COLOGNE, Germany – MBDA’s German branch said it will “restructure” its operations after signaling from Berlin that the government is considering the company’s pet project, the TLVS air defense system.
The move came after the European consortium MBDA and its American partner Lockheed Martin had hoped for years that their follow-up work on the former Medium Extended Air Defense System – which also included the USA, Germany and Italy – would eventually sign a contract with the German military or armed forces .
So far, the vendors themselves have invested some money in the effort, believing the system’s capabilities would revolutionize a Patriot-dominated global air defense market.
However, MBDA assumes that a contract will not be concluded next year, the company said in a statement. The statement also pointed out that Defense Minister Annegret Kramp-Karrenbauer had announced a reassessment of the entire air defense portfolio of the Bundeswehr.
Such reviews are usually indicators that governments want new thinking on a particular issue and are ready to discard longstanding plans. In the case of TLVS, Kramp-Karrenbauer’s recent focus on “layers” in missile defense, a common way of conceptualizing the technology, could mean the system no longer serves as a sweet spot in intercepting planes, missiles or drones at different heights and distances .
At the end of last month, lawmakers only included a token amount of EUR 2 million (USD 2.4 million) for TLVS in the defense budget for the next year. While there is an opportunity to add funds in the middle of the year, including some sort of bridge funding, until the Defense Department’s goals are clearer, companies see their prospects deteriorating.
It remains to be seen how the ministry would shape the story of the cancellation of a program that once stood as the flagship of German defense procurement reform. Officials started the program with the idea of delegating as much development risk as possible to the contractors at a fixed price. In combination with the gradual addition of new functional requirements such as hypersonic interception and lasers, this approach seemed untenable for both sides in the summer.