BAE’s US arm to shift Howitzer assembly here

[sancho]

Not true, last time all 145 guns would have been built in India, not ToT was part of the deal as it was a FMS deal. This is something very different and India should take it.

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The renewed offer to shift the assembly line to India involves Transfer of Technology to a chosen local partner, Kelly said. All local players, including the Ordnance Factory Board (OFB), could be considered. The technological challenge involves the use of Titanium. The FMS proposal does not envisage a joint venture, he said. Significantly, the gun barrel of the American gun cannot be made in India. This is barred by the Berry Amendment, a Congressional Act in the US.

The question is, how useful is the ToT that is offered! They fulfilled the ToT ammount in MMRCA too, but failed to offer us critical ToT, since that is restricted to US laws.

 

[Bang Galore]

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The question is, how useful is the ToT that is offered! They fulfilled the ToT ammount in MMRCA too, but failed to offer us critical ToT, since that is restricted to US laws.

Doesn't matter. No ToT requirement existed in the proposed earlier deal, doing it in India might well be a boost for Bharat forge since they are the most likely beneficiary of any outsourcing. In any case, I would much rather have the factory here than in the U.S.

 

[sancho]

Doesn't matter. No ToT requirement existed in the proposed earlier deal, doing it in India might well be a boost for Bharat forge since they are the most likely beneficiary of any outsourcing. In any case, I would much rather have the factory here than in the U.S.

It does matter to understand what we actually get and how this offer must be seen. Personally, I would have prefered a fast FMS route with full production outside of India too. We need these guns now, not somewhere in future, when all contracts are fixed, the production in India is set up and we absorbed whatever ToT we get. It's better to have them now and let Bharat Forge develop a fully indigenous system that can be added later, than wasting more time for political agendas.

 

[Bang Galore]

It does matter to understand what we actually get and how this offer must be seen. Personally, I would have prefered a fast FMS route with full production outside of India too. We need these guns now, not somewhere in future, when all contracts are fixed, the production in India is set up and we absorbed whatever ToT we get. It's better to have them now and let Bharat Forge develop a fully indigenous system that can be added later, than wasting more time for political agendas.

That makes no sense, it won't take very long to transfer the line to India and if the order numbers are sufficient, outsourcing can happen fairly quickly. Companies like Bharat Forge won't take a very long time in mastering whatever they have to, that is their job & they have a very good reputation for doing their job well & in quick time. This is an offer worth looking at . Always good to allow companies like Bharat Forge to develop competencies and not try to start from scratch.

 

[Abingdonboy]

What's wrong with Bofors they are not that old

True, they are pretty good for what they are which is why they are being upgraded with new FCS and being up gunned as well as new build ones being made (Dhanush). Although the ones in service now have limited life left in them.

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The question is, how useful is the ToT that is offered! They fulfilled the ToT ammount in MMRCA too, but failed to offer us critical ToT, since that is restricted to US laws.

I don't agree, compared to what was on the table before- no ToT and all made in the US this is a MASSIVE step up and India would be, frankly, stupid to turn this down. I didn't think BAE would even consider such an offer so I am pleasantly surprised.

With a production line in India they can be churned out so the IA get more than the 145 initially intended, the ToT can go to some worthy private players and who knows this could turn into another Do-228 story and India could export these guns to friendly nations now that there is no other M777 production line on the planet.

It does matter to understand what we actually get and how this offer must be seen. Personally, I would have prefered a fast FMS route with full production outside of India too. We need these guns now, not somewhere in future, when all contracts are fixed, the production in India is set up and we absorbed whatever ToT we get. It's better to have them now and let Bharat Forge develop a fully indigenous system that can be added later, than wasting more time for political agendas.

I think the possible time delays incurred in setting up a production line for the M777 in India (a year to 18 months at most) vastly outweigh the benefits India would gain from having such a production line on its soil with a degree of ToT (whatever that may be).

Whilst artillery on the whole was needed yesterday by the IA, these ULH are not such a pressing requirement, the MSC is in the early stages of being raised and the CH-47F meant to haul these guns around aren't even on order yet. Take this deal IMHO.

 

[rajnikant]

<ot>hey guys, request dont quote the opening post or any multi page response or quote relevant lines..guys on mobile it makes tough to navigate..my 2 cents...</ot>

 

[sancho]

That makes no sense, it won't take very long to transfer the line to India and if the order numbers are sufficient, outsourcing can happen fairly quickly.

We are talking about India right? The first thing now would be for BAE to find a suitable partner, besides all the contractual matters and who told you that any current gun producer will be chosen? These privat companies choose partners based on their relations or benefits, BAE for example has a history of teaming up with Mahindra for JVs, all that makes it far more difficult to to make a fast production, compared to use the available capabilties in the UK and US.

