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M777 Howitzer Deal - Discussion and Updates

Discussion in 'Indian Army' started by bhagat, Feb 16, 2011.

  1. ArmChairGeneral

    ArmChairGeneral Lieutenant FULL MEMBER

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    Are you sure? IA had no Krasnopol rounds in 1999 Kargil war.
    IA tried the rounds later and found that this round is not effective in the mountains. It is designed for plains.

    The guns were used in direct firing role. In fact India could not hit Pakistan's gun positions (not having WLR, which were also acquired post-Kargil). The Mig-27 were sent to hit enemy's gun positions on the other side of the mountains, but were hit by SAMs.
     
  2. ArmChairGeneral

    ArmChairGeneral Lieutenant FULL MEMBER

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    I had a very animated discussion on Kargil on another board. India won the Kargil war, but this war also exposed serious shortcomings of IA. The war was concluded only by application of airpower (bombing by Mirage 2000).

    Today's war will be fought with technology. Our forces are still behind in technical sophistication.
     
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  3. ArmChairGeneral

    ArmChairGeneral Lieutenant FULL MEMBER

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    The problem is with the Army also. Why is it waiting for M777. Why it is unable to select a gun from many it has tried so far from other vendors.

    M777 cannot be all of its procurement.
     
  4. brahmos_ii

    brahmos_ii Major SENIOR MEMBER

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    BAE Systems will suspend production of the M777 howitzer unless it can quickly secure a long-talked about order from India for the lightweight 155mm weapon.

    The company said in a statement on Thursday that it had begun consulting staff and unions ahead of the suspension of production at its Barrow, England, facility because of continuing delays in negotiations with the Indian government over the sale of 145 guns.

    Up to 200 jobs are at risk at the Barrow site, where BAE also builds nuclear submarines and supports other artillery programs. Its Hattiesburg, Miss., site in the US, which undertakes final assembly and testing of the gun, is not immediately impacted, the BAE statement said.

    “The [Barrow] move comes about because of ongoing delays in the US government foreign military sale of M777 howitzers to India,” the company said.

    A letter of agreement (LoA) between the US and Indian governments for the sale of the towed 155mm weapons expired on Tuesday, triggering a rise in the ceiling price of the package of guns, training and support from US $647 million to $885 million. That price, though, is likely subject to some flexibility if the deal can be finalized quickly.

    Nobody is holding their breath for a quick deal. The major price escalation from the US government and BAE is likely to lead to further delay. In addition, India is gearing up for a general election.

    India hasn’t managed to buy any new howitzers since the 1980s’ purchase of weapons from Bofors — a deal that became embroiled in a huge corruption scandal involving financial kickbacks.

    A letter of request for the M777s was received from India in late 2012, and all trials and evaluations completed in January this year. The LoA has been in place since February.

    BAE ceased producing assemblies for new gun orders this year and has been investing its own cash, keeping the line alive with work on spares and various inventory items.

    But the company said that after months of its own investment, it can no longer maintain staffing levels. The artillery side of the Barrow facility employs around 350 people, the majority on the M777.

    The British-based defense contractor has been building the weapon since 2004, predominantly for the US Marines and Army. Over 1,000 guns have been ordered and the last of those weapons, destined for the Australian military, are being assembled at the company’s Hattiesburg.

    Barrow is responsible for the welding, machining and fabrication of specialized titanium items, such as the howitzer’s saddle and cradle. Final assembly and test of the M777 is undertaken by around 50 employees at Hattiesburg.

    BAE said the Hattiesburg facility is completing assembly of guns destined for the Australians and also resetting some weapons supplied to the US military.

    That work is expected to take the US side of the M777 operation through to around April next year.

    The announcement of the potential closure of the UK howitzer production site comes just 24 hours after BAE’s US arm said it was closing its Sealy, Texas, wheeled armored vehicle facility, with the loss of up to 325 jobs.

    BAE May Have to Suspend M777 Production in Barrow | Defense News | defensenews.com
     
  5. jonas

    jonas Captain SENIOR MEMBER

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    News October 17, 2013
    India loses out on arty buy as M-777 production ends
    The 37 percent escalation by a margin of roughly INR 1,200 crore for the US government offer to India for 145 M-777 light weight howitzers comes into effect on Tuesday, along with the imminent closure of the assembly line for the artillery.


    The Indian Army has once again lost out on an opportunity to acquire artillery as BAE systems begins the process of shutting down the production of its M-777 light weight howitzer.

    With the October 15 price hike and production closure deadline of the US government offer of 145 M-777 howitzers to India passing without any response from the defense ministry, any hopes of the army for acquisition of the light howitzers appear to be fading fast.

