Sunday, February 12, 2012

Hits and misses by the Singapore defence industry

Every two years, the Singaporean defence industry brings out its latest gizmos to wow the world. That time will come again when the Singapore Airshow throws open its doors to trade visitors on Tuesday.

While the shop window has undoubtedly generated impressive public relations (PR) mileage at successive editions of Asian Aerospace and two editions of the Singapore Airshow since 2008, defence watchers might do well keeping track of what's missing from the line up.

Absent war machines and products/services quietly dropped from glossy marketing brochures tell a story of missed opportunities by Singapore's defence industry. To be sure, the missing war machines also tell a story of progress: upgraded A-4 Skyhawks giving way to souped-up F-5s, with Unmanned Aerial Vehicles coming out of the woodwork this century. Faithful visitors to the Lion City's airshows would have noted the capability leaps.

For a city-state that has constantly banged on the self-reliance drum, missed opportunities in the area of defence technology are indicative of a corporate mindset that sometimes needs to be prodded to realise that the Singaporean Ministry of Defence (MINDEF) and Singapore Armed Forces (SAF) do not owe the local defence industry a living.

Our reputation for thoroughness and straight dealing may have earned us the moniker of "reference customer" from the world's defence press. But taken to the extreme, an obsession with paperwork may result in our local guys missing the forest for the trees and compromising the SAF by making weapons purchases more bureaucratic than they ought to be.

Beyond all the smiles and handshakes, the clinking glasses on the cocktail circuit, Singaporeans must realise that our defence industry has a somewhat shady reputation among weapons makers. If you get the chance at SA2012, speak to old Singapore hands privately and listen to what they have to share. Unless we calibrate our industrial relations well, there is a high risk that this island will someday be lumped into the same category as weapons industry pariahs than nobody wants to work with, sell to or rub shoulders with.

If you check the Business Times archive, you will realise that I was an early advocate for the merger of four Singapore Technologies companies to form Singapore Technologies Engineering (ST Engg).

We needed critical mass at a time when the world's defence industry was undergoing a post-Cold War restructuring. Consolidation to protect market share and preserve earnings growth was the name of the game. A comparison between participants at early Asian Aerospace airshows and companies listed in the SA2012 directory will reveal many legacy companies that have faded into history. The likes of Aerospatiale, British Aerospace, General Dynamics, Grumman, Hughes, Martin Marietta, Northrop, Westland and so on are no longer standalone companies. They exist under new corporate banners, having merged with partners and erstwhile rivals to form defence heavyweights.

So having ST Engg command four major business units (BUs), viz ST Aerospace, ST Automotive (now ST Kinetics), ST Electronics and ST Marine, made perfect sense from a business perspective. The combined strengths of these BUs outweighed the impact each BU could exert individually. Synergy was the buzzword. It looked like a great game plan - at least on paper.

My sentiments changed the deeper I probed.

Accounts of BUs fighting (needlessly) over who pays for floor space booked at the airshow were just the tip of the iceberg. At a grand strategic level, the promise to shareholders of growing ST Engg 10 times in 10 years made a nice newspaper story but, alas, never materialised.

LongShot glide bomb kit
Defence watchers may recall the LongShot glide bomb kit displayed at the ST Engg pavilion during Asian Aerospace 2002. Where is LongShot now?

Word has it that while we quibbled with the American designer over rights to his design, which gives dumb bombs a longer range with strapped-on wings, someone else marched in and plonked serious money on the table to buy the design. According to industry gossip, an asking fee for Singapore that totaled several million US dollars was eventually eclipsed by the other party which offered more than twice the price. The US designer must have laughed all the way to the bank. Good for him. This is entrepreneurship at its best.

Because of our penny-pinching bureaucratic mindset, Singapore lost a golden opportunity at buying over an innovative design that could have sharpened the combat edge of Republic of Singapore Air Force (RSAF) pilots and weapon systems officers. We had a first-mover advantage but ended up the loser when we let LongShot slip from our grasp.

Bronco deal
ST Engg's desire to reach out to partners has rubbed some companies the wrong way. Indeed, some never want to work with Singapore again. In an industry which is as gossipy as the arms trade, this sort of notoriety travels far and wide.