I don't agree, compared to what was on the table before- no ToT and all made in the US this is a MASSIVE step up and India would be, frankly, stupid to turn this down. I didn't think BAE would even consider such an offer so I am pleasantly surprised.

It's a step forward in the US ToT policy true, but it's not necessarily a good step forward in critical ToT. What's left when the gun will be produced in the US? Nothing important, so nothing to gain for India. Did we had gained if we produced the F18 airframe in India, while all critical parts, like radar, avionics and engine would come from the US and assembled in India only? Of course not! That's why you have to differ the political improvements, with the industrial improvements.
They do know why they mention the Make in India policy now, because it's based on basic manufacturing in India and that's what they try to sell us here too, manufacturing the base of the gun, but that doesn't make us any closer to develop a similar gun.

With a production line in India they can be churned out so the IA get more than the 145 initially intended, the ToT can go to some worthy private players and who knows this could turn into another Do-228 story and India could export these guns to friendly nations now that there is no other M777 production line on the planet.

Why do you think the production line closed? Because the interest in these kind of specialised howitzers is low and that won't change somehow because India produces some basic parts. Lets not go over board here with our expectations.

 

[Echo_419]

True, they are pretty good for what they are which is why they are being upgraded with new FCS and being up gunned as well as new build ones being made (Dhanush). Although the ones in service now have limited life left in them.


I don't agree, compared to what was on the table before- no ToT and all made in the US this is a MASSIVE step up and India would be, frankly, stupid to turn this down. I didn't think BAE would even consider such an offer so I am pleasantly surprised.

With a production line in India they can be churned out so the IA get more than the 145 initially intended, the ToT can go to some worthy private players and who knows this could turn into another Do-228 story and India could export these guns to friendly nations now that there is no other M777 production line on the planet.


I think the possible time delays incurred in setting up a production line for the M777 in India (a year to 18 months at most) vastly outweigh the benefits India would gain from having such a production line on its soil with a degree of ToT (whatever that may be).

Whilst artillery on the whole was needed yesterday by the IA, these ULH are not such a pressing requirement, the MSC is in the early stages of being raised and the CH-47F meant to haul these guns around aren't even on order yet. Take this deal IMHO.

Agrees the new Govt's diplomacy has really helped us to get TOT & we should grab these deal with both hands ASAP,not only we will induct a world class gun but we will gain massive Tech know how & Industrial advantages

 

[Bang Galore]

We are talking about India right? The first thing now would be for BAE to find a suitable partner, besides all the contractual matters and who told you that any current gun producer will be chosen? These privat companies choose partners based on their relations or benefits, BAE for example has a history of teaming up with Mahindra for JVs, all that makes it far more difficult to to make a fast production, compared to use the available capabilties in the UK and US.

Doesn't matter who they pick as partner, Bharat Forge will still be pretty much the only option for their expertise. Mahindra, Tata or even L& T don't have the metallurgical skills to manage.

 

[pursuit of happiness]

BAE’s US arm to shift Howitzer assembly here | The Financial Express

Ahead of US President Barack Obama’s visit to India, the US arm of the London-headquartered BAE Systems has offered to transfer its entire M777 155mm/39-calibre ultra lightweight Howitzer (ULH) assembly line from the US to India to revive the stalled sale of 145 guns to the Indian Army.

The proposal had hit an impasse last year over offsets and price issues as it also involved direct import of the Howitzers from the US in a foreign military sales route (FMS) under the buy (global) category of the Indian Defense Procurement Procedure (DPP).

The new offer is in line with Prime Minister Narendra Modi’s ‘Make in India’ initiative and will be on the agenda of delegation-level talks between the two sides. The gun has been extensively tested and evaluated in India previously. The proposal has been scrutinised in nine meetings of the Defense Acquisition Council (DAC) and eight versions of the offset proposals have been submitted to the Indian government for approval till October 2013.

The US leader, during his meeting with Modi, is expected to pitch for scaling up India-US defense trade and push for Defense Trade and Technology Initiative (DTTI), which was launched in 2012 and 2013 by his new defense secretary-nominee Ashton B Carter.

John Kelly, BAE System’s vice-president for business development and strategic planning platforms and services land systems and armament, who is spearheading the renewed campaign for sale of the M777 guns to India, confirmed: “We have offered to bring the gun’s assembly, integration and testing to India.”

The proposal also involves increasing the indigenous component of the gun. But the quantity that India orders should be significantly larger for this offer to be more attractive. “If the quantity is higher, then we have more opportunity for indigenisation and that’s what we are working through at the moment,” he said. Last year in July, the then defence minister Arun Jaitley had told the Parliament, “The case for procurement of ultra-light howitzer guns through the US government has not progressed due to cost issues and because the vendor has not been able to come up with a proposal fully compliant to the offset requirements.”