    The manufacturer BAE Systems informed some 350 workers on Thursday at its Barrow-in-Furness facility in the UK about the shutdown and the consequent job losses. The company has begun consultations with its employees and shut down of the facility is likely to be completed within 45 days.

    A statement solicited from the company quoted Managing Director and Chief Executive of its India operations, Dean McCumiskey, as saying, “We recognize that the discussions between the US Government and the Government of India for the Foreign Military Sale of 145 M777A2 LW155 howitzers to the Government of India have not concluded within the extended offer expiry date of Oct. 15, we are disappointed and are reflecting on its impact. In anticipation of a timely conclusion and to fulfill India’s requirements for early delivery (2014), we have been investing in maintaining the facilities, supply chain and workforce beyond feasible time frames since the issuance of the Letter of Acceptance in March this year. BAE Systems stands ready to continue to support any discussions between the two Governments to bring this case to conclusion, and remains committed to equip the Indian Army with next generation technology to meet their urgent operational requirements.”

    The company said in its statement that it would begin ‘consultation with trade unions and other employee representatives on the proposed suspension of the M777 howitzer production line at its Barrow facility which could potentially result in up to 200 job losses’.

    The company added that it could ‘no longer continue to maintain the current staffing levels’ after ‘on-going delays in the US Government Foreign Military Sale of 145 M777 howitzers to the Government of India’.

    The company, however, still says, “There could be some mitigation of the proposed suspension in production and potential reductions, if a formal agreement for the M777 howitzer sale to India was reached in the near future. However, the company has reached the point where it has to begin this consultation process.”

    The final integration of the howitzer is executed at the company’s Hattiesburg facility, in the US. However, work on the M-777 at this facility will only be impacted around six months from now.

    The October 15 deadline was also for the escalation of the price of the M-777 light weight howitzer, planned for acquisition by the Indian Army through a Foreign Military Sale (FMS) from the US government.

    As first reported by StratPost, the US Defense Security Cooperation Agency (DSCA) had notified the US Congress in the beginning of August, of an escalation in the price of the US government’s offer for 145 M-777 light weight artillery howitzers, manufactured by BAE Systems.

    This escalation was as much as 37 percent; from a January, 2010 price tag of USD 647 million to USD 885 million, or by margin of roughly INR 1,200 crore.

    Technically, the new price would have been effective from September 02, but the US government offered a final grace period in which the Indian government could come to a decision on the acquisition. This period ended on Tuesday.

    This 37 percent escalation is merely the hike in dollar terms. The defense ministry’s indecision also means that if India does take a decision on this acquisition at any point of time, it will also have to bear the cost of restarting the various assembly lines for the howitzer, which are in the process of shutting down in the absence of any other orders. What follows from the closure of the assembly line is also the shutting down of processes for production of specific components by lower tier manufacturers in the supply chain.

    Yesterday, once more

    This is not the first time this has happened. Before the plan for the procurement of 126 Medium Multi Role Combat Aircraft (MMRCA) was conceived, the defense ministry dithered over the acquisition of Mirage-2000 aircraft in addition to the 51 aircraft already acquired by the Indian Air Force (IAF), so much that French manufacturer Dassault could no longer keep the assembly line for the aircraft open.

    At this point it is difficult to quantify the burden the Indian taxpayer would have to bear for the restart of the production line, if the government does decide to place an order.

    With the Defense Acquisitions Council (DAC) failing to take up the procurement for consideration in its last meeting a month back just before the visit of US Deputy Secretary of Defense Ashton Carter to IndiaWhat Ashton Carter wants from India | StratPost, and no movement since, the acquisition itself appears open to question.

    This failure came after the US government informed the Indian government of the imminent price hike and shut down of production of the howitzer several times since the beginning of the year. With the US unwilling to pay to keep the assembly line alive indefinitely in the absence of any order and the inability of manufacturer BAE Systems to spend any more of its own money to keep workers on the rolls and the lines oiled, the ministry’s indecision could cost both the taxpayer and the Indian Army.

    The US government has already extended the validity of its offer per the Letter of Acceptance to India five times this year. The manufacturer BAE systems has put together a USD 209 million proposal to provide offsets against the potential order, for which it has submitted eight iterations to the defense ministry. By some estimates, the company has spent around USD 100 million over the past five years in pursuit of its commitments for trials and tests on the howitzer over the past five years.

    This comes at a time when the army is facing newer, more formidable challenges on the northern and eastern borders and comes after a series of intrusions by Chinese People’s Liberation Army (PLA) troops.

