Special Report – Heavy Duty Gas Springs and Gas Hydraulic Systems by The Magazine Production Company

Special Report

Heavy Duty Gas Springs and Gas Hydraulic Systems

“Growing Global Demand for KALLER Hydrop in the Military Market” Heavy Duty Gas Springs for Heavy Armoured Vehicles The Changing Role of Heavy Armoured Vehicles The Changing Demand for Heavy Armoured Vehicles A Well Sprung Future?

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Published by Global Business Media

Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom Switchboard: +44 (0)1737 850 939 Fax: +44 (0)1737 851 952 Email: info@globalbusinessmedia.org Website: www.globalbusinessmedia.org Publisher Kevin Bell Business Development Director Marie-Anne Brooks Editor Mary Dub Senior Project Manager Steve Banks

“Growing Global Demand for KALLER Hydrop in the Military Market”

By Peter Olofsson

Additional Survivability Protection In-House Manufacturing and Assembly Leader in Gas Spring Technology The Patria Order A Partner Who Develops Tailor-Made Solutions Acquisition of “Hydrop”

Heavy Duty Gas Springs for Heavy Armoured Vehicles

Mary Dub, Editor

The New Second Term Obama Administration’s Priorities The Reduction in Service Personnel in the United States So Where Does This Leave the Market for Heavy Duty Gas Springs in the Defense Market? The Logistic Backup to Obama’s ‘Light Footprint’

The Changing Role of Heavy Armoured Vehicles

Don McBarnet, Staff Writer

Advertising Executives Michael McCarthy Abigail Coombes

What Price Protection? An Important Underestimation of the Role of Heavy Armoured Vehicles The Marines Adapt the MRAP for Their Own Needs

Production Manager Paul Davies

The United States Government Accountability Office

For further information visit: www.globalbusinessmedia.org

The Changing Demand for Heavy Armoured Vehicles 11 Don McBarnet, Staff Writer

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© 2013. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner.

What Does Lower Levels of Demand for Heavy Armoured Vehicles Mean for Contractors? The Important Export Hurdle of Licensing and End-Use Certification British Contractors Face Consequences of Cut-Backs in Demand and Poor Procurement Policies The Threat of Alternative New Technologies

A Well Sprung Future?

Mary Dub, Editor

The Future Demands of Military Grade Applications The Rocky Story of the Marines EFV (Expeditionary Fighting Vehicle) Establishing the Marines’ Need for a New AFV The Consequences of High Development Costs Consequences of Suppliers to the Military Market

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SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

Foreword T

he focus for this Special Report is gas springs

The third piece looks at the troubled tale of the

and gas hydraulic systems for stamping dies

MRAP (Mine-Resistant Ambush Protected) vehicle

and gas hydraulic suspension systems for heavy-

and the Humvee, the High Mobility Multipurpose

duty off-road vehicles. These stalwart mechanisms

Wheeled Vehicle (HMMWV). These important

provide the repeated power and reliability to deliver

workhorses of the battlefield have proved invaluable

smooth suspension to the automotive industry or

in saving soldiers’ lives but have proved controversial

the military market.

to Congress.

The Report opens with an article that looks at

It would be wrong to say that the prime contractors or

the operations of Strömsholmen, the global

the departments of defence were not implicated and

leader in the design and manufacture of KALLER

complicit in the varying demand for their products. As

industrial gas springs. The article describes

the third story tells, Ministries of Defence have been

the advantages of its advanced suspension

their own worst enemies in the mismanagement of

technology providing additional survivability

armoured vehicle development projects.

protection both by reducing damage from IEDs and

To dismiss the gloom surrounding the next ‘fiscal

allowing alternate off-road routes. Two years ago it

cliff’ for defence cuts on March 1 2013, or the

acquired ‘Hydrop’, whose assets include product

prevailing economic data about economic growth

lines with advanced suspension solutions, primarily

would be naive. However, global growth figures are

for defence applications.

not uniform – there is a strong and resilient demand

Gas springs and gas hydraulic systems for stamping

for products in the Middle East, India and Far Eastern

dies and gas hydraulic suspension systems are of

markets. The contractors that can focus there will

key importance to the heavy armoured vehicles that

undoubtedly find good business.

are critical to any and every armed force, whether they are on stability operations or humanitarian assistance. The second article looks at why these vital powerhouses of the armed forces have had a less central role in conflict in the last decade.

Mary Dub Editor

Mary Dub has covered the defence field in the United States and the UK as a television broadcaster, journalist and conference manager.

