Nick Ames, the chief executive of Supacat, discusses the company’s growing product line of high-mobility manned and unmanned land vehicles and Britain’s defense industrial strategy with Defense & Aerospace Report Editor Vago Muradian a the DSEI 2019 conference and tradeshow in London. Our coverage was sponsored by L3Harris and Leonardo DRS, in partnership with DSEI organizer Clarion Events and working with the UK Department of International Trade’s Defence & Security Organisation to bring you the best of British defense and security.
Vago Muradian: Welcome to the Defense and Aerospace Report. I’m Vago Muradian here at the Excel Center in London where we’re covering this 20th anniversary edition of DSEI, one of the world’s truly great defense and security exhibitions. Our coverage here is sponsored by L3Harris and Leonardo DRS, and we’re also partnered with Clarion Events, the organizer of this great exhibition and many others around the world. And we’re working with the UK Department of International Trade, Defence and Security Organization to bring you the very best in British defense and security.
We’re here to talk to Nick Ames, a good friend over the years, the Chief Executive of Supacat, one of those innovative British companies that were absolutely decisive, especially in Iraq and Afghanistan campaigns but continues to be an innovator in the space. Nick, good seeing you again.
Talk to us about what’s new in the Supacat zoo since last we spoke.
Nick Ames: Well we’ve kept moving, I’m sure you’ll be pleased to hear that. We’re still exporting the main product line. Just coming to the end of our Norwegian production line for the Norwegian Special Forces. A key customer to add to the base.
This is our newly revamped Light Role Vehicle, we’re very pleased with that. Not yet got into service, but we think it’s world class, very strategic in the way that it fits inside a Chinook helicopter.
Then further on at the back of the stand this year we’ve got our working two electric vehicles, that we’re taking our first vehicle ever, the ATMP, served in both Gulf Wars, served in Afghanistan and is now being made electric. So we’re very pleased with that. And also with the work that’s going on to make that autonomous or shall we say optionally manned. Both of those last bits of work being done under a Knowledge Transfer Partnership which is a UK government initiative to try and make universities and industry work better together. So we’ve seconded a student from Exeter University to come and work with us. It’s worked very well. We’re very pleased.
Muradian: You guys also are a very important global supplier, supplying to Norway, Australia, elsewhere in the world. Bring us up to speed on the international efforts, because you guys have been working those intensively for years.
Ames: you’re right. We’ve got several customers around the world now, we’re very proud of those and we work hard to make sure that they’re properly supported either from our base in Devon, in Southwest England; or in the case of Australia and New Zealand, from our [constituary] company in Australia. And I’m pleased to say that that company in Australia is now doing some great work for Rheinmetall on the Land 400 program in terms of bringing the Australian content and the Australian standard into that program as it comes on-shore to Australia. So that’s a very nice little piece of diversification for our business out there. And we’d like to see them continue to grow and develop and also continue with the export theme of the HMT product into the Asia Pacific region. So it’s busy across the group. Not always easy, but it’s busy.
Muradian: It’s like hey, if there was ever a dull moment, you know, what’s the point of that?
Talk to us about the LRV and what’s new about it and why you guys think it’s the right vehicle at the right time.
Ames: This is the Light Role Vehicle. The unique aspect of this vehicle is the ability to fit inside a Chinook, even if the Chinook has been armored so the width is critical.
Muradian: And weight is critical.
Ames: And weight is critical. So those are the key design constraints. But then I’m pleased to say everything else we’ve sustained the sort of mobility that you would expect to see off any Supacat platform. So the mobility, you can still come from the direction, the way your enemy would not ever think you could come from in this vehicle.
It’s a junior version of the HMT, for sure, but it fits in a very specific niche and operates to all the same standards as you have grown to know and love from us over the years.
Muradian: Every time I see your vehicles, by the way, I think it channels the total original SAS, you know there’s a great picture of them in the Libyan desert, sitting in the vehicle. I always have a sense that you guys are sort of the genetic heir of that.
