Canadian Defence Review

 

November 13th, 2012

 

Title: GDLS looks to new horizons

Subtitle:  With top notch capabilities, technology and a strong export base, the country’s largest defence contractor bills itself as “world class, word-wide and proudly Canadian.”  

 

Over the years Canada’s defence industry has developed cutting-edge technologies, installed the latest equipment and trained top experts. The sector’s leading contractors are thus now well-integrated into global supply chains, supplying software, composite structures and parts for production of many of the most advanced military products. However few can supply end-to-end capabilities.

 

General Dynamics Land Systems does. “We are one of the rare Canadian companies that are simultaneously platform providers, systems integrators, developers and owners of intellectual property,” says Danny Deep, the company’s vice-president. “In short, we supply key integrated capabilities and are increasingly recognized for that.”

 

A quick tour of General Dynamics Land Systems’ London operations confirms Deep’s assessment. The massive facilities, home to the bulk of the company’s 2,400 employees, house huge production, research and development and sustainment capabilities. These include central offices where support tasks such as accounting, marketing, IT and others are housed, where staff coordinates activities with a global customer base and a cross-country network of close to 500 Canadian suppliers.

 

However General Dynamics Land Systems is not resting on its laurels. The company’s order book is sufficiently stocked to keep production lines running at their current pace for the coming two years. However potential cuts are looming in upcoming US budget negotiations and ensuing cycles. These have spurred company officials to spread their wings. “We are increasingly looking at opportunities in non-traditional export markets,” said Deep. “If our efforts play out as expected, we will be in a solid position going forward.”

 

Sustainment capabilities: LAV III upgrade picks up speed

One good way to assess General Dynamics Land Systems’ capabilities is to look at its latest initiatives, the most recent of which has been ongoing work on the LAV III (light armored vehicle) upgrade program which the company won in late 2011. This $1 billion contract consists of a rebuild of significant elements in the 550 vehicle fleet (including turreted and non-turreted variants), which has become a backbone of Canadian land forces. The upgrades, which will extend the LAV III’s lifespan to 2035 and enhance survivability, mobility and firepower, will involve extensive modifications including installation of a powerful engine, robust driveline, new suspension and major turret improvements.

 

The win was not a complete surprise says Deep, as General Dynamics Land Systems, was the original developer of the LAV III variant a decade and a half ago. The company was thus in an excellent position to advise officials about the most promising improvement options.

“We are not just a Canadian branch plant,” explains Deep. “We own much of the technology we incorporate into product designs. That means we don’t have to ask for permission if we want to further improve the platform.” The LAV III upgrade program is currently in its initial phases says Deep. The first two units to be upgraded during the first production phase, are scheduled to be delivered on schedule in December and the entire program completed by 2017.

Full lifecycle support

Indeed General Dynamics Land Systems sustainment services are one of the company’s primary capabilities, says John Ball, a director (sustainment services) at the London operation. “These are combat vehicles and they undergo immense stress,” says Ball. “To help support them we have set up significant infrastructure to repair, maintain and overhaul these units, wherever they are located. We do this using both our personnel and in conjunction with other defence department assets, which provide most of the first and second line services.”

As part of General Dynamics Land Systems’ Optimized Weapons Systems Support (OWSS) program, the company has committed to handle fleet management services for the LAV IIIs, as well as to supply technical and engineering support and project management to DND. The sustainment service unit alone employs 400 professionals and another 150 which are deployed in the field around world, embedded in client countries such as the US, Kuwait, Egypt, Afghanistan and the Kingdom’s of Saudi Arabia and Morocco. Key to that mandate are the company’s Edmonton operations, which were recently assigned the mandate to overhaul 60 LAVs, an initiative that is expected to help maintain more than 100 jobs there.

Sustainment services also include an important training element says Ball, to help teach users (and defence department trainers, who provide similar services) how to accurately diagnose and make repairs in an out of the combat zone.

Piranha teaming

Another good example of the capabilities that General Dynamics Land Systems expects to leverage in coming years relate to its proposal to the Department of National Defence that its Piranha 5 fill the Close Combat Vehicle (CCV) role in its fleet. The Piranha 5, which is based on technology developed by MOWAG, another member of the General Dynamics family, is the largest member of the LAV line.

