1 00:00:00,120 --> 00:00:03,520 Speaker 1: To a key story now and a massive pivot by Germany, 2 00:00:03,520 --> 00:00:06,240 Speaker 1: that country looking to unlock hundreds of billions of euros 3 00:00:06,280 --> 00:00:10,200 Speaker 1: for defense and infrastructure investments in a dramatic shift which 4 00:00:10,200 --> 00:00:14,240 Speaker 1: has seen European bonds plunge, the Euro surge, equity markets 5 00:00:14,280 --> 00:00:17,120 Speaker 1: of Germany jumping three percent. It comes after the US 6 00:00:17,200 --> 00:00:19,880 Speaker 1: pau's military support for Ukraine in the EU put forward 7 00:00:19,880 --> 00:00:22,119 Speaker 1: a package worth up to eight hundred billion euros to 8 00:00:22,160 --> 00:00:25,400 Speaker 1: help countries increase defense spending. Joining us now is someone 9 00:00:25,440 --> 00:00:27,680 Speaker 1: incredibly well placed to talk about the impacts of this, 10 00:00:27,840 --> 00:00:31,520 Speaker 1: Oliver Dirt, CEO of Hensalt. It is a defense company 11 00:00:31,560 --> 00:00:36,000 Speaker 1: that makes radars, amongst other technology. The chancel in waiting 12 00:00:36,040 --> 00:00:38,839 Speaker 1: of Germany Friedick Murch saying, whatever it takes is the 13 00:00:38,880 --> 00:00:41,400 Speaker 1: mantra Olivia, thank you for joining us. When do you 14 00:00:41,440 --> 00:00:44,560 Speaker 1: expect to see this money deployed? How much and how 15 00:00:44,600 --> 00:00:47,720 Speaker 1: significant will it be for the defense space of Germany? 16 00:00:48,000 --> 00:00:49,960 Speaker 1: What will it mean for new orders for you in 17 00:00:50,000 --> 00:00:51,080 Speaker 1: the business going forward? 18 00:00:51,760 --> 00:00:56,200 Speaker 2: Well, thanks for having me, Tom, And indeed it's a 19 00:00:56,240 --> 00:01:00,760 Speaker 2: true paradigm shift. I think first time in history since 20 00:01:00,840 --> 00:01:05,760 Speaker 2: decad we're turning from a design to budget principle to 21 00:01:05,880 --> 00:01:09,280 Speaker 2: really a design to capability principle. I mean, we've always 22 00:01:09,319 --> 00:01:13,760 Speaker 2: believed that this would come in. So looking at at 23 00:01:13,800 --> 00:01:16,319 Speaker 2: the orders, I mean, if I compare it to the 24 00:01:16,400 --> 00:01:22,080 Speaker 2: last Extraordinary budget, it took probably about a year un 25 00:01:22,080 --> 00:01:26,880 Speaker 2: till those orders came floating in, and I think we 26 00:01:27,319 --> 00:01:30,119 Speaker 2: have to take that time because first the Parliament has 27 00:01:30,160 --> 00:01:36,360 Speaker 2: to approve the principle that has been introduced yesterday evening. Second, 28 00:01:37,200 --> 00:01:41,120 Speaker 2: as it's a design to capability, those capability documents have 29 00:01:41,240 --> 00:01:44,919 Speaker 2: to be built up. I mean for conventional like the Eurofighter, 30 00:01:44,959 --> 00:01:48,840 Speaker 2: the twenty additional Eurofighter and other framework contracts that. 31 00:01:48,800 --> 00:01:50,000 Speaker 3: Can come very quickly. 32 00:01:50,440 --> 00:01:53,080 Speaker 2: But what I also understand that this will be a 33 00:01:53,080 --> 00:01:58,160 Speaker 2: lot about new smart armament, new innovative products, where I 34 00:01:58,160 --> 00:02:00,720 Speaker 2: think we need a dialogue with industry that come in. 35 00:02:00,920 --> 00:02:03,720 Speaker 3: That would be then the second step of those orders. 