Let me ask you an industrial question. You guys are a British contractor, proud to be a British contractor. We’re at a time now when obviously Brexit has sort of, it’s Global Britain, but also an increased focus on how do we support local industries. Britain has always talked about that but ultimately most of its most important equipment it goes overseas to buy. If you look at the Boxer vehicle. It’s a great vehicle, but it’s a Dutch/German vehicle by Rheinmetall at the end of the day. P-8 Poseidon is an American jet. F-35 is an American program on which Britain has been a key partner. And currency exchange rates are utterly killing the UK at this point. I think senior leaders, we talked to Anne-Marie Trevelyan, Minister for Defence Procurement. She told what the government’s position is on that, that it’s going to be temporary and there are hedges and things like that.
At the end of the day there are those who say that it’s actually time for Britain to buy more from its own national suppliers, given that it also has a currency advantage when she does that. Minister Trevelyan did talk a little bit about that is the intent of the government, to actually do that.
Do you get any extra points for being not just charming and have good engineering, but actually have a fully British product? Is there any way that you guys are rewarded for that fundamental element?
Ames: The short answer to that is no. You would have been at [DBD] three years ago or maybe four years ago where Harriet Baldwin, the then Defence Procurement Minister, stood up and said from this day forward all UK procurement will have a UK exportability requirement in them as part of the evaluation criteria. And that has not happened. So I welcome the comments from the current Minister for Defence Procurement, but until I actually see that translated into a document that says here are the evaluation criteria for this program, and here are the points being awarded for this being a UK-exportable product, I’m sorry, but four years down the line I find it hard to say that it’s going to happen in the next three months.
The world is changing. We’ve got Brexit coming. There’s a very strong America First program at work. You’re right about the currency issues and all of that. But I need to see a sense of urgency around this. For too long we’ve talked about it. For too long it has just been one of those nice to have’s, and we believe, we’re British, we believe in free trade. That’s fine. I’m delivering a 100 percent offset. I am closing down UK supply chains on this program over here in order to fulfill offset for European countries. And when I compete this vehicle into the UK, I have no benefit.
Muradian: And not to act as your PR advisor, because Celia does a terrific job doing that as it is, but it’s a conversation you and I have had. Your position isn’t just give this to me because it’s British. It’s good at what it does. So you’re not looking for some sort of handout so your buggy whip continues to be made, it’s just hey, do I get some extra points for being really good and the local kid.
Ames: That’s correct. I’m not asking for this to say, you know, ten percent of the evaluation criteria is how good is this product, 90 percent is it must be British. No. I’m just saying a recognition that this is a UK exportable product. You and I both know that as soon as something is in service with the British Army it is a highly exportable product. As soon as you’re into the export game, you’re into sustaining very high value jobs all around the country. Remember, these are not jobs in the city of London. These are jobs all around the country. So the trickle down, that whole sort of center of gravity that comes around vehicle design, vehicle engineering, all the technology that goes around it, it pulls the tertiary education system, it pulls the supply chain with it. The benefit is just multiplied once you get onto the export side as well. You can’t get onto the export side if you haven’t put it in service with your local defense force.
Muradian: Over and over and over again, I mean I’ve covered British defense since I started doing this in 1992. I was interested in British defense even before I became a reporter. There have always been periodic releases of industrial strategies. And effectively what you’re saying is as the guy who’s on the ground doing it, has it had any impact on you one way or another in terms of all of the strategy documents we’ve seen over the many years?
Ames: We get a lot of warm words but I’m sorry to say warm words don’t pay our bills and that’s my final check. As a leader of a small business in the regions in this country I need cash to pay my bills and the only thing that I’m going to do that is either sell to my domestic or sell overseas, and warm words around we’re going to help British industry are reassuring but it needs to be translated into the evaluation form which says is this product a UK exportable product. X points for that. And once that comes through, then I will see the real change.
And I think possibly there are other nuances around all of that as well in the way that perhaps we could handle international offset better and make it easier for SMEs to export in the management of offset. I just get the feeling offset is not going to go away and therefore we need to think about how to deal with it rather than just go no, no, no, it’s contrary to everything we know about in free trade and therefore we’re going to keep doing it on our own. We’re going to keep ignoring it. It doesn’t feel right.