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SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

“Growing Global Demand for KALLER Hydrop in the Military Market” Irina Kvarnström, Strömsholmen’s Business Development Manager Things are going splendidly for Strömsholmen. The company develops, manufactures and markets KALLER gas springs and gas hydraulic systems for stamping dies and KALLER Hydrop gas hydraulic suspension systems for heavy duty off-road vehicles. Strömsholmen has been developing and refining this technology since 1983 but has been in the business since 1876. For many years, it has been a world leader with exports of 95 percent. Today, Strömsholmen has nine companies worldwide and is an independent business of Barnes Group Inc. (NYSE:B), located in the U.S. By Peter Olofsson

“Our in-depth knowledge of vehicle dynamics and know-how gained in the automotive industry makes a difference in the defense industry,” says Irina Kvarnström, Business Development Manager at Strömsholmen, Tranås, Sweden.

“Strömsholmen is the global leader in the design and manufacture of KALLER industrial gas springs with a clear focus on the automotive industry. In addition, we are designing and manufacturing KALLER gas hydraulic suspension products for heavy duty off-road vehicles such as construction equipment and military vehicles. Our in-depth knowledge of vehicle dynamics and knowhow gained in the automotive industry makes a difference in the defense industry,” says Irina Kvarnström, Business Development Manager at Strömsholmen, Tranås, Sweden. The aim of Strömsholmen’s operations is to develop and produce gas springs and other

closely related products at a good level of profitability primarily for the sheet metal working industry and special areas for machine and vehicles. The products must have a high level of reliability and fulfill the customers’ requirements, needs and expectations. The gas springs and the gas hydraulic systems must also meet the legal requirements of various markets. The products must be delivered on time and in the right way. Efforts are made to constantly reduce the time from order to delivery to the end customer. “Our sealing technology expertise gained from our long experience with industrial gas springs allows the military vehicles to expand their www.defenceindustryreports.com | 3

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

The adjustable suspension provides additional survivability protection by both reducing the damage from improvised explosives devices (IEDs) and allowing alternate, unpredictable off-road routes.

“Our sealing technology expertise gained from our long experience with industrial gas springs allows military vehicles to expand their operational range from desert heat to North Pole cold. Better suspension means better comfort and personnel safety,” says Ms. Kvarnström.

operational range from desert heat to North Pole cold. Better suspension means better comfort and personnel safety. Since gas springs drastically reduce vibration levels, the vehicle and the driver can perform better. This increased isolation decreases wear on the vehicle and driving surface. Only gas springs can combine very heavy loads with soft spring stiffness in a small package,” Ms. Kvarnström says.

suspension system. Furthermore, the compact nature of the gas hydraulic suspension layout minimizes the design and space compromises associated with traditional steel spring elements for off-road vehicles with long suspension travel. Together with the customer, KALLER can develop everything from “basic” suspensions to ride height control to intelligent semi-active suspension systems.

Additional Survivability Protection

In-House Manufacturing and Assembly

KALLER advanced suspension technology offers ride height control of the vehicle for air transportability and survivability. The adjustable suspension provides additional survivability protection by both reducing the damage from improvised explosives devices (IEDs) and allowing alternate, unpredictable off-road routes. The suspension systems also allow for pay-load compensation to keep the vehicle on the same ride height independent of pay-load, which improves the handling of the vehicle and makes possible a field-reconfigurable, fleet-standard

Strömsholmen has in-house manufacturing and assembly in both Sweden (10,000 square meters) and North America (3,500 square meters) that rely on state-of-the-art CNC machinery with a high degree of automation. For 136 years the company has been based out of the small community Tranås in Sweden and will continue to do so. Right now Strömsholmen is growing at full speed. “We had outgrown our production facilities and offices, so we had to expand with 3,100 square meters at Verkstadsgatan in Tranås. In addition, we are building an outdoor test track for our Hydrop

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SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

Patria’s order was the first serial delivery of KALLER gas hydraulic suspension systems for commercial and military heavy duty off-road vehicles.

delivered to the Finnish Patria Group. Patria’s order was the first serial delivery of KALLER gas hydraulic suspension systems for commercial and military heavy duty off-road vehicles. In the next few years Patria will deliver 113 wheeled combat vehicles, with an option for an additional 113 systems to the Swedish Defence Materiel Administration (FMV). The vehicles must be in operation within the Swedish Armed Forces in 2014. “The order is the result of a technology development that began six years ago and is based on gas spring technology that has made Strömsholmen a world leader. The vehicle weight and operating environment required a rugged lightweight solution which KALLER gas hydraulic suspension products meet,” Strömsholmen’s Business Development Manager explains.

A Partner Who Develops Tailor-Made Solutions line. Right now, we have 380 employees with an annual turnover of USD 100 million and good profitability. New acquisitions, new technology, exciting projects and great clients mean that we are currently hiring new employees,” Ms. Kvarnström explains.