A case in point is the Bronco all-terrain tracked vehicle. The inspiration behind this home-grown vehicle's design was disputed by Swedish defence firm, Hagglunds, which sued our defence industry some years ago. The case was settled amicably and went largely unreported by defence journalists. But the loss of goodwill with the Swedish land weapons maker (now under the BAE Systems umbrella) is something money cannot repair.

In 2001, when I attended the IDEX defence show in Abu Dhabi as part of a press junket, I learned firsthand the extent of the hostility discomfort towards the Singapore weapons industry brand. As my trip was sponsored by an ST company, the host kindly assisted with visitor registration. A bureaucratic mix up resulted in the IDEX organiser issuing me a trade pass that said I belonged to the ST company.

The Arab gate guards at IDEX were as easy-going as they come and fanned me in despite my insistence on getting the error corrected.(This was several months before 9/11)

When I got to the booth of a Belgian small arms maker, which in that year was selling a new bullpup assault rifle, the folks on duty took one look at my badge and said I wasn't welcome. If you know me well, you'll realise I'm not the sort who walks away from this sort of situation without getting a good answer. To cut a long story short, the explanation by the small arms maker made me look at our defence industry from the perspective of a foreign partner who wanted to do business and got more than they bargained for.(Convinced of my bona fide, they eventually let me tour the stand, stay as long as I wanted and explained the rifle in some detail. That's European hospitality for you.)

Many of the things Singapore's defence industry has put in its shop window would not have seen the light of day without foreign assistance. We have cultivated strong partnerships worldwide and should be thankful for the assistance people have rendered to Singapore.

We've done good in many areas. Our Bionix and Terrex family of armoured vehicles have made foreign armies sit up and take notice of tiny Singapore - despite the SAF's lack of wartime experience. Even without a national automobile, we have a "national" armoured vehicle in the form of the BX. It is something Singaporeans can be rightly proud of.

The value of humility
As much as we would like to play up our self-reliant attitude, we must learn to eat humble pie and treat our foreign partners in a way we ourselves would like to be treated.

At times, our young staff officers let their pride get to their head. The story of a young punk staff officer from Singapore's defence eco-system talking down their opposite number - some of whom have spent more time in a combat zone than these fresh graduates have clocked in the working world - is so numerous and varied that it isn't funny anymore. Defence contractors from Europe, the Americas and Asia have their own version of the story to tell.

When smarty pants is engaged outside his or her comfort zone of their pet MINDEF/SAF Project, defence contractors quickly realise these youngsters actually know precious little about military technology or, god forbid, military history and tactics. They can talk your ear off about the widget they have been tasked to look after, but steer the conversation into the history of war and what-if scenarios for (insert your favourite battle, general or war machine) and smarty pants becomes clueless.

The high-and-mighty attitude, bordering on sheer arrogance, which is the business communications ethic adopted by some of our young, fresh out of school, promotion by default staff officers makes some foreign contractors feel that they should grovel for our multi-million dollar contracts. Is this the kind of world-class reputation we want to cultivate? Mind you, they have long memories and are unlikely to forget the lack of social graces.

The Singaporean staff officers (SOs) may be as young as the defence contractor's children, but this isn't about respect for our elders. It is about extending a professional courtesy to a fellow defence professional, many of whom were former military and earned their stripes the hard way. Sadly, some of our SOs behave just like one.

Still on people management, a quick word on talent management. ST Engg should treasure its weapons engineers as they are the core of our country's competence in defence technology. Let's not talk about the annual Defence Technology Prize. Let's focus on the day-to-day grind many ST Engg staff have to endure. On many occasions, hapless ST Engg staff get the short end of the stick whenever MINDEF/SAF, the Defence Science & Technology Agency (DSTA) and ST Engg lock horns over a project.

Assimilating foreign defence technology through joint ventures, collaborative arrangements, M&A, MOUs etc helps Singapore leapfrog the development cycle for defence products. But doing so at the cost of nurturing a local talent pool of engineers will steadily erode Singapore's defence engineering base.

