward-looking strategy to develop its own defence industries with the help of foreign partners” (at https://asiatimes.com/2022/02/saudi-arabia-has-a-plan-to-buy-fewer-us-weapons/) in all honesty, this was always going to happen, but that industrial move was initially going to be US settings, now there is every chance that China gets to do this and that would imply losses into the hundreds of billions. The article gives us “Saudi Arabia has signed several Memoranda of Understanding between GAMI, the Ministry of Investment and UK-based Cranfield University. GAMI also signed a Memorandum of Understanding with Italian defence manufacturer Leonardo to create and develop investment opportunities in education and train specialised military industries”, yet I believe that this setting is one that China relishes, as such whatever the west is thinking, be careful what you do next. You se, Cranfield themselves give us “A number of Cranfield graduates also hold leading roles in Aero Engine Corporation of China (AECC) including the Head and the Chief Design Engineer of the China Gas Turbine division”, Is this where it will go? No, there is no data supporting this, it is based on the stages that we have seen all over the news and if Saudi Arabia decides to get their hardware from the BAE, I would be happy (as a Commonwealthian), I would still be a little sour missing out on the 3.75%, but that was never a given in the first place. And all this is not really news, the internal defence growth was at least 2 years old and it makes sense for Saudi Arabia to have its own military manufacturing complex. So we aren’t seeing anything news, other than the Italian involvement here. So whilst some will stare at “Cranfield is ranked 45th in the world for Aero, Mech, Manufacturing by QS rankings.” It seems to me that Saudi Arabia is making headway in this stage and that means that the US is in deeper trouble than it realises. The UK could avoid some issues if they can get a handles on the CAAT Tea grannies.

You see, over the next decade all nations need whatever revenue they can get and the UK is not out of the race yet, the question becomes what can they offer over China and that is a hard nut to crack, China has all kinds of advantages after the UK and US dropped the ball, and they did so several times in a row, so they are catering to a client (the Kingdom of Saudi Arabia) that has had enough of the games that some governments have been playing (as well as catering to Iran at the same time).

Saudi Arabia was always intent on growing its own defence solutions and I believe about 3-4 years ago mention of 50% by 2030 was stated and they are on track to do that. I believe that GAMI (General Authority for Military Industries) is roaring to get things going. And it seems that they are very serious to get it going, so it is up to the UK to find solutions that help them and not China. Personally I believe that the UK will have to sweeten the deal by a lot, but that is personal speculation. I do still believe that China has the inside track here, but that too is speculation on other sources, sources I never was able to vet.

And there is a second path here, I do believe that the longer term planning for Saudi Arabia implies that Egypt is a growing connection here, so if China wins that path, they could optionally have the advantage with Egypt and its $2,000,000,000 for 2022/2023. A setting that should cause concern in Washington. You see, if China takes over the $ 1.3 billion annually support from the US, the factional setting for the Middle East will change pretty dramatically. Even as the US is seemingly out with the Saudi Government, it is merely that seemingly. The US has a massive disadvantage especially when they were all huffy and puffy on Saudi Arabia, reality bites and that presentable stage will have to be stopped at the earliest convenience (not for me, I am happy if the BAE takes over), yet these stages (also the one the CAAT forced) are all stages that the Kingdom of Saudi Arabia took notice of and China will be happy to show that with every presentation they bring. So China might have the lead, but the UK is still in the race and that is good for the UK. The Asia Times is not bringing too much news, yet the fact that it is on the front of the media is always an optional sign that more will be coming soon enough.

Time will tell, and I reckon it is sooner rather than later.

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Filed under Finance, Military, Politics, Science

Tagged as Asia Times, BAE, CAAT, China, Cranfield, GAMI, General Authority for Military Industries, Iran, Italy, Leonardo, Saudi Arabia, UK, US

February 21, 2021 · 00:38

How to miss out on $20,000,000,000

Yup, another notch, another confirmation and in all this, I smirk. The shown stupidity by several players whilst they try to be clever and show the people through ‘filtered content’ that they are on the ball was staggering. Now Reuters gives us (at https://www.reuters.com/article/us-emirates-defense-saudi/saudi-arabia-to-invest-more-than-20-billion-in-its-military-industry-over-next-decade-idUSKBN2AK08K) ‘Saudi Arabia to invest more than $20 billion in its military industry over next decade’, the US and the EU have played their cards and are out of the race, implying that the bulk of all this will go to China, and optionally Russia will get a few slices of that cake. Some called me a fool, some said I was dreaming (well, I was to some degree), but with the Chinese economy getting a nice large slice of the $20,000,000,000 the stage is starting to change. The UK is missing out because they gave the stage to stupid people (CAAT). The US did a similar thing, the EU climbed on their high horse called morality blaming the KSA for all kinds of things, yet they refused to give the people the real deal which involved Iran. Now China has a larger stage and they did it to themselves.

