June 14, 2012
Credit: Credit: BAE Systems
Behind the wheeling and dealing at one of the world’s biggest arms shows this week, weapons makers are feeling the strain from shrinking Western defence budgets and could be forced into mergers or joint projects to survive.
A fearsome array of weapons and military equipment, ranging from assault rifles to tanks and sophisticated drones, was on display at Eurosatory, a week-long fair near Paris that defence firms from around the world use to showcase their wares.
Thousands of visitors, including defence ministry officials and senior army officers in uniforms dripping with medal ribbons and gold braid, toured the vast exhibition halls, taking aim with rifles, examining high-tech missiles and holding hushed conversations with salesmen.
Some armoured vehicles carried signs saying they were “combat proven” with the NATO-led force in Afghanistan.
Outside, small all-terrain vehicles and bridge-building trucks were put through their paces on a churned-up muddy demonstration ground featuring a mock Afghan village while tiny drones buzzed overhead filming the action.
Organisers said there were 1,400 exhibitors at the show this year, up 8 percent from the last show two years ago, suggesting a sector in rude health.
In reality, European and U.S. defence firms are being hit by sharp defence cuts their governments are driving through as they wrestle with economic crisis and budget deficits.
“Particularly in the West and in Europe, defence budgets are falling and therefore that means it is more competitive ... so defence companies are definitely feeling the pressure,” said Gordon Lane, managing director, defence, of the British defence industry trade group ADS.
Consolidation in the worldwide defence industry was “inevitable” in the next few years, he told Reuters at the show.