The Spanish government appointed Indra as the “national industrial coordinator” for the FCAS programme. The decision comes as a surprise for Airbus, which fears this decision will undermine decades of its growth and investment in Spain.
The acting Spanish Government has appointed the technology company Indra as the “national industrial coordinator” for the European FCAS (Future Combat Air System) defence programme, the largest joint European defence programme to date and the most ambitious in terms of technological development.
Indra, of which 18,71% are controlled by the Spanish State Company of Industrial Participations (SEPI), will perform this work together with industrial leaders designated by France and Germany (Dassault Avition and Airbus respectively). “Its selection constitutes recognition of its defence systems capabilities, its experience in international programmes and its suitability for coordinating and acting as a driving force of Spanish industry”, Indra stated in a press release. “For Indra, its designation as the national coordinator represents a significant boost, as it enhances its credibility and increases its competitive capacity and its access to major international programmes.”
Eyebrow-Raising at Airbus
However, the decision caused a controversy as it relegates Airbus to the background; 4,16% of Airbus are owned by SEPI. The President of Airbus Spain, Alberto Gutiérrez, sent a letter to all employees of the company, saying that the “surprising decision” could affect future investments of Airbus in Spain. “Airbus’ decades of growth and investment in Spanish industry, technology and supply chain will be undermined by this decision”, the company explains.
From a European multinational aerospace point of view, “only Airbus has the scale, capabilities and experience to better represent the industrial interests of Spain and work on equal terms with the French and German national coordinators, and this decision can affect the industrial influence and Spain’s participation in the largest aerospace and defence programme in the history of Europe”, Gutiérrez stated. Together with its aircraft production lines for passenger airlines, Airbus employs about 12.600 people in the factories of Getafe (Madrid) and Seville.
On the other hand, the State Secretary for Defense, Ángel Olivares, said that the “Future Combat Air System is a fundamental European cooperation programme to guarantee the future capabilities of our Armed Forces and our aeronautical industry. It must be considered a state project.”
In view of Airbus’ harsh words regarding the current government’s decision to nominate Indra, Olivares stated that “this selection will not hurt Airbus Spain”. “The Government guarantees to Airbus that it will receive the same workshare and of the same quality as if it had been the one designated as national industrial coordinator. Airbus and Indra do not compete with each other. Their areas of influence are different, so in no way Indra’s election is detrimental to Airbus”, the senior official of the MoD said.
Olivares detailed that “Indra will not individually decide how the workshare is distributed in Spain. It will be approved by the Government of Spain through the approval of the Technological and Industrial Plan prepared by the MoD in collaboration with the Ministry of Industry, the Ministry of Science and Research and the Ministry of Finance through the SEPI.”
The Spanish Champion of Defence
It should be remembered that Spain formally joined the FCAS project on 17 June 2019 when the defence ministers of France, Germany and Spain signed the Memorandum of Understanding at the “Paris Air Show”, with French president Emmanuel Macron as master of ceremony.
Indra’s surprising choice is interpreted as the Spanish government’s desire to build a so-called “Spanish defence champion”: a national company that can compete in the EU with French giants like Thales or Safran and German companies like Rheinmetall or MTU in future projects and in other markets.
Since June 2019, Indra has been trying to negotiate the takeover of the engine manufacturer ITP Aero, which is part of Rolls-Royce. But in July, the British engine manufacturer stated that the talks “had ended without an agreement between the parties”.
Indra is the only Spanish company among the top 100 defence companies in the world. The company is currently a member of nine consortia of the European Defence Industrial Development Programme (EDIDP) and acts as coordinator of three of the five consortia led by Spain, of which the PESCO Strategic Leadership Programme is probably the most important programme involving Italy, Germany, France, Luxembourg and Portugal.
Indra’s technological products (radar, electronic defence, command and control systems, mission systems, etc.) are widely recognised in the defence industry, as is its ability to implement complex projects around the world. Indra also participates in international programmes, including European programmes such as Eurofighter, A400M, NH90, Meteor and ESSOR, as well as non-European and NATO-related programmes such as ESSM, FLEPS, ACCS and many others. Indra employs around 28,000 people in Spain.
Investment of €110M Approved
Regarding the FCAS programme, on 30 August 2019 the Spanish Council of Ministers authorised a budget of €110M to be spent over the next four years: €10M (2019), €60M (2020), €20M (2021) and €20M (2022).
The objective of this budget is to participate in the initial phase of the Technological Demonstration Phase (phase 1A). “Spain’s participation in this first phase is considered essential to ensure that national operational requirements are taken into account in FCAS and to enable the involvement of national companies in the project,” Spanish MoD staff told ESD.