The Close Combat Vehicle, one of four Department of National Defence land vehicle procurement initiatives, is designed to ride in support of tank units. Under the GDLS proposal, these vehicles, would be equipped with Rheinmetall’s Lance 30mm turret, as well as air burst and hunter sight capabilities. If selected, they would be a natural fit to be produced in the company’s London plant, which already has much of the required infrastructure in place.

TACOM contract

General Dynamics Land Systems’s win of a $126 million contract to supply the U.S. Army’s TACOM Life Cycle Management Command with 73 LAV IIs was another important feather in its cap, which highlights the company’s strong links with the US military. The vehicles in the deal, arranged through the federal government’s Canada Commercial Corporation, will have 300 horsepower and an eight-wheel drive. Six different configurations will be produced.

 

A long-time major player

It should not be too surprising that company with the breadth and scope of General Dynamics Land Systems should have a long and illustrious history behind it. The company began its life as a General Motors unit known as Diesel Division General Motors of Canada (DDGM), which specialized in the manufacture of locomotives, buses and mining equipment. The division moved into light armored vehicle production in the 1970s after Switzerland-based MOWAG licensed it to produce its Piranha 6x6 vehicle (a cousin of the Piranha variant being proposed for the CCV program) for the Canadian Armed Forces.

 

In the early 2000s, the unit formed a joint-venture with General Dynamics, which took full ownership in 2003. That said, it’s hard to overstate the company’s importance to Canadian Armed Forces soldiers on the ground, who over years have ridden in a slew of GDLS vehicles ranging from the Bison and Coyote, to the LAV III and Piranha versions noted above, in deployments ranging from Afghanistan to Kosovo and many others.

 

However ironically, General Dynamics Land System’s notoriety is even greater in the United States than in Canada. In 2001 the company was awarded a contract to produce a LAV III variant for a US army initiative known as the Stryker Program. More than 4,500 of these units have since been delivered, close to half of the 9,000 the company has produced since its inception.

 

Engineering: value-added Canadian intellectual property

A tour of General Dynamics Land System’s London facilities highlights its state-of-the-art production equipment and highly productive workforce running the latest laser-guided cutters, robots and other assembly technologies. It’s a great example of Canadian (and more specifically Southern Ontario’s) manufacturing prowess.

 

However according to Deep, merely looking at production clout greatly understates the company’s capabilities. “We are much more than just a production facility,” says Deep. “We are intensively driven by innovation. Many people don’t realize that we employ more engineers (700 worldwide, including 100 in London alone) than front-line production personnel.”

 

Gil Camirand, manager (product & technology development) agrees.  “(General Dynamic Land Systems) attracts top engineers, technologists and technicians across all levels,” says Camirand. “There is an excellent network of local universities and trade schools in the area for us to draw on. These include the Univesity of Western Ontario and the Fanshawe College of Applied Arts and Technologies, which supply more than half of our new recruits.” Once there, GDLS keeps them busy in areas ranging from vehicle survivability, to mobility, digital architecture and weapons integration. This has led to numerous success stories over the years.

 

A locally designed turret system

For example General Dynamics Land Systems designed the 25 mm turret that will be incorporated into the LAV III upgrade. The upgraded system will be both increasingly lethal and robust. It will also include significant new capabilities ranging from an enhanced fire control and sighting system, to a new day camera, image intensifier and assorted displays. The human element, which experts are increasingly emphasizing, was also addressed. Significant enhancements were made to the vehicle on the ergonomics front, to make it more comfortable, easier and effective for users to operate.

 

The double –V shaped hull

Another excellent example of General Dynamics Land Systems engineering prowess relates to its development and introduction of a “double V-hull” technology on the LAV upgrade, which was designed and invented at the company’s London offices, to counter the threats that Western forces in Afghanistan and Iraq were facing from Improvised Explosive Devices.

 

The initial hull solution to counter IEDs was the V-shaped variant which deflected explosive blasts to the sides of the vehicles instead of straight up. Yet although the designs were effective, to fit in a V-shaped hull, the vehicle chassis had to be raised too high off the ground. This both affected stability and provided opposing forces with a larger target.

 

General Dynamics Land Systems  researchers looked at number of alternatives. According to Camirand specialists conducted close to 18,000 simulation trials before the double-V design was judged to be the most effective. These trials were not a one-shot deal. Indeed General Dynamics Land Systems has developed significant simulation competencies to assess how vehicles will perform on the battlefront, even before they are sent there. These include substantial test facilities both on site, and in combat-type areas.