In some ways, the tech erosion has already started, no thanks to cut throat rivalry from defence companies more business savvy, more experienced and more driven than our own.

Ask yourself what happened to our capability to manufacture and market fuzes for infantry support weapons such as mortar bombs. We used to make these in-country as it was a strategic advantage for Singapore to have this sort of defence know-how. It took a fatal explosion in an FH-2000 155mm gun to reveal that artillery fuzes were bought from overseas (the faulty fuze was provided by a US-based company but actually Made in China).

We surrendered our production of 5.56mm small arms ammunition, arguing that bullets have become a commodity product that can be stockpiled more economically. That's a budget-friendly answer. But what happens if that stockpile is compromised during a period of tension? Would a local production capability not have a sterner deterrent value?

One could go on and on spinning yarns about ST Engg at the risk of straying into Official Secrets Act (OSA) territory. So I'd better stop here as the point has been made: The Singaporean defence industry has achieved much in nearly half a century but must steer astutely through the cut throat world of arms sales as it has many skeletons in the closet.

You may hear stories of your own at SA2012. For me, the cocktail circuit with gossipy defence industry types starts... tonight!

11 comments:

Sgcynic said...

Another example
MINDEF being sued over alleged patent infringement
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1181539/1/.html

Anonymous said...

It's not just local defence industry men or MINDEF men who exhibit that smarty pants, talk down/arrogant behaviour. They are symptomatic of Singaporeans in general, if one is willing to self reflect. For instance, Hong Kongers have long found Singaporeans to be arrogant and Malaysians have long complained of being looked down upon. While Singaporeans can be justifiably proud of the nation's numerous achievements, accompanying humility generates even more respect from others.

Anonymous said...

the arrogance stem from a frog in a well, ai-pi-ai-chi mentality. we got the tech, we got the people, but we don't have the eq to deal with the world.

perhaps is also due to the mindef-st relationship. it is too comfortable for them. look at st mgmt and see how many ret. BGs are there.

Anonymous said...

Ahhh, the stories that one could tell about this, especially from those who have been around in the service or in the related industries can easily fill several volumes of nasty stories about the Singaporean Military-Industrial Complex.

Part of the reason why the local defence industry has such a bad rep is could be because not only is IP rights not respected (local companies are also victims and perpetrators), but there is a tendency for locally developed weapon systems to show up in the wrong hands or places. (http://cjchivers.com/post/17247144974/following-up-the-sar-80-a-rifle-and-an-arms-trade)

Anonymous said...

Not just in ST Engg, but the entire "amakudairi" system has basically institutionalized itself in the Civil Service-TH-GIC-GLCs network.

David Boey said...

Hi Anonymous (above 13 Feb 12:44 AM),
Ironic situation 1
The irony of the story about the errant SAR-80 5.56mm assault rifles is that our SAF visit, board, search and seizure teams sent to the Gulf of Aden may one day end up looking at this Singapore-made product from the business end of the rifle.

Ironic situation 2
This may sound funny to some of you but my present company bought the building which Unicorn International operated from years ago. We're at 3 Lim Teck Kim Road. It's now called Genting Centre and my current office is also here. Isn't life wonderful?

I often wonder what sort of conversations took place in some of the rooms in this building. If only walls could talk...

Huat Ah!

Warm regards,


David

Anonymous said...

Longshot was bought over by Lockheed Martin and used as a range extension kit for torpedoes.

http://www.defenseindustrydaily.com/longshot-a-swooping-haawc-for-torpedos-03340/

Anonymous said...

Hi David, regarding your anecdote about that Belgian smallarms maker (no prizes for guessing their name, there is only one... :D), I guess they are still quite sore over unlicensed production of one of their designs by STK, and seeing how their new bullpup was in competition with the SAR-21, it's understandable how they initially received you...

-Previous Anon referencing SAR-80...

Anonymous said...

It seems longshot China and Israel clones/look-a-likes too

David Boey said...

Hi,
This example indicates how foreign companies pass on their corporate lessons. Our circle of friends will keep shrinking if we keep this up.

Best regards,


David

Anonymous said...

What Belgian stuff were we producing without license? Any hints, anyone? :P