Leader in Gas Spring Technology Strömsholmen has been responsible for the development of many ground-breaking engineering products since 1876. However, in 1983 the pioneering development of the gas spring for press tool applications exceeded all previous engineering achievements. In one stroke, Strömsholmen became the world leader in gas spring technology. The brand name, ‘KALLER’, is synonymous with exceptional quality and reliability. “We can make a difference because of our indepth knowledge of vehicle dynamics and knowhow gained in the automotive industry. When working with the tool and die industry we work mainly with a standardized product portfolio and together with our distributors. When dealing with the defense industry we are working more direct with the end user and strive to establish engineer to engineer contact at the earliest possible point. Close co-operation with the end customer ensures that we provide the best possible solution,” Ms. Kvarnström comments.

The Patria Order Against tough international competition, Strömsholmen won the multimillion U.S. dollar suspension order for Patria. The suspension system, which will be part of the Swedish Armed Forces’ new wheeled combat vehicles, is being

“Strömsholmen with its brand name KALLER, is not only a supplier of quality products but a partner who develops tailor-made solutions that meet and exceed customer expectations. We always synchronize our development work in close cooperation with our customers. Thanks to our short decision chains and flexibility, we combine speed with quality.” “With manufacturing and assembling in Sweden and in the USA, our overarching strategy is to insource as much as possible from development, testing and production. Right now we are expanding our facilities in Sweden to allow for more in-house testing of components and complete suspensions units as well as fully assembled vehicles. In addition we are building an outdoor test track. The current expansion will also allow for increased in-house production. Strömsholmen has continuously invested in state-of-the-art production technologies to keep ahead of our competitors and to offer economies of scale to our customers. Our company’s machining resources are a customer’s guarantee of consistent quality. The current production pace is running around 1,000,000 heavy duty gas springs and suspension units per year and we plan to continuously increase future output.”

Acquisition of “Hydrop” As an independent strategic business unit of Barnes Group Inc., USA, (NYSE:B) Strömsholmen two years ago announced the acquisition of the gas hydraulic suspensions assets, better known as “Hydrop”, from Swiss-based Curtiss-Wright Antriebstechnik (CWAT), part of the Curtiss-Wright Corporation. These assets include product lines with advanced suspension solutions primarily for defense applications. The products are being integrated into the operations at Strömsholmen. www.defenceindustryreports.com | 5

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

“The current production pace is running around 1,000,000 heavy duty gas springs and suspension units per year and we plan to continuously increase future output.”

These suspension systems are sold under the KALLER brand name. “This acquisition complements Strömholmen’s existing product offering and represents an important step in our growth strategy by adding more know-how and field experience. We see a growing global demand for configurable suspension systems that can encompass a plethora of mission-specific vehicle versions, combined with the increasing demands on suspension performance for crew comfort and battle readiness. The defense customers require vehicles to operate in more demanding environments and also require improved survivability, mobility and transportability. We are excited about adding these capabilities to our portfolio, and our strategy is to offer to all major military markets in the world the world’s best suspension solutions,” Irina Kvarnström concludes.

Contact Strömsholmen AB Ms. Irina Kvarnström Visiting address: Verkstadsgatan 16 P.O. Box 216 SE-573 23 Tranås Sweden Tel: +46 140 571 00 E-mail: irina. kvarnstrom@kaller.com

FACTS KALLER Hydrop – system description KALLER has extensive experience in producing gas hydraulic systems. The product range begins with a passive system and scales to semi-active systems. The result of the especially progressive characteristic curve in the static position is a favorable spring characteristic with comfort for the driver and the crew. The whole interior space of the vehicle is free, without the need for canals or coverings. The highly developed sealing systems, proven on long duration tests, lead to high reliability and availability. Each gas hydraulic suspension systems can be installed with an individually adjusted internal damper.

FACTS Advantages of KALLER Hydrop gas hydraulic suspension system • High off-road speed capacity • High drive-comfort and low crew-fatigue •A daptable spring and damping characteristics •B uilt-in future-proofing and mid-life update flexibility •L ow weight and low space claim of suspension unit •H ighly flexible vehicle construction by customized “Hydrop” design • Height adjustment for air transport •L eveling system for ground clearance adjustment and/or vehicle hiding •O verload capability force re-distribution in case of damage of units • Low maintenance requirements • High reliability and high MTBF •O ne common Hydrop unit covers many versions of a base vehicle

FACTS KALLER Hydrop stands for “Lightweight solutions for heavyweight champions”. KALLER Hydrop develops, manufactures and markets gas hydraulic suspension systems for heavy duty off-road vehicles. KALLER Hydrop can improve the vehicle suspension in terms of Performance, Protection and Payload. KALLER Hydrop offers: Reduced weight - increased payload - improved mobility - lower fuel consumption Enhanced mobility - fast in fast out off-road - maximized protection - better survivability - alternate driving routes - extended tactics options Ride height control - improved comfort - rested crew fit to engage - enhanced IED protection