 

A significant economic impact

While GDLS’s work on the LAV III upgrade and other DND initiatives is highly visible and tends to attract the most attention, these are only the tip of the iceberg. Company officiates estimate that sales since inception exceed $17 billion ($4 billion domestically and $13 billion internationally), and have created close to 500,000 person hours of work. When economic spin-offs are included the company’s total economic impact has been estimated at close to $50 billion.

 

That said, those export volumes are particularly important. Close to 80 percent of the company’s work is done on vehicles which end up elsewhere, particularly in the United States. These programs add tremendous value not only to the London-area, Ontario and Canadian economies, but also to the defence sector as a whole, in the sense that they provide Canada with significant capabilities, which are paid for in part, by out-of-country clients.

 

That said, the future of this lucrative added-value to the Canadian economy and its defence structure is less clear, notably in the wake of tightening budgets in key markets, particularly the United States. One worry is the US Congressional “fiscal cliff,” deal between Democrats and Republicans which calls for massive $600 billion in defence cuts over the coming ten years, if the two parties cannot come up with a long-term deficit cutting package by January 1rst.

 

Few expect the provisions to actually be implemented, however the warning is clear: US budget cuts are on the way. The drawdowns from Afghanistan and Iraq alone are substantially reducing America’s international defence posture and hardware demand will surely be affected. “In general terms our traditional markets are depressed,” admits Deep. “However to compensate, we have significantly opened the aperture in terms of new markets that we are looking at in both the Middle East and South America.”

 

Formal recognition in the cards?

That said, General Dynamics Land Systems officials recognize that the company’s future depends in large part on developments here. “GDLS does not exist if the Canadian government had not been our first customer for our first products,” says Deep. “And that relationship continues to this day.” The big question right now is how that relationship will evolve in the wake of ongoing revisions in federal government’s procurement process.

 

Earlier this year, Public Works and Government Services Canada minister Rona Ambrose appointed Tom Jenkins, as a special advisor on defence procurement. Jenkins, CEO of Open Text, is to develop an integrated plan that will help Ottawa identify key industrial capabilities, streamline purchases and increase job opportunities in defence-related industries.

 

Key to the new initiative is a policy shift that will consist of diverting a larger share of the $240 billion in projected procurements over the coming 20 years, to Canadian suppliers. Deep is highly optimistic about the new initiative. “The Canadian government has been very supportive, quite frankly under the current administration,” notes Deep. “That applies to elected officials, DND personnel, Department of Foreign Affairs and International Trade (DFAIT) and so on. The help they have provided has applied to both our domestic initiatives and in our efforts to compete internationally.”

 

Deep is right to be optimistic. Because if any company represents a key industrial capability to Canada, then surely General Dynamics Land Systems fits the bill. Not only is it the country’s largest defence contractor; its profile as a major platform provider/exporter, systems integrator and intellectual property owner/developer, consistently make it one of (if not the) most important. 

 

Recognizing this formally in the upcoming defence sector review would seem like an obvious step. What opportunities that would open down the road though is anyone’s guess.

 

****

 

Highlight these quotes in separate text boxes:

 

 

“We are not just a Canadian branch plant. We own much of the technology we incorporate into product designs. That means we don’t have to ask for permission if we want to further improve the platform.”

 

“We have significantly opened the aperture in terms of new markets that we are looking at in both the Middle East and South America.”

 

“GDLS does not exist if the Canadian government had not been our first customer for our first products. That relationship continues to this day.”

 

Danny Deep, vice-president, General Dynamics Land Systems.

 

Sidebar: Quick facts

 

Name: General Dynamics Land Systems (Canada)

Parent company name/information: General Dynamics

Key contacts: Ken Yamashita

Products: Light armored platforms, sub-systems integration, upgrades, repair services, full fleet support

Phone: 519-964-5813

Web-site: http://www.gdlscanada.com/

Locations (Canada): London, Edmonton (sustainment services)

Export profile: 80% of production targets foreign markets including the US, The Kingdom of Saudi Arabia, New Zealand and Australia

Number of employees: 2,400, including 700 engineers

 

 

peter@peterdiekmeyer.com

 

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