The Governor of the General Authority for Military Industries (GAMI) Ahmed bin Abdulaziz Al-Ohali will have to select a new stage, one that does not include the EU or the US. China who was basically not in the market with their QBZ-95, they now have a realistic chance because both Belgium (FN-Herstal) and Germany (Heckler and Koch) can not contribute. In addition China has a few other options, add to that a larger stage where they can offer airplanes and vehicles the stage is set, the west lost out on twenty billion, all due to stupidity, and they did not have that much to tinker to begin with and it only goes downhill from there.

If China sets the manufacturing stage to Saudi Arabia the stage changes even further as they will have a leg up in several Middle Eastern nations. So, if the Campaign Against Arms Trade (CAAT) gets a nice hamper this Christmas with a note stating ‘千恩萬謝’, you know that their goose is cooked.

So what’s next? Well, as the KSA is making increasing purchases into their defence apparatus, the stage changes, it is a cost we all see, but in the past the EU and the US made hay out of the benefits they got, that part is seemingly going to China (optionally Russia too).

A stage that I saw almost 2 years ago, is it not funny how the politicians in the US and EU did not see that coming? If they did, why was their no mention in the news? Yet it is clear that their economies are so good, they can afford to sneer at 1 to two dozen billions. Ohh, I forgot they are broke! And this is not about the CAAT, I get it, there is ideology in ‘to end all government political and financial support for arms exports’, this is nice but it only works if all players adhere to this and a nation has every right to defend itself, as such Saudi Arabia needs to do what is best for Saudi Arabia. If that requires them to start talks with China, then so mote it be.

Realism is fickle, it is shaped by the people wielding it, even if their realism is tainted by ideology and delusion. As such that fickle statue is now going to other places and the nations with trillions of debt will need to find another solution, but perhaps selling stickers to the members of CAAT will make up for something.

I myself would have preferred to offer the Typhoon to Saudi Arabia, but in this
I hope to sell them the Chengdu J-20, yes I might be asleep, but do we not all want a 3.75% commission out of a $2,000,000,000 deal? In all this the stage was clear for close to 2 years, I wonder what the people had to win by losing out on billions, I honestly have no clue, do you?

Change is coming

Well, actually change is always coming, some in the form we know, some innovative new and sometimes change is of a very different variety. We already knew that the Americans weren’t too bright when it comes to trade wars, and the one that is getting fuelled here is definitely a wrong one. Yet it is not about that trade war and it is not in the billions of impact that the war will have on consumers. There is a second war brewing. One that Europe and America were not ready for, one they did not prepare for. It is a new armistice race, they were not prepared because it is not the high technology they usually deal with, it came from the lower regions. Yet let that not underestimate the stage. Two players in that stage are Fabrique Nationale Herstal, established in 1889. Less than a 60 years later They would produce the FN FAL, a rifle used in over 90 countries, in that same year the final push was made for the FN MAG, use in over 80 countries. These weapons are even today lethal and can go up against the most modern side arms. One factory created two behemoth successes, merely two of dozens of weapons that are regarded as a top quality arms. Yet, it is not about FN Herstal. It is neither about the long term number one Heckler and Koch was founded after WW2 and soon became a success story in several fields surpassing FN Herstal, yet these two are not facing a new competitor. Both FN and HK face a rather troublesome future. You see, they are stopped by all these political Human rights laws and whilst we get the need for Human Rights, the people in there seem to have a view so altruistic that it also kills commerce.