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SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

Heavy Duty Gas Springs for Heavy Armoured Vehicles Mary Dub, Editor

An impressive (and impressed!) delegation from the Swedish Armed Forces at a recent exhibition. KALLER Business Development Manager Irina Kvarnström takes command

s a critical component of medium and heavy armoured vehicles and defence aerospace applications, heavy duty gas springs are subject to the market pressures of the final product. And these heavy vehicles, helicopters and airplanes are in a vulnerable position in 2013 as the new Obama administration and the new appointees at the Pentagon and CIA fight their way through congressional hearings. The new environment of an upcoming drawdown in Afghanistan in 2014, light footprint engagement in the Middle East and a dramatic drop in manpower numbers and procurement programmes make the American market look rocky.

The New Second Term Obama Administration’s Priorities In early 2013 it is difficult to predict exactly where the new administration’s priorities lie. But there are key indicators. At Senator John Kerry’s congressional confirmation hearings he said: the Secretary of State’s role would be “in a world where cyber security is our greatest threat. I guess I‘d call [cyber] the

21st-century nuclear weapons equivalent. We are going to have to engage in cyber diplomacy and cyber negotiations and try to establish rules of the road that help us to be able to cope with this challenge.”1 This is not a threat that can be deterred or confronted by armoured vehicles. Admiral Mike Mullen, former Chief of Staff, would not agree with Senator Kerry, he is quoted as saying that “the national debt is the country’s biggest security threat.”2 And in a piece in the New York Times last week, Chuck Hagel, the nominated Secretary for Defence, is seen as a man with a job to do: Chuck Hagel has been nominated to supervise the beginning of this generation-long process of defense cutbacks. If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot… The real question is, how will he begin this long cutting process? How will he balance modernizing the military and paying current personnel? How will he recalibrate American defense strategy with, say, 455,000 fewer www.defenceindustryreports.com | 7

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot…

service members? It would be foolish to try and answer those questions with an optimistic statement about the need for equipment programs that include new or renewed armoured vehicle requirements.3

The Reduction in Service Personnel in the United States Under the pressure of fiscal restraint and a new strategy that excludes the probability of large-scale stability operations, the Army must manage a deliberate drawdown. Most notably, it must reduce its end-strength by 80,000 soldiers, including eight brigade combat teams (BCTs).4 The Army’s enduring axiom, “Soldiers are the centrepiece of the Army,” reflects the institution’s deep investment in its personnel. The Army’s most expensive, and most important, resource is its people. Over the last decade of war, the Army created models that enabled rapid growth. Now it must modify these models to meet its future needs, as the Army marches toward a smaller, capability-focused force.5

So Where Does This Leave the Market for Heavy Duty Gas Springs in the Defense Market? Barnes Inc. in the United States has a strategy to fight the downturn in the market. They are a producer of precision-machined and fabricated components and assemblies for original equipment manufacturer turbine engines, airframe and industrial gas turbine builders throughout the world. For the military, they are focussing more on repair, maintenance and upgrading of legacy systems. There is a market as a provider of jet engine component overhaul and repair services for many of the world’s major turbine engine manufacturers, commercial airlines and the military. They are a manufacturer of aerospace

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aftermarket spare parts and the provider of repair of aerospace engine components.6

The Logistic Backup to Obama’s ‘Light Footprint’ It is easy to become distracted by the headlines focussing on new counter insurgency and stability operations that rely on agile, fast moving, highly skilled soldiers. Both humanitarian operations and stabilisation expeditions require heavy vehicle back up. The British Ministry of Defence lists its heavy armoured vehicles, many, if not all of which require heavy duty gas springs and other highly engineered parts: there are the Protected Patrol Vehicles, Land Rover Snatch-2, the Viking, the Vector, the Jackal, Mastiff, and the Panther. There is heavy engineering equipment: the Titan, M3 Amphibious Bridging Vehicle, the Shielder, the Challenger Armoured Repair and Recovery Vehicle, the Terrier, the Trojan and the Python. The list goes on and on. Then of course, the Cinderella vehicles that are vital for troops’ survival – the logistics vehicles, for example, the All-Terrain Mobility Platform, the Support Vehicles, the Heavy Equipment Transporter, Land Rover Battlefield Ambulance, and, of course, the Rough Terrain Container Handler. I have given this list because it illustrates how one relatively small country, the United Kingdom, facing dramatic cuts in manpower and services, still has a formidable array of heavy armoured vehicles which it has to keep in a state of readiness for unknown future activity and which all deliver heavy lift capabilities and require gas springs and finely tooled camshafts and similar. Despite the dramatic defence cutback in new equipment and manpower, a basic level of readiness of all armed forces will be a well maintained force of patrol vehicles, support vehicles and logistics vehicles.