Muradian: General Sir Nick Carter, the Chief of Defence Staff and Stephen Lovegrove talked about the importance of having partnership. Sir Nick has done a terrific job of sort of setting the table for military innovation with the service chiefs, and then the decision the service chiefs have made to put innovators in the right job. I mean I think it’s incredible the Type 31 went from concept two years ago to actually something that’s been awarded so you can see that drive happening in the military side of things. But both Carter and Lovegrove called for a greater and deeper partnership with industry. But there are those who also were saying wait a minute. That’s easier said than done. I can’t develop stuff on spec and bring you that idea if I have no certitude.
How did you receive that message from them? And what advice would you give them about how to do it right, given that some of the greatest innovation is coming from the small and medium enterprises? It’s not to say that the BAEs of the world and the QinetiQs and the Babcocks aren’t innovative, they really are in their own right. But a lot of the innovation is in the SMEs in the British context and certainly around the world.
What advice would you have for them to get this partnership piece of it right at a time when everybody wants agility, everybody wants speed. But at the end of the day you have shareholders and a board to satisfy because you want to put food on the table of all the people who work for you.
Ames: I think you’ve touched on a lot of the answers to that. It is about the forward look. We will invest and innovate where we can see there is likely to be a demand. So I welcome the partnership. I welcome the joint thinking. I think that’s inevitably where our journey starts. And I’m actually thinking that our electric ATMP and the optionally manned piece on that is very much part of that.
I mean I can see that in ten years’ time this show will be very different in terms of the power pacts that are driving a lot of this equipment. So for me, it’s not a hard business decision to say we need to be showing that we know how to take a diesel-powered vehicle and make it electrically powered, because I can see that that is going to happen and therefore I’m prepared to invest in that. I think what would be nice is where we’re beginning to see industry make that sort of investment, it’s that sort of joined-up approach where we sort of work with government to understand exactly what that means for them, what does it mean for their infrastructure, how are we jointly going to manage the, in a sense, the obsolescence of the hydrocarbon power pacts and how are we going to introduce the new ones. What is the method of moving energy around going to be?
So I think it’s absolutely welcome, the joint thinking. The best is to try and find a few themes, a few specific themes where we can jointly move them forward. I think we’ve certainly got a few threads of that, and I don’t think that one has to look very hard in terms of what are the technology themes going forward for some of that thinking to come out and on the table. I think it would be a lovely way of encouraging British industry and a lovely way of playing out these knowledge transfer partnerships as well. I think it could be very good.
Muradian: Before we go, the Defence Select Committee actually is soliciting views from industry and actually convening to talk about the Defence Industrial Strategy while the government keeps talking about the Prosperity Agenda which has been something that’s been going on for some time.
What’s the feedback you’re going to be giving that committee specifically?
Ames: I think the feedback we’re going to be giving is absolutely our experience from our end of the telescope, and that is that as a UK SME exporting in defense we find very challenging with a lot of protectionism into those domestic markets that we’re exporting into. And then we find that when we’re selling to our UK customer, we’re finding that a lot of those companies that we’ve met overseas that are having their fixed costs underwritten by their local domestic countries can come into the UK with a production line running and therefore have a lot of their fixed costs already written off which makes them a very challenging market to be.
Then from our point of view, without any form of recognition of UK content or UK product, it makes it, in our opinion, a very unlevel playing field and I think that’s why the Defence Industrial Strategy and the review that all of this is going to look at is going to be so crucial. Because I think, do we want a defense industry in the UK is the underlying question. And if we do, what are the competencies and the capabilities that we want to see in the UK? I think once those early decisions have been taken, I think a lot of it will fall out.
But I really feel very strongly that at the moment the playing field that we face when we export and when we sell to our domestic customer is very, very uneven, and it will drive SMEs like us out of the market. No question.
Muradian: Nick Ames, Chief Executive of Supacat. Nick, always a pleasure. Thanks very much. Best of luck to you guys, and hopefully we’ll see you guys again soon and look forward to keep covering this important issue. Thank you so much.
Ames: Always a pleasure. Thank you very much indeed. Have a great time.
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