The ministry of defence (MoD) declared that the earlier offsets proposal from BAE Systems was non-compliant because the BAE Systems-owned US subsidiary, which manufactures the gun at Watervliet, New York, was not taking responsibility for the mandated 30 % offsets.

The stalled proposal involved sister companies under the BAE Systems’ group umbrella for fulfilling the then $209 million offsets on behalf of BAE Systems, Hattiesburg, Mississippi. But the MoD insisted on offsets being implemented by the prime for the contract.

The problem now seems to be resolved. “With regards to the possible Foreign Military Sale of the M777 Ultra-Lightweight Howitzers between the the two countries, the US government will contract with BAE Systems Global Combat Systems Limited and with other wholly owned subsidiaries of BAE Systems for the purposes of supporting our offset obligations,” a BAE Systems official later clarified.

This suggests that under the fresh bid, BAE Systems Global Combat Systems will be the prime for the contract, which will actually be signed by the US Department of Defense (DoD). The US Department of Defence (DoD) which underwrites the deal with India, has also accepted the “clarifications” and BAE Systems has identified 40 Indian Offsets Partners with a wide geographical spread to execute the offsets obligations..

The other problem over “cost issues” appears exaggerated due to a misunderstanding. The first offer, which stated a $697-million price, expired in October 2013. This necessitated the matter being referred to the US Congress for the second time for approval, which was done in August 2013. This Congressional notification provides a five-year validity to the offer, a BAE Systems official said.

“The Congressional approval left a generous headroom by stipulating a price ceiling of $885 million. This was wrongly seen as the new price, which is unlikely to hit that ceiling. We’ll keep the price within the 6-8 % boundary,” said Kelly, suggesting a new price to be close to $750 million.

The renewed offer to shift the assembly line to India involves Transfer of Technology to a chosen local partner, Kelly said. All local players, including the Ordnance Factory Board (OFB), could be considered. The technological challenge involves the use of Titanium. The FMS proposal does not envisage a joint venture, he said. Significantly, the gun barrel of the American gun cannot be made in India. This is barred by the Berry Amendment, a Congressional Act in the US.

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is it the same genius ?

 

[surya kiran]

@sancho
@Bang Galore
they already have a JV with M&M

 

[Ind4Ever]

Great news. We can go ahead with party dress and greet them with make in India song . M777 is highly advanced artillery. Many countries use them in large numbers so serviceability won't be a hard task in the future also. Wat not ? We will get our private players roped into this chain. Most of them are already developing verities of Artillery guns on their own. They can get the best technology from BAE and future requirements can be met with Made in India ... Awsome. Please accept

 

[sancho]

@sancho
@Bang Galore
they already have a JV with M&M

They had one, not sure if they joined with them again, but as I said, it's likely that they do it.

 

[Abingdonboy]

It's a step forward in the US ToT policy true, but it's not necessarily a good step forward in critical ToT. What's left when the gun will be produced in the US? Nothing important, so nothing to gain for India. Did we had gained if we produced the F18 airframe in India, while all critical parts, like radar, avionics and engine would come from the US and assembled in India only? Of course not! That's why you have to differ the political improvements, with the industrial improvements.
They do know why they mention the Make in India policy now, because it's based on basic manufacturing in India and that's what they try to sell us here too, manufacturing the base of the gun, but that doesn't make us any closer to develop a similar gun.

Sir you are missing the woods for the trees! Even if it is the most basic of ToT it is more than was pitched before. One can't expect the moon and the stars from the outset and until these demands are met nothing goes forward. How does change come? Very often it is bit by bit not overnight revolution. The US is not going to turn their entire ToT policy with India around on a dime. This is a positive step forward and India should take it otherwise what kind of single is that sending the US? They often complain the Indian side doesn't do enough to acknowledge their offers, they have, in someway, extended their hand for India to slap it away now because it is not precisely what they want would be foolish in the long run.

Prove to them that India is a reliable partner and the ToT policy will be relaxed for sure, these things are controlled by Congress and thus open to changing as long as India can please these guys.


Anyway, it was said the this deal had been stalled because of offset issues regarding BAE this "make in India " pitch by BAE is surely their attempt to move past these issues and thus I don't see much getting in the way of this deal now.

Why do you think the production line closed? Because the interest in these kind of specialised howitzers is low and that won't change somehow because India produces some basic parts. Lets not go over board here with our expectations.

Indeed this is true but the situation can change, there may be demand in the future where there wasn't in the past. Just like there was demand from India and the production line closed because of issues, by the time India's orders are nearing their end who knows there could be interest from another nation and India could benefit in someway by already having the only M777 production line around.

If you think this is a deal India should turn its nose up at then i really don't know where you stand sir, this deal would benefit India both industrially and militarily, not going for it would hurt India- end of story.

 

[surya kiran]

They had one, not sure if they joined with them again, but as I said, it's likely that they do it.

They do. Its listed on the Bae site.