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

The Changing Role of Heavy Armoured Vehicles Don McBarnet, Staff Writer

Introduced in 1983, the KALLER gas spring technology quickly led to worldwide demand. The Safer Choice – Training, Safety and Reliability – has always been a KALLER top priority for providing the safer working environment

t is in the campaigns in both Iraq and Afghanistan that the lifesaving role of heavy armoured vehicles has seen important validation. For the soldier on tour in difficult terrain and at risk of improvised explosive devices the best new designs of armoured vehicles are lifesavers. In early 2011 The United States Congress reviewed the level of spending on MRAPs (Mine-Resistant, Ambush-Protected) Vehicles. Andrew Feickert, Congressional Research Service Specialist in Military Ground Forces takes up the story. “MRAPs have been described as providing significantly more protection against Improvised Explosive Devices (IEDs) than up-armoured HMMWVs. Currently, the Department of Defense has approved an acquisition objective of 25,700 vehicles, of which 8,100 are the newer Military-All-Terrain Vehicle (M-ATV) version, designed to meet the challenges of Afghanistan’s rugged terrain. DOD officials have indicated that this total may be increased depending on operational needs in Afghanistan. DOD reports that, as of January 6, 2011, 13,624 MRAPs had been delivered to Afghanistan, including more than 6,500 M-ATVs. The Army

has recently said that it will begin development of yet another MRAP version—the “UltraLite MRAP”—which raises questions about possible vehicle redundancies.”7 The market for heavy armoured vehicles in Afghanistan does not seem in doubt.

What Price Protection? But is that really so? There has been a prolonged and internecine debate about the cost and effectiveness of the MRAP and the Humvee. From the start, there has been concern that the vehicles were too costly. In July 2012, the analysis by economists at Syracuse University and the Naval Postgraduate School concluded that vehicles given a medium amount of armour substantially reduced fatalities in a military unit compared with thin-skinned Humvees, but replacing those upgraded Humvees with MRAPs did not appreciably reduce casualties further. The $600,000 vehicle, they concluded, was no better than a $170,000 vehicle.8 What had happened was that Defense officials had mistakenly assumed the conflict was under control and left American soldiers to ride in thin-skinned Humvees that provided no protection against lethal roadside bombs. When field commanders urgently www.defenceindustryreports.com | 9

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

Despite manufacturers being able to look to civilian markets and foreign buyers there is a tangible impact from the reduction in the number of Pentagon purchases.

requested shipments of MRAPs, which have heavy armour and V-shaped bottoms to deflect blasts from below, they were largely ignored for more than two years. It took persistent prodding by then-Senator Joseph Biden Jr. and others in Congress and an effort under former Defense Secretary Robert Gates to speed up production in 2007 and get the vehicles deployed. Since then, more than 24,000 MRAPs have been sent to Iraq or Afghanistan. The program has cost more than $47 billion.

An Important Underestimation of the Role of Heavy Armoured Vehicles The question of appropriate armour for the battlefield has a rocky history. The Pentagon was unconscionably slow in getting armoured vehicles to its troops in Iraq eight years ago and was also slow to respond to requests for better vehicles. Incredibly, the Pentagon told Army and Marine divisions headed to Iraq in early 2004 to leave their tanks and armoured personnel carriers behind. But new research has validated the high spend on up-armed MRAPs by their important role in saving soldiers’ lives. The new Pentagon report, by Ashton Carter, the deputy defense secretary, and another department expert, has analysed fatalities per roadside bombing. Using classified material not available to the academic researchers, it concluded that MRAPs save a significant number of lives. Mr. Carter said recently that the MRAP is “singularly responsible for saving the lives and limbs of thousands of service members in Iraq and Afghanistan.” Protecting the troops is paramount, and, clearly, these vehicles are better equipped to do the job.9

The Marines Adapt the MRAP for Their Own Needs While the use of MRAPs by the United States Army is welcomed by soldiers on operations, if not by congressional leaders or budget officials, the US Marines have been adapting the MRAP by adding improved suspension. The New York Times again: the Marines, although voicing

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support for the M-ATV program, have retrofitted a number of MRAPs with new suspension systems and reportedly are satisfied with the results. This apparent success calls into question not only if the Marines need all of the M-ATVs allocated to them by the Department of Defense, but also if the Marines’ retrofitted suspension system might be a more cost-effective alternative for the other services.