Number three is delighted, SAMI, or in its full name the Saudi Arabian Military Industries, is about to equal and surpass in less than half the time that the previous two required to get established. All the data on patents, technology and deals with Boeing, Lockheed Martin, Raytheon and General Dynamics, as well as partnerships with Thales and CMI Defence opens new doors, doors the other two were barred from. SAMI is now in a position to surpass both and become bigger then the two earlier mentioned combined. In 2017 SAMI got Andreas Schwer (former boss of Rheinmetall AG) and the man has not been sitting still. At the same steps we see Neom growing, we see the mandate of SAMI to create 40,000 jobs by 2030 and it seems that SAMI is ahead of that curve too. With all the issues playing in Asia, Africa and Latin America SAMI has created the stage where they can outbid and surpass all expectations from the buying companies. It goes beyond the assembly of 150 Lockheed Martin Blackhawk helicopters. With the partnership with Navantia less than a year ago, we see the additional growth sectors in Latin America pop up, yes, it is all new, it is all change, but not the change you would hope for. We might see shunning of arms in America, but it remains a large export business, one that is now getting pushed to the side by the Saudi Arabian Military Industry, and it is not stopping. As the links with Navantia matures, we see the option to cater to the needs of coast guards on several national levels and these are not the small players. Some might have noticed the small mention of ‘Offshore Patrol Vessels Market 2024: New Business Opportunities for Manufactures to Upsurge in Coming Years‘, yet Navantia and therefor SAMI are in the thick of that part of the equation, growing faster than anyone took notice of. We might look towards the Dutch Damen, Australian Austal and Turkish Dearsan, yet they all have the same flaw ‘each player can deliver few numbers of OPV‘, Neom city changes that premise as it has a massive chunk of red sea at their disposal, basically SAMI has the option of building space well over 5 times the combined spaces that Damen, Spanish Navantia and Dearsan combined have. It changes the equation a fair bit. It sets a different market premise; it took slow growth of 130 years for FN Herstal to get where they are now. It takes SAMI 12-15 years to get that same stage, more important it seems that tall the contracts and memorandums out there gives SAMI a much larger option to grow and more important a lot more industry to bring home through export, another promise made by Crown Prince Mohammad Bin Salman Al Saud delivered in advance of the date he wanted it to be. CEO’s and goal driven executives all set in a stage to exceed expectations. It might be fuelled by oil, but more important it is fuelled to success whilst the EU is making more and more issues on exporting all kinds of goods and the US – China trade wars are not helping. In addition the news quotes like “Europe must develop a much stronger common approach to the new 5G technology to make itself less vulnerable to security risks“, which sounds nice, but I already saw two elements they overlooked and my IP pushed a solution, a solution they are not ready for and seemingly Google is less and less ready for making Huawei the only remaining player and Saudi Arabia has a lovely deal in place. You see, that premise of 5G with ‘to make itself less vulnerable to security risks‘ requires 5G to be firmly in place and whilst we see delay after delay Saudi Arabia keeps pushing communication and other solutions forward implying that they are setting a much larger stage creating new technologies for other regions and in that the other players forgot one interesting side effect. Any stage of armistice and war requires communications to be upgraded and Saudi Arabia can deliver that too. It is there where we see a larger change and a larger group of options for Saudi Arabia. Walid Abukhaled, CEO of global defense and aerospace corporation Northrop Grumman has created a stage that is approaching a global one all from the comfort of Riyadh, Saudi Arabia and whilst the rest is bickering over scraps of food form the European table we see an entire industry growing silently day by day to almost exponential proportions. An interesting part that can be verified on several levels and the news and the European media remain oblivious to that part.

The Arab News states that he ‘aims to export weapons‘, I believe that SAMI has progressed a lot further, as I see it they are almost ready to implement defense solutions on a global scale, and this includes defense systems to several nations that Europe refuses to talk to for whatever reason. This goes beyond what we see in the Arab News (at https://www.arabnews.com/node/1547956), it goes beyond ‘electronic warfare and cybersecurity‘; it goes beyond the mere operational stage, beyond the educational and implementation stage. Together with General Authority for Military Industries (GAMI) they have created a new wave on a much larger scale than we have seen before.

Good business is where you find it and it seems that Walid Abukhaled is currently finding it everywhere.

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Tagged as 5G, Andreas Schwer, Arab News, Austal, Boeing, CMI Defence, Cybersecurity, Damen, Dearsan, electronic warfare, Fabrique National Herstal, FN, GAMI, General Dynamics, google, Heckler & Koch, HK, Huawei, Lockheed Martin, Mohammad Bin Salman Al Saud, Navantia, Northrop-Grumman, Raytheon, Rheinmetall AG, SAMI, Saudi Arabia, Saudi Arabian Military Industries, Thales, Walid Abukhaled