    The last time the army acquired artillery was in the 1980s with the order for the old Bofors FH77 B02 howitzer, aborted after the infamous corruption scandal. Recognizing the need for modernization, the Cabinet Committee on Security (CCS) approved the creation of a new Mountain Strike Corps in July, consisting of around 50,000 troops at an estimated cost of over USD 10 billion. Light artillery would be imperative for such a formation.

    http://www.stratpost.com/m-777-price-hiked-production-to-end
     
  6. vstol jockey

    vstol jockey Colonel MILITARY STRATEGIST

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    Maybe, our own bofors will be cleared soon. after that we won't need these american guns.
     
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  7. Marqueur

    Marqueur Peaceful Silence ELITE MEMBER

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  8. jonas

    jonas Captain SENIOR MEMBER

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    American guns ?? The M-777 is a UK designed and built weapon. The major components of which are still built in the UK and shipped to the US for final assembly for the US Army. I understand that is why the US was conducting these negotiations, pretty dumb really in my opinion. Why BAE UK could not have done this themselves I don't know, but it seems to have been another own goal for BAE as well as India.
     
  9. vstol jockey

    vstol jockey Colonel MILITARY STRATEGIST

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    FYI, same OFB has been making bofors barrels for over two decades now. This bursting of barrel cud be ofr many reasons not associated with OFB.
     
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  10. Soumya

    Soumya Major STAR MEMBER

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    Hurdles cleared for howitzer deal, but FinMin has no money

    The ministry of defence has cleared all hurdles to buy the M777 artillery guns for the army from the US.

    According to a top defence ministry official, the Defence Procurement Board (DPB) headed by defence secretary RK Mathur gave its green signal on Friday to go ahead with the deal to purchase 145 M777 ultra- light howitzers.

    India has not bought artillery guns since the Bofors deal in 1986.

    However, the final purchase of the M777 will take place only in the next financial year as there is hardly any money left with the defence ministry for the current financial year.

    Ministry officials told that, in October last year, the production line of BAE System, which manufactures M777 155 millimetre (mm)/39 calibre ultra-light howitzers, has shut down its production line in the UK, in the absence of any order or commitment from New Delhi.

    "Since India failed to give its final order, the Letter of Acceptance with the US expired. In the absence of any valid documents, South Block has to re-engage the US government, possibly to re-issue the contract," said an officer.

    The M777 guns are being bought from the US under the Foreign Military Sales (FMS) programme. Now, the US government will inform the ministry of defence about its ability to complete the demand in a given deadline.

    It was reported that after India failed to finalise the contract with BAE Systems, the company shut down its unit, which led to massive job cuts. Nearly 200 jobs were cut in its manufacturing plant in the UK in October last year.

    According to an army official, the M777 is essential for mountain warfare, especially for the newly created Mountain Strike Corps along the Sino-Indian border. Sources claimed that the army's 220 artillery regiments have received no new artillery since the 1980s, when the FH-77B, 155 mm/39 calibre Bofors gun were bought. Mired with the allegations of kickbacks, only 400 Bofors guns were delivered and the rest of the contract could not complete.

    Significantly, the Bofors guns played a key role in the Kargil operation in 1999 against Pakistani intruders.

    Also, the Ordnance Factory Board's effort to build a 155 mm/45 calibre indigenous gun is facing trouble after the gun barrel burst during its trials.

    Salient features of M777

    Used in Afghanistan by the US army
    It's a 155 mm, 39-calibre towed gun
    It's the world's first 155mm howitzer weighing less than 10,000 lbs (4,218 kg).

    Hurdles cleared for howitzer deal, but FinMin has no money | Latest News & Updates at DNAIndia.com
    It can fire 5 rounds per minute, its firing range is about 30 km maximum
    It has a digital fire control system
     
  11. The Drdo Guy

    The Drdo Guy Captain SENIOR MEMBER

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    chutiyon ki govt hai upa 2.koi decision logical nahi hota.They placed orders for 6 more super hercules but did not ordered the howitzer guns which are the need of hour.Now due to their decision we end up paying to reopen the production line and the same gun will be charged more...Idot congressi
     
  12. Ved Mishra

    Ved Mishra Lieutenant FULL MEMBER

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    If we could get Dhanush, M777 and Bharat 52 in numbers we will be having a great artillery. Seems like the next govt will have the privilege of having these inducted. 2014-19 will be game changer for indian military. INS Arihant will be operational, Rafale will be inducted, host of naval warships like INS Kolkata will be inducted, SR SAM, LR SAM will be fielded, Tejas MKII will be inducted etc etc. looks lie we will be busy in the next 5 years...:azn:
     
  13. JKA

    JKA BANNED BANNED

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    It is Bofors BAE defence branch.
    And Sweden sold to U.S. all, ho many(?) and then from U.S. to S.A. and India,
    only 3 nation's have Bofors BAE???
     