The United States Government Accountability Office The effect of the drawdown from Afghanistan and the defense cutbacks are having a ripple through effect on the suppliers of American Tactical Wheeled Vehicles. In a recent Government Accountability Office (GAO) Report in September 2012, the consequences of a period of uncertainty on Tactical Wheeled Vehicle Manufacturers from the decline were noted. The U.S. tactical wheeled vehicle (TWV) industrial base includes seven manufacturers that utilize common suppliers of major subsystems, such as engines and armour. Four of these manufacturers reported that their reliance on sales to the Department of Defense (DOD) varies, in part, as they also produce commercial vehicles or parts. Collectively, the seven manufacturers supplied DOD with over 158,000 TWVs to meet wartime needs from fiscal years 2007 through 2011. DOD, however, plans to return to pre-war purchasing levels, buying about 8,000 TWVs over the next several years, in part, due to fewer requirements. Despite manufacturers being able to look to civilian markets and foreign buyers there is a tangible impact from the reduction in the number of Pentagon purchases. The U.S. TWV industrial base, which includes manufacturers and suppliers of major subsystems, increased production to meet DOD’s wartime requirements. That base now faces uncertainties as DOD’s budget declines and operational requirements for these vehicles decrease. In addition to sales to DOD, U.S. manufacturers sell vehicles to foreign governments.10

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

The Changing Demand for Heavy Armoured Vehicles Don McBarnet, Staff Writer

hile the soldier on patrol may bless the lifesaving properties of the MRAP or the uparmoured Humvee, their role in current stabilisation operations is debated in Afghanistan. In a sustained attempt to foster good neighbour relationships with local Afghans, many commanders are aware of the negative impact of the way US troops present themselves in the field. Afghans see them as Ugly Americans and their up-armed vehicles are part of the image problem. Major Grant Martin is a U.S. Army Special Forces officer. He recently returned from Afghanistan where he worked as a planner in the CJ5 at NTM-A/CSTC-A. He describes a recent episode in Afghanistan. Local Afghans had articulated to the Americans their perception of the presence. Grant begins the piece with an explanation of how not to be an “Ugly American”11. Grant describes how Afghans dislike the way American soliders bombard ministers’ offices with multiple and uncoordinated visits from different NATO commands, drive with electronic jammers on where there is no associated threat, and wear body armour at all times and while driving in fast-moving convoys of uparmoured vehicles. It is clear that what a patrol leader might see as a lifesaving vehicle in the face of an uncertain and unknown enemy lurking in a village or market place, a local Afghan might see as an unnecessarily over-equipped foreign soldier occupying an unwanted strategic role in their country. As always the cost and the role of the heavy armoured vehicle court publicity and controversy.

What Does Lower Levels of Demand for Heavy Armoured Vehicles Mean for Contractors? A key potential market for Tactical Wheeled Vehicles (TWV) is foreign purchasers. However, moving to foreign markets is not straightforward. First there is the issue of right-hand drive vehicles which are costly to change over. Differing vehicle requirements are not the only issue, as the report to the US Government Accountability Office makes clear: sales of U.S.-manufactured TWVs to

foreign governments may be affected by multiple interrelated factors, including the availability of used DOD vehicles for sale, foreign competition, differing vehicle requirements, and concerns associated with U.S. arms transfer control regimes. U.S. manufacturers’ sales of used Army TWVs to foreign governments could affect their ability to sell new vehicles. U.S. manufacturers and foreign governments also identified a number of non-U.S. manufacturers that produce TWVs that meet foreign governments’ requirements, such as right-side drive vehicles.

The Important Export Hurdle of Licensing and End-Use Certification While U.S. manufacturers can produce vehicles that meet these overseas requirements, vehicles they produced for DOD generally have not. Finally, manufacturers and foreign officials had mixed views on how the U.S. arms transfer control regimes may affect foreign governments’ decisions to purchase U.S. vehicles. U.S. manufacturers and foreign officials expressed concerns with processing times and U.S. end-use restrictions, but foreign officials also said that such concerns have not been a determining factor when purchasing TWVs that meet their requirements.12

British Contractors Face Consequences of Cut-Backs in Demand and Poor Procurement Policies The United Kingdom’s Ministry of Defence has been burdened by poor practice in procurement resulting in a difficult mixture of overspend, delay, cancellation and failure to deliver. The National Audit Office Report gives the details13: In the period since the 1998 Strategic Defence Review, a number of significant armoured vehicle projects procured through the Department’s standard acquisition process have not been brought to fruition. There are details of a number of these projects where no vehicles have been delivered despite spending £321 million on projects that have been cancelled or suspended. The Department has spent a further £397 million www.defenceindustryreports.com | 11

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

In the period since the 1998 Strategic Defence Review, a number of significant armoured vehicle projects procured through the Department’s standard acquisition process have not been brought to fruition.

As an independent strategic business unit of Barnes Group Inc., USA, (NYSE:B), Strömsholmen two years ago announced the acquisition of the gas hydraulic suspensions assets, more known as “Hydrop”, from Swiss-based Curtiss-Wright Antriebstechnik (CWAT), part of the Curtiss-Wright Corporation

funding ongoing, but delayed, projects that are not currently planning to deliver any vehicles before 2013. Instead of going through the lengthy and bureaucratic procurement process, armoured vehicles have been bought through the Urgent Operations Budget. Since 2003, the Department has also spent approximately £2.8 billion buying and upgrading vehicles, using the Urgent Operational Requirements process, for operations in Iraq and Afghanistan.