36 00:02:03,960 --> 00:02:06,680 Speaker 4: Okay, how quickly do you think it will flow through then? 37 00:02:06,760 --> 00:02:10,360 Speaker 4: I mean looking to China, for example, which is also 38 00:02:10,720 --> 00:02:14,919 Speaker 4: hosting a major political meeting, they have a deadline of 39 00:02:14,960 --> 00:02:18,840 Speaker 4: twenty twenty seven for a modern military in China twenty 40 00:02:18,960 --> 00:02:21,600 Speaker 4: forty nine for it to be among the world's best. 41 00:02:21,639 --> 00:02:25,560 Speaker 4: One suspects that they're targeting to be the best military 42 00:02:25,560 --> 00:02:28,920 Speaker 4: in the world. What about Germany? How quickly? How soon? 43 00:02:30,240 --> 00:02:32,239 Speaker 2: Well, I think first of all, we have to note 44 00:02:32,440 --> 00:02:35,440 Speaker 2: we're not starting from scratch. I mean looking at the 45 00:02:35,440 --> 00:02:38,520 Speaker 2: one hundred billion extraordinary budget that hasn't been in place 46 00:02:38,600 --> 00:02:41,760 Speaker 2: since since almost three years now, so we are producing 47 00:02:41,800 --> 00:02:45,120 Speaker 2: according to this budget. I think also looking at Handshold, 48 00:02:46,200 --> 00:02:50,639 Speaker 2: we took the responsibility also in anticipation of additional budgets. 49 00:02:50,919 --> 00:02:51,680 Speaker 3: With one billion. 50 00:02:51,919 --> 00:02:54,799 Speaker 2: We build a new plant for the weapon sites optronics 51 00:02:54,840 --> 00:02:57,480 Speaker 2: in ober Korchen. We have put in place a new 52 00:02:57,560 --> 00:03:01,840 Speaker 2: logistics center to boost s up the supply chain. And 53 00:03:02,280 --> 00:03:05,800 Speaker 2: from all these past investments we still have fifty percent 54 00:03:06,240 --> 00:03:11,040 Speaker 2: of capacity headroom, headspace, so that we can. 55 00:03:11,120 --> 00:03:12,359 Speaker 3: Deliver quite quickly. 56 00:03:12,440 --> 00:03:16,520 Speaker 2: And I mean also Germany has seven twenty nine a 57 00:03:16,600 --> 00:03:19,600 Speaker 2: deadline in their minds. I mean looking at Russia and 58 00:03:19,639 --> 00:03:24,440 Speaker 2: the reconstitution after potential ceasefire in Ukraine, and in that 59 00:03:24,520 --> 00:03:27,840 Speaker 2: regards again I mean we have done something already. There 60 00:03:27,840 --> 00:03:30,919 Speaker 2: are quick steps to vamp up, and then, of course 61 00:03:31,000 --> 00:03:32,880 Speaker 2: the more important thing is that we have a long 62 00:03:33,000 --> 00:03:34,120 Speaker 2: term planning security. 63 00:03:34,200 --> 00:03:37,320 Speaker 1: Now, what is the biggest challenge to that ramp up 64 00:03:37,320 --> 00:03:39,800 Speaker 1: if it's not funding at this point. 65 00:03:39,520 --> 00:03:42,720 Speaker 2: Well, it's it's manifold, and I'm really happy that that 66 00:03:42,760 --> 00:03:46,040 Speaker 2: we had a lot of discussion with the outgoing government, 67 00:03:46,120 --> 00:03:49,240 Speaker 2: which is pretty much in consensus with the new government 68 00:03:49,280 --> 00:03:49,839 Speaker 2: coming in. 69 00:03:50,600 --> 00:03:53,400 Speaker 3: Also, I recently traveled to Brussels. 