  14. JKA

    JKA BANNED BANNED

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    Sweden have artilleri system 08 Archer today of 24 or 48 pers.
    Near the same like Bofors weapon system.
    Big truck and guns.
     
  15. Anish

    Anish Lt. Colonel ELITE MEMBER

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    BAE’s US arm to shift Howitzer assembly here

    Ahead of US President Barack Obama’s visit to India, the US arm of the London-headquartered BAE Systems has offered to transfer its entire M777 155mm/39-calibre ultra lightweight Howitzer (ULH) assembly line from the US to India to revive the stalled sale of 145 guns to the Indian Army.

    The proposal had hit an impasse last year over offsets and price issues as it also involved direct import of the Howitzers from the US in a foreign military sales route (FMS) under the buy (global) category of the Indian Defense Procurement Procedure (DPP).

    The new offer is in line with Prime Minister Narendra Modi’s ‘Make in India’ initiative and will be on the agenda of delegation-level talks between the two sides. The gun has been extensively tested and evaluated in India previously. The proposal has been scrutinised in nine meetings of the Defense Acquisition Council (DAC) and eight versions of the offset proposals have been submitted to the Indian government for approval till October 2013.

    [​IMG]The US leader, during his meeting with Modi, is expected to pitch for scaling up India-US defense trade and push for Defense Trade and Technology Initiative (DTTI), which was launched in 2012 and 2013 by his new defense secretary-nominee Ashton B Carter.

    John Kelly, BAE System’s vice-president for business development and strategic planning platforms and services land systems and armament, who is spearheading the renewed campaign for sale of the M777 guns to India, confirmed: “We have offered to bring the gun’s assembly, integration and testing to India.”

    The proposal also involves increasing the indigenous component of the gun. But the quantity that India orders should be significantly larger for this offer to be more attractive. “If the quantity is higher, then we have more opportunity for indigenisation and that’s what we are working through at the moment,” he said. Last year in July, the then defence minister Arun Jaitley had told the Parliament, “The case for procurement of ultra-light howitzer guns through the US government has not progressed due to cost issues and because the vendor has not been able to come up with a proposal fully compliant to the offset requirements.”

    The ministry of defence (MoD) declared that the earlier offsets proposal from BAE Systems was non-compliant because the BAE Systems-owned US subsidiary, which manufactures the gun at Watervliet, New York, was not taking responsibility for the mandated 30 % offsets.

    The stalled proposal involved sister companies under the BAE Systems’ group umbrella for fulfilling the then $209 million offsets on behalf of BAE Systems, Hattiesburg, Mississippi. But the MoD insisted on offsets being implemented by the prime for the contract.

    The problem now seems to be resolved. “With regards to the possible Foreign Military Sale of the M777 Ultra-Lightweight Howitzers between the the two countries, the US government will contract with BAE Systems Global Combat Systems Limited and with other wholly owned subsidiaries of BAE Systems for the purposes of supporting our offset obligations,” a BAE Systems official later clarified.

    This suggests that under the fresh bid, BAE Systems Global Combat Systems will be the prime for the contract, which will actually be signed by the US Department of Defense (DoD). The US Department of Defence (DoD) which underwrites the deal with India, has also accepted the “clarifications” and BAE Systems has identified 40 Indian Offsets Partners with a wide geographical spread to execute the offsets obligations..

    The other problem over “cost issues” appears exaggerated due to a misunderstanding. The first offer, which stated a $697-million price, expired in October 2013. This necessitated the matter being referred to the US Congress for the second time for approval, which was done in August 2013. This Congressional notification provides a five-year validity to the offer, a BAE Systems official said.

    “The Congressional approval left a generous headroom by stipulating a price ceiling of $885 million. This was wrongly seen as the new price, which is unlikely to hit that ceiling. We’ll keep the price within the 6-8 % boundary,” said Kelly, suggesting a new price to be close to $750 million.

    The renewed offer to shift the assembly line to India involves Transfer of Technology to a chosen local partner, Kelly said. All local players, including the Ordnance Factory Board (OFB), could be considered. The technological challenge involves the use of Titanium. The FMS proposal does not envisage a joint venture, he said. Significantly, the gun barrel of the American gun cannot be made in India. This is barred by the Berry Amendment, a Congressional Act in the US.

    BAE’s US arm to shift Howitzer assembly here | The Financial Express
     

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