The Threat of Alternative New Technologies While no one would deny the value and ubiquity of heavy armoured vehicles in many contexts, there is a strategic change taking place in the 12 | www.defenceindustryreports.com

use of unmanned aerial vehicles, which are used for both observation and combat. While the launchers of some of the larger models may require gas springs, many of the newer and lighter models are hand held and manportable. Such is the frequency and lethality of their use in Afghanistan that they have become an important centre of ethical and tactical debate. Their use for government approved ‘extra judicial executions’ occasionally across national borders have provoked outrage and controversy. However, debate or no debate they are an increasingly visible and capable technology that obviates the need for a heavy ground presence, much as they are sometimes called the ”unloved aerial vehicle”.14

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

A Well Sprung Future? Mary Dub, Editor

s an editor, writing about the future can be creating hostages to fortune. Being pessimistic in the face of economic growth data and defence cuts in the United States and Western Europe, is easy and a source of concern. However, there are hot spots of growth and confidence and high productivity. KALLER Hydrop in Strömsholmen in Sweden a subsidiary of Barnes Inc. in the United States is one such. They are able to satisfy future demand in the military sector by offering rugged gas springs that meet the extreme demands of the military sector. There is a vigorous global market place with strong demand that meets the needs of the rapid expansion of heavy industry and defence sector in the Middle East, India, East Asia and Australasia.

EFV (Expeditionary Fighting Vehicle) would be an armoured, fully tracked infantry combat vehicle operated by a three-person crew that can carry 17 combat-equipped Marines. It is to be a self-deploying, high-speed amphibious vehicle capable of transporting Marines from ships to objectives inland and aims to have the speed, manoeuvring capabilities, fire power, and protection to operate with main battle tanks on land. It is intended to have a 20-knot speed in the water and a 345-mile range ashore with a 45-kilometer-per-hour speed on hard-surfaced roads. The EFV is to be designed to have modular armour and expanded mine blast protection and mount a 30mm high-velocity cannon in a stabilized turret. The EFV is also supposed to be able to communicate in joint networks and operate as part of a joint land force15.

The Future Demands of Military Grade Applications

Establishing the Marines’ Need for a New AFV

The market is highly regulated and key suppliers list the regulations they meet. Some gas spring manufacturers are ITAR compliant, some DDTC registered exporter/manufacturer, some ATF registered as an importer of U.S. munitions, some Central some Contracting Registered, or DIBS registered, or even Exostar registered and the list goes on. These are highly relevant for military vehicles where gas springs are needed for seat and height adjustments, hatches and doors, antenna deployment and space operation. Similarly aerospace companies have complex regulations for hydraulic systems that manufacturers must meet. ISO9001 certification is required, as is the process of completing AS9100 approval. There is also a need for DO160E project management capability. Some aerospace contractors demand FAA certified 16G sled tests. The aerospace industry has really quite specific applications for gas springs for armrest storage, overhead storage bins, seat back/foot rests, video deployment, Nacell access, radar array and all important pilot and co-pilot seating.

The Marines have used their current AAV (amphibious assault vehicle) since 1971 and will continue to use it until replaced by the ACV (Amphibious Combat Vehicle) or a similar vehicle. Over the years, the Marines claim their old AAV has become increasingly difficult to operate, maintain, and sustain. As weapons technology and threat capabilities have evolved over four decades, despite upgrades, the AAV is viewed as having capability shortfalls in water and land mobility performance, lethality, protection, and network capability. The AAV’s two-mile ship-toshore range is viewed by many as a significant survivability issue not only for the vehicle itself but also for naval amphibious forces16.

The Rocky Story of the Marines EFV (Expeditionary Fighting Vehicle) It would be good to know that there was a strong future demand for something like the new United States Marines EFV. What is it? The

The Consequences of High Development Costs However, on January 6, 2011, after spending approximately $3 billion in developmental funding, the Marine Corps cancelled the Expeditionary Fighting Vehicle (EFV) program due to poor reliability demonstrated during operational testing. It was also cancelled as a result of excessive cost growth. Because the EFV was intended to replace the 40-year-old Amphibious Assault Vehicle (AAV), the Pentagon pledged to move quickly to develop a “more affordable and sustainable” vehicle. The delivery date may be 2024, but needs updating. This is not a good news story. And this story www.defenceindustryreports.com | 13

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

As weapons technology and threat capabilities have evolved over four decades, despite upgrades, the AAV is viewed as having capability shortfalls in water and land mobility performance, lethality, protection, and network capability.

