Military Ministry

Defense on the Offense

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It only fires potatoes at the moment.
  • Why it matters

    Why it matters

    The German army has been plagued by procurement and technical problems. This could damage the career of Defense Minister, Ursula von der Leyen, a potential successor to Chancellor Merkel.

  • Facts

    Facts

    • The KPMG report into Germany’s military shortfalls was presented on Monday in Berlin.
    • It identified 140 problems and risks.
    • Only 42 of Germany’s 109 Eurofighter jets are operational.
  • Audio

    Audio

  • Pdf

It has been an embarrassing couple of weeks for Germany’s defense minister, Ursula von der Leyen. A series of mishaps has shown up the flawed state of German military equipment.

Now, however, she is pledging to sort out the problems, after a report criticized the way the government manages its contracts with suppliers.

The minister is under pressure to act fast.

After faulty planes prevented the delivery of aid to Ebola-hit West Africa and weapons to Kurds in Iraq, questions were raised about Germany’s ability to fulfill its military commitments. A recent parliamentary report found that only 42 of Germany’s 109 Eurofighter jets are actually operational. There are also ongoing delays with the delivery of the A400 military transport plane.

Ms. von der Leyen has defended herself on the basis that these problems have gone back for years, but that excuse has a short shelf-life.

On Monday, her ministry presented a report which found that the German army’s recent equipment and technical problems are largely the result of the defense ministry’s mismanagement of contractors, particularly on large projects.

The government fails to properly enforce delivery, cost and performance requirements with respect to the defense industry, the review also stated.

“This won’t be resolved in days or weeks but will last months.”

Ursula von der Leyen, German Defense Minister

The report, which Ms. von der Leyen commissioned, was prepared by auditors at KPMG, the engineering company P3 and the law firm Taylor Wessing.

In response the report, her ministry on Monday also outlined how it intended to change its approach to defense procurement.

The time for preferential treatment for German defense contractors is over, was the message. Ms. von der Leyen, a member of Chancellor Angela Merkel’s Christian Democrats, wants the industry to take responsibility when they fail to deliver often billion-euro equipment on time, or allow the costs to explode.

The ministry made it clear that going forward only a small part of the output of the domestic industry, which employs around 90,000 people in Germany, would be regarded as “key technologies,” and, therefore, indispensable. Other military equipment could as easily be purchased from other non-domestic suppliers.

The fact that economics minister, Sigmar Gabriel, leader of the Social Democrats, wants to set tougher parameters for weapons exports, means that many companies could soon struggle. Mr. Gabriel, who is deputy chancellor in the ruling left-right coalition, is to give a speech on Wednesday to outline his weapons policy. He had, therefore, asked Ms. von der Leyen to make clear which core capabilities need to continue to be manufactured at home from a military point of view.

Gutachten zur Bestandsaufnahme von Rüstungsprojekten übergeben
Defense Minister Ursuala von der Leyen wants to shake things up. Source: DPA

 

Her suggestions won’t please the industry. She did state that the reconnaissance technology and encryption technology are key technologies that absolutely need to be developed and manufactured in Germany – that is the lesson from the NSA scandal, according to government sources.

However, the minister did not make any commitment when it came to the manufacture of armored vehicles, submarines and small arms, areas in which German companies are global leaders. The classification is to be discussed with Mr. Gabriel and Foreign Minister Frank-Walter Steinmeier, also a member of the SPD.

The list of key technologies will likely have considerable influence on defense contractors’ long-term planning and investment decisions.

The industry was cautious in its reaction to Ms. von der Leyen’s plans. According to sources within the industry, the companies first need to assess the report and her recommendations.

The report was particularly critical of the way contracts are drawn up between the government and industry, which often are to the advantage of the defense companies.

The study recommended that the government ensure it had the same caliber of legal talent as industry to ensure that contracts between the two parties are on an equal footing.

Ms. von der Leyen, who had been regarded as a potential successor to Chancellor Merkel, will now be under pressure to deliver.

“This won’t be resolved in days or weeks but will last months,” Ms. von der Leyen said on Monday at the unveiling of the report.

Tobias Lindner, a defense expert for the Green party, said that Ms. von der Leyen now had to start making decisions. She should not “entrench herself in pending reports” any longer, “but rather, must now urgently begin to make decisions,” he said.

The defense minister might only have a limited time to set a new course, warned Rainer Arnold, defense spokesman for the SPD. “The era when problems could be blamed on her predecessors will soon be over. Then they will be her own mistakes.”

 

Silke Kersting is a Handelsblatt reporter based in Berlin where she reports on economics and politics. Till Hoppe is based in Berlin, where he reports on foreign policy. Siobhán Dowling is an editor with Handelsblatt Global Edition. To contact the authors: kersting@handelsblatt.com, hoppe@handelsblatt.com, dowling@handelsblatt.com.

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