Ursula von der Leyen likes to smile, especially when she is under pressure to win support for her policies.
Germany’s defense minister looked serious, though, as she announced that she saw “no future” for the G36 assault rifle, in a closed appearance in the German parliament, the Bundestag.
“This weapon, as it’s constructed now, has no future with the Bundeswehr,” she said.
Heckler & Koch has supplied 178,000 G36 assault rifles to the Bundeswehr, the German military, since 1996. The government says the weapon, which is made of plastic, is inaccurate when it gets hot.
Initially, Ms. von der Leyen said nothing about an alternative to the rifle.
She faced tough questions about agreements made during her predecessors’ terms in office, Ms. von der Leyen also had some explaining to do.
The defense minister is fighting to uphold her image, with both the parliament and the public, as someone who cleans house. She has promised to energetically clean up her ministry, which is widely perceived as a hugely difficult task.
Ms. von der Leyen already had outside experts investigate the 15 largest defense projects, because she didn’t trust her own people. Now she aims to examine joint ventures with the private sector.
“For the Bundeswehr, the abbreviation PPP for public-private partnership has too often stood for pay-pay-pay.”
Handelsblatt has learned from ministry insiders that Katrin Suder, state secretary in the Defense Ministry, has hired independent auditors to thoroughly investigate the ministry’s public-private partnerships.
The state-owned consulting firm ÖPP Deutschland, the international management firm McKinsey and a group of internal advisors are expected to devise a new, more sustainable strategy for the military’s vehicle fleet, maintenance and clothing companies with combined revenues of €580 million, or $620 million.
The cleanup campaign was triggered by the expensive, near-bankruptcy of LHBw, an apparel company that supplies soldiers with uniforms, boots and underwear. At the end of June, the federal government will completely take over the company, currently 74.9-percent owned by the partner companies, Lion Apparel and Hellmann Worldwide Logistics. After a failed effort to expand abroad and serious mismanagement, LHBw is now in need of a bailout.
Video:The G36 assault rifle is manufactured by Heckler & Koch.
The acquisition will cost the government between €55 million and €60 million, possibly even more.
The case symbolizes the partial failure of a large-scale experiment launched by Ms. von der Leyen’s predecessor Rudolf Scharping in 2002. Mr. Scharping, a member of the center-left Social Democratic Party, was trying to save money by outsourcing tasks that were not part of the Bundeswehr’s core mission to privately held service providers.
The concept of public-private partnerships in the German defense ministry, conceived by the Roland Berger consulting firm, was intended to save up to €2 billion a year.
The concept of public-private partnerships in the German defense ministry was intended to save up to €2 billion a year.
But most of the new companies failed to deliver any sufficient savings. In fact, some projects, such as the Herkules IT project with Siemens and IBM, saw costs go up considerably. Today the says:
“For the Bundeswehr, the abbreviation PPP for public-private partnership has too often stood for pay-pay-pay,” said Hans-Peter Bartels, chairman of the Bundestag’s defense committee and a member of the Social Democrats, the junior party in Germany’s coalition government.
Ministry officials are also critical of the results of the privatization program. They point to a number of unachieved goals and a lack of effective control mechanisms on the part of the federal government, as well as concrete qualification requirements for the companies’ managers and supervisory board members.
“Under Scharping, the ministry established holding companies, but then they were neglected by all subsequent ministers,” said Green Party budget expert Tobias Lindner.
Ms. von der Leyen wants to abandon this unfortunate tradition, along with many others in her ministry.
Her legacy as defense minister will depend on whether she can actually deliver on this promise.
Till Hoppe covers security and defense policy for Handelsblatt in Berlin. To contact the author: email@example.com