70 00:03:53,480 --> 00:03:59,480 Speaker 2: We're talking to the new Commissioner of European Defense Industry, 71 00:04:00,080 --> 00:04:05,720 Speaker 2: and I think key topics are our bureaucracy. I mean budget, 72 00:04:05,800 --> 00:04:09,440 Speaker 2: as you said, is the initiative requisite, but then we're 73 00:04:09,480 --> 00:04:14,440 Speaker 2: talking bureaucracy. I mean we definitely have to easn the 74 00:04:14,480 --> 00:04:19,839 Speaker 2: business for defense players, looking at qualification and a couple 75 00:04:19,880 --> 00:04:24,599 Speaker 2: of registrative acts that are out there, access to raw material, 76 00:04:25,000 --> 00:04:28,000 Speaker 2: talking broader for industry, for Hansholt as we have a 77 00:04:28,120 --> 00:04:30,640 Speaker 2: very deep coverage of our supply chain. 78 00:04:30,960 --> 00:04:33,400 Speaker 3: That is not the critical pass. And last, but not least, 79 00:04:33,440 --> 00:04:34,080 Speaker 3: it's about. 80 00:04:33,880 --> 00:04:37,400 Speaker 2: Personal I mean here we're taking advantage of a struggling 81 00:04:37,480 --> 00:04:42,360 Speaker 2: automotive industry in Germany. But if we want to be innovative, 82 00:04:42,480 --> 00:04:45,200 Speaker 2: I mean, looking at AI, we will need a total 83 00:04:45,240 --> 00:04:48,200 Speaker 2: different set of engineers as we walk forward. 84 00:04:49,040 --> 00:04:52,240 Speaker 4: Yes, I was reading about the people that you've hired 85 00:04:52,279 --> 00:04:57,440 Speaker 4: from that sector into your business. In terms of rearmament 86 00:04:57,480 --> 00:05:01,719 Speaker 4: in Europe and independence, how much do you think there 87 00:05:01,760 --> 00:05:04,919 Speaker 4: is going to be an emphasis on technology that is 88 00:05:05,040 --> 00:05:08,400 Speaker 4: independent from the United States in terms of the weapons 89 00:05:08,400 --> 00:05:08,880 Speaker 4: build out. 90 00:05:09,040 --> 00:05:12,120 Speaker 2: Well, of course, I assume that this will be an evolution, 91 00:05:12,440 --> 00:05:15,479 Speaker 2: not a revolution. It will be a transformative pass over 92 00:05:15,839 --> 00:05:18,960 Speaker 2: the next years. I mean, first of all, it's about 93 00:05:18,960 --> 00:05:23,000 Speaker 2: conventional capabilities. Air defense is at the very top of 94 00:05:23,040 --> 00:05:26,760 Speaker 2: the agenda here. Handshould with our battle proven radar can 95 00:05:26,760 --> 00:05:29,440 Speaker 2: play a significant role. I think also what we see 96 00:05:29,480 --> 00:05:34,680 Speaker 2: from Ukraine is electromagnetic warfare. We haven't taken care a 97 00:05:34,680 --> 00:05:36,720 Speaker 2: lot of that in the past decade, so that is 98 00:05:36,800 --> 00:05:41,080 Speaker 2: vamping up. So for example, with our Pegazos signal intelligence aircraft, 99 00:05:41,400 --> 00:05:44,920 Speaker 2: that's a similar capability where we today depend on the US. 100 00:05:45,279 --> 00:05:47,520 Speaker 2: So that's about We had the first flight last year, 101 00:05:47,839 --> 00:05:50,120 Speaker 2: that's about to come in and we would be ready 102 00:05:50,160 --> 00:05:54,320 Speaker 2: once the aircraft is ready to produce more and of 103 00:05:54,320 --> 00:05:57,599 Speaker 2: course looking at the vehicles. But for the innovative capabilities, 104 00:05:57,960 --> 00:06:03,000 Speaker 2: I think it's about intelligence, surveillance, reconnaissance, where we today 105 00:06:03,120 --> 00:06:07,000 Speaker 2: still have a strong dependency here. It's about networking European 106 00:06:07,080 --> 00:06:12,560 Speaker 2: capabilities and having effective software algorithms that bring the data 107 00:06:12,640 --> 00:06:17,000 Speaker 2: together to have information superority, decision superiority, and in the 108 00:06:17,120 --> 00:06:21,680 Speaker 2: end also effectors a seperiority, and space is a topic. 