Identifier
Created
Classification
Origin
09MUNICH241
2009-09-21 07:47:00
CONFIDENTIAL
Consulate Munich
Cable title:  

BAVARIAN CALL TO ARMS - CSU DEFENDS GERMAN DEFENSE

Tags:  ETTC PGOV PINR MCAP PREL FR IT UK GM 
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C O N F I D E N T I A L SECTION 01 OF 02 MUNICH 000241 

SIPDIS

OSD POLICY FOR RICHARD DOTSON, CIA FOR MARY SANFORD

E.O. 12958: DECL: 09/21/2019
TAGS: ETTC PGOV PINR MCAP PREL FR IT UK GM
SUBJECT: BAVARIAN CALL TO ARMS - CSU DEFENDS GERMAN DEFENSE
INDUSTRY

Classified By: Consul General Conrad Tribble for reasons 1.4 (b) and (d
)

-------
SUMMARY
-------

C O N F I D E N T I A L SECTION 01 OF 02 MUNICH 000241

SIPDIS

OSD POLICY FOR RICHARD DOTSON, CIA FOR MARY SANFORD

E.O. 12958: DECL: 09/21/2019
TAGS: ETTC PGOV PINR MCAP PREL FR IT UK GM
SUBJECT: BAVARIAN CALL TO ARMS - CSU DEFENDS GERMAN DEFENSE
INDUSTRY

Classified By: Consul General Conrad Tribble for reasons 1.4 (b) and (d
)

--------------
SUMMARY
--------------


1. (C) The consolidation of the global defense industry will
affect Germany and Bavaria significantly, the Christian
Social Union (CSU),Germany's leading regional political
party, warned its members at a party congress on September 4
in Munich. Speakers mocked Germany's overly modest and
hide-bound support of its defense industry when it should
compete self-assured and bare-knuckled. To maintain, much
less increase, market share, Christian Schmidt (CSU),State
Secretary for Defense, and other leading CSU experts demanded
stronger and more coordinated efforts by the Chancellor to
promote the sale of German and Bavarian armaments and systems
worldwide. To remain competitive with France and the United
States especially, speakers said the German defense industry
must move beyond its obsession with producing only the best
and identify which products buyers really need and get them
from design to production more quickly. End Summary.

2 (C) The Christian Social Union convened its first
"Military Technical ("Wehrtechnischen") Congress" in Munich
on September 4 to discuss the prospects for growth and
prosperity of the defense-related industry in Bavaria and
Germany. 400 firms representing one-third of the 6.5 billion
euro German defense industry are situated in Bavaria or have
large subsidiaries here, including major players EADS,
Eurocopter, Kraus Maffai Wegmann (KMW),Rohde & Schwarz and
Diehl, and medium-sized companies like ESG or LFG. Presenters
included Peter Ramsauer (leader of the CSU caucus in the
Bundestag),Christian Schmidt (State Secretary in the Defence
Ministry),Georg Fahrenschon (Bavarian finance minister),
Werner Dornisch (president of the German society for defence
technology),and Martin Hauenschild (Director of bavAIRia, a
Bavarian marketing association focusing on the aerospace and

space cluster). Hans Raidel, member of the Bundestag (MdB),
was chair. Among the 100 participants were also local CSU
politicians, active and retired military officers, and
representatives of Bavarian defense industries. The Congress
was closed to the general public but Consulate General Munich
Political Chief attended on the invitation of the CSU
secretariat; the speakers were not aware that an American was
in the audience and the discussion was quite open and lively.

WAR IS THE FATHER OF INNOVATION
--------------


3. (C) State Secretary Schmidt acknowledged that the
defense industry was a critical component of Germany's
industrial and technological base, a major economic sector,
and an important inspiration for German industrial innovation
overall. To protect Germany's market share, he urged
manufacturers to become more flexible and responsive to the
needs of customers. The industry was "still operating based
on defense decisions made years ago, which were now
irrelevant," he charged, and he basically accused them of
elitism, since they offered "pricey, gold-plated products
("Goldrandloesungen")" that met the very highest standards
but were often too expensive or not really what the broad
market needed. The Eurocopter UH Tiger was an example, he
said, as it was designed to destroy tanks but in spite of the
more versatile French version deployed to Afghanistan in
July, the helicopter would have problems doing its job
fighting insurgents there. Schmidt insisted that the German
policy in the defense industry sector must become better
coordinated and he said the next governing coalition should
set up a special coordinating office in the Chancellor's
office.

GET OVER HISTORY - GERMANS SHOULD SUPPORT DEFENSE SECTOR
-------------- --------------


4. (C) Despite the importance of the defense sector,
Germans failed to appreciate its importance, several speakers
charged, and they bemoaned the fact that the German public

MUNICH 00000241 002 OF 002


still failed to support the export of military equipment, for
visceral historical reasons that were out of step with modern
Germany. High-ranking German politicians normally do not
lobby openly for German defense technology on trips abroad,
Werner Dornisch pointed out. In contrast, competitors like
France and America supported their defense sectors on a grand
scale at the official level. Lobbying for French products by
President Sarkozy was the prime example, seen recently in the
United Arab Emirates and in India. Schmidt urgued German
businesses to invest more outside Germany in order to gain
the upper hand in deals as the industry consolidated.

POLICITAL COMPETENCE SHOULD MATCH TECHNICAL COMPETENCE
-------------- --------------


5. (C) Schmidt said that political support of the defense
sector from the German federal government was anemic and
uncoordinated. Several Bavarian-based speakers added that
there was also no effective cooperation between the federal
and state governments. Lacking good political coordination,
the German defense industry suffered further because it was
privately organized at the industry level, Dornisch said.
Speakers charged Chancellor Merkel with doing German defense
industry a disfavor by not engaging more openly on major
international arms deals, such as the contest for India's
medium multirole combat aircraft (MMRCA). Fahrenschon,
Dornisch and Hauenschild noted that in the big European
cooperation programs, such as in the aeronautic and space
sectors, the Bavarian industries cried out for more political
support. Asking "what comes after Eurofighter," speakers
urged Germany to fight for a leadership position by
capitalizing on its reputation for competent production.
They warned that failing to do this, Germany could one day
find that advanced production was taking place in France,
Italy and UK, and German sites could end up with the
manufacture of minor and less complicated components.

--------------
COMMENT
--------------


6. (C) The CSU appears determined at the federal and state
level to move beyond German history and bureaucracy to
embrace strong marketing and political tactics to promote
German defense products as well as German leadership in a
very competitive global environment. Earlier this year, the
deployment of Bundeswehr Eurofighter jets to India, to take
part in a demonstration during in the Indian fighter jet
tender, met with much criticism in Germany. CSU speakers
openly admired French savoir faire in getting more than their
share of cooperation projects in European defense, where hard
national interests count first. The next Chancellor will
find concerted pressure from the junior partner CSU to model
Nicolas Sarkozy and do more at the level of the Chancellery
to support the defense industry, not least to keep Bavaria on
top as one of the major hubs of the defense industry in
Europe.
TRIBBLE