Strömsholmen’s in-depth knowledge of vehicle dynamics and know-how gained in the automotive industry makes a difference in the defense industry

and stories like it have had a knock-on effect on the industry. General Dynamics17, an important prime contractor, reported on 23 January 2013, it was taking a significant write down for declining defence spending when it announced a $2.13bn fourth-quarter loss at the start of its “reset year”. The loss stemmed from $2.3bn in impairment charges, mostly a $1.99bn write down of goodwill associated with acquisition in the company’s information systems and technology group. The company also wrote down $191mn in intangible assets in its aerospace group and $110mn in intangible assets in IS&T.

Consequences of Suppliers to the Military Market For manufacturers traditionally reliant on the American and Western European markets, this sort of information is disappointing. However, 14 | www.defenceindustryreports.com

there are parts of the global market where demand is far more resilient. Companies who place their marketing resources there will reap the rewards of producing a strong, powerful and resilient product that delivers benefits to machine tool manufacturers and contractors for heavy duty off road vehicles for the civilian and military market. The mature markets of the United States and Western Europe will not be able to offer the hoped-for ‘peace dividend’ from the drawdown from Afghanistan in 2014, because their economies are mired in the demands to provide benefits for returning veterans and feed the demands for new technology and developments in robotics. Meeting the demand to maintain and renew heavy armoured vehicles and establish readiness with the aerospace fleet will continue to be a controversial business.

SPECIAL REPORT: HEAVY DUTY GAS SPRINGS AND GAS HYDRAULIC SYSTEMS

References: 1

http://killerapps.foreignpolicy.com/

Why Hagel Was Picked By DAVID BROOKS Published: January 7, 2013 515 Comments http://www.nytimes.com/2013/01/08/opinion/brooks-why-hagel-was-picked.html?src=me&ref=general&_r=1&

Why Hagel Was Picked By DAVID BROOKS Published: January 7, 2013 515 Comments

GEN Raymond T. Odierno, “CSA remarks at the U.S. Army’s Institute of Land Warfare Winter Symposium and Exposition,” United States Army Homepage

Online, <http://www.army.mil/article/74452/Regional_unit_alignments_could_match_bri- gades_with_combatant_commanders/> (25 February 2012). http://usacac.army.mil/CAC2/MilitaryReview/Archives/English/MilitaryReview_20130228_art006.pdf Colonel Thomas Boccardi, U.S. Army Meritocracy in the Profession of Arms

Barnes Inc website

Mine-Resistant, Ambush-Protected (MRAP) Vehicles: Background and Issues for Congress

Andrew Feickert Specialist in Military Ground Forces January 18, 2011 http://www.nytimes.com/2012/10/17/opinion/armored-vehicles-that-save-lives.html The New York Times EDITORIAL Armoured Vehicles That Save Lives : October 16, 2012 http://www.nytimes.com/2012/10/17/opinion/armored-vehicles-that-save-lives.html The New York Times EDITORIAL Armoured Vehicles That Save Lives : October 16, 2012 Government Accountability Office U.S. Tactical Wheeled Vehicle Manufacturers Face Period of Uncertainty as DOD Purchases Decline and Foreign Sales Potential Remains Unknown GAO-12-859, Sep 13, 2012 http://www.gao.gov/products/GAO-12-859

http://smallwarsjournal.com/jrnl/art/a-tale-of-two-design-efforts-and-why-they-both-failed-in-afghanistan A Tale of Two Design Efforts (and why they both failed in Afghanistan) by Grant Martin. Major Grant Martin is a U.S. Army Special Forces officer

Government Accountability Office U.S. Tactical Wheeled Vehicle Manufacturers Face Period of Uncertainty as DOD Purchases Decline and Foreign Sales Potential Remains Unknown GAO-12-859, Sep 13, 2012 http://www.gao.gov/products/GAO-12-859

National Audit Office Report by the Comptroller and Auditor General

HC 1029 Session 2010–2012 20 May 2011 The Ministry of Defence

http://www.armedforcesjournal.com/2012/11/11752540 Unloved aerial vehicles Gutting its UAV plan, Air Force sets a course for irrelevance BY LT. COL. LAWRENCE SPINETTA AND M.L. CUMMINGS http://www.fas.org/sgp/crs/weapons/RS22947.pdf The Marines’ Expeditionary Fighting Vehicle (EFV): Background and Issues for Congress by Andrew Feickert Specialist in Military Ground Forces March 14, 2011

http://www.fas.org/sgp/crs/weapons/RS22947.pdf The Marines’ Expeditionary Fighting Vehicle (EFV): Background and Issues for Congress by Andrew Feickert Specialist in Military Ground Forces March 14, 2011

Thursday 24 January 2013 ‘General Dynamics hit by decline in defence spending’ By Robert Wright, New York The Financial Times.

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