109 00:06:21,920 --> 00:06:24,680 Speaker 2: I mean, we're discussing as handsholt to bring some of 110 00:06:24,720 --> 00:06:29,839 Speaker 2: our sensors into the space. We see great opportunities with 111 00:06:29,960 --> 00:06:33,520 Speaker 2: new constellations. And last but not least a challenge for 112 00:06:33,680 --> 00:06:37,880 Speaker 2: US is addressing the UAV. So we so far we 113 00:06:37,960 --> 00:06:42,320 Speaker 2: have been rather on the past of larger UAVs helicopters, aircraft, 114 00:06:42,640 --> 00:06:46,200 Speaker 2: but now we see those mass smaller UAVs. So here 115 00:06:46,279 --> 00:06:50,800 Speaker 2: we about to initiate partnerships with UAV vendors to look 116 00:06:50,839 --> 00:06:53,560 Speaker 2: at new payloads that we bring in that have to 117 00:06:53,839 --> 00:06:56,120 Speaker 2: of course also be smart and connectable. 118 00:06:56,360 --> 00:06:58,320 Speaker 1: Yeah, when we taught you av as, we're talking unmanned 119 00:06:58,360 --> 00:07:03,080 Speaker 1: area vehicles or roans effectively, aren't we, Oliver? The UK 120 00:07:03,120 --> 00:07:08,360 Speaker 1: and the US have a uniquely close military partnership. Does 121 00:07:08,400 --> 00:07:11,680 Speaker 1: that make the UK uniquely exposed in terms of our 122 00:07:11,760 --> 00:07:13,200 Speaker 1: over reliance on the US? 123 00:07:13,840 --> 00:07:15,880 Speaker 3: Well, I think definitely. 124 00:07:15,920 --> 00:07:19,360 Speaker 2: I mean looking at Europe now, because I think important 125 00:07:19,360 --> 00:07:23,000 Speaker 2: in the current discussion, as we see evolutionary pass going forward, 126 00:07:23,000 --> 00:07:24,960 Speaker 2: we should not turn our back on the US. But 127 00:07:25,400 --> 00:07:28,960 Speaker 2: I think the view is really to take responsibility for 128 00:07:29,120 --> 00:07:34,480 Speaker 2: defense in Europe and here as we saw Minister President 129 00:07:34,840 --> 00:07:38,720 Speaker 2: Starma in inviting the Europeans, I would see that the 130 00:07:38,800 --> 00:07:43,360 Speaker 2: German French engine has to really be revived. Around that, 131 00:07:43,400 --> 00:07:46,840 Speaker 2: we have the Weimarra triangle with Poland, and we see 132 00:07:46,880 --> 00:07:49,560 Speaker 2: that now UK and probably the Baltics and also the 133 00:07:49,600 --> 00:07:53,480 Speaker 2: Nordic countries are entering the game. Recently, visiting the Munich 134 00:07:53,520 --> 00:07:56,760 Speaker 2: Security Conference, we could see that there's still a kind 135 00:07:56,800 --> 00:08:02,440 Speaker 2: of divide between the NATO and EU members, where some 136 00:08:02,520 --> 00:08:05,960 Speaker 2: of them are feeling the breath of Putine in the 137 00:08:06,000 --> 00:08:09,920 Speaker 2: sense of a true threat, and others are rather reluctant. 138 00:08:09,920 --> 00:08:12,240 Speaker 2: So I think it depends on a coalition of the willing, 139 00:08:12,520 --> 00:08:15,840 Speaker 2: where the UK is, at least to my perception at 140 00:08:15,840 --> 00:08:17,160 Speaker 2: the moment, a strong player. 141 00:08:17,840 --> 00:08:18,480 Speaker 3: A strong player. 142 00:08:18,560 --> 00:08:22,640 Speaker 4: Okay, interesting, what if there is a truth in Ukraine 143 00:08:22,840 --> 00:08:26,920 Speaker 4: with Russia. What if that war is somehow resolved, Does 144 00:08:26,960 --> 00:08:31,720 Speaker 4: all of this defense spending fade the rush that we've 145 00:08:31,760 --> 00:08:35,120 Speaker 4: seen in this week, the sudden kind of realization and 146 00:08:35,360 --> 00:08:39,640 Speaker 4: huge ramp up in spending. Does that falter if there 147 00:08:39,760 --> 00:08:40,640 Speaker 4: is a truce? 148 00:08:41,200 --> 00:08:43,840 Speaker 2: Well, yes, I mean if we look into the past, 149 00:08:44,440 --> 00:08:47,320 Speaker 2: I mean I share that concern because we had a 150 00:08:47,320 --> 00:08:50,719 Speaker 2: lot of volatility in the past three years after the 151 00:08:50,800 --> 00:08:53,000 Speaker 2: Zeide and vendor where which you could also see at 152 00:08:53,000 --> 00:08:55,480 Speaker 2: the volatility of our stock prize going up and down 153 00:08:55,720 --> 00:08:58,840 Speaker 2: whenever there were news about the ceasefire and Ukraine. To 154 00:08:58,880 --> 00:09:02,840 Speaker 2: make it very clear, from a business perspective, we depend 155 00:09:02,880 --> 00:09:07,120 Speaker 2: on a very low digit one digit percentage on the 156 00:09:07,280 --> 00:09:10,560 Speaker 2: Ukraine business. Despite that this is a top priority for 157 00:09:10,679 --> 00:09:15,160 Speaker 2: US to stand with Ukraine. But but but business wise, 158 00:09:15,200 --> 00:09:17,920 Speaker 2: I mean, if there would be a ceasefire, it it 159 00:09:17,920 --> 00:09:18,440 Speaker 2: it it, It. 160 00:09:18,720 --> 00:09:19,960 Speaker 3: Doesn't have a great impact. 161 00:09:20,840 --> 00:09:23,800 Speaker 2: On the other hand, I definitely see and that also 162 00:09:23,880 --> 00:09:27,560 Speaker 2: reflects the discussions I had in Brussel and Berlin. Everybody 163 00:09:27,600 --> 00:09:30,760 Speaker 2: is well aware that a ceasefire and Ukraine looking at 164 00:09:30,760 --> 00:09:34,760 Speaker 2: the broader threat from Russia, is really increasing that threat 165 00:09:34,800 --> 00:09:38,880 Speaker 2: because Russia would would would use this time for reconstitution 166 00:09:39,520 --> 00:09:43,440 Speaker 2: and and with now US drawing back, I think they 167 00:09:43,480 --> 00:09:46,840 Speaker 2: they will dare as we see twenty twenty nine to 168 00:09:46,840 --> 00:09:50,080 Speaker 2: to to test the Article five of NATO, and in 169 00:09:50,120 --> 00:09:54,120 Speaker 2: that regards I can only strongly recommend to to sustain 170 00:09:54,200 --> 00:09:57,320 Speaker 2: that activity. But what we see with a rearm plan 171 00:09:57,480 --> 00:10:01,360 Speaker 2: from from Osula Fondeline and also what what Fredrichmertz and 172 00:10:01,720 --> 00:10:06,000 Speaker 2: his coalition potential coalition partners have introduced yesterday evening that 173 00:10:06,160 --> 00:10:09,000 Speaker 2: is aiming at a long term I would say one 174 00:10:09,080 --> 00:10:11,920 Speaker 2: decayed spending of re arming you Bob or to say 175 00:10:11,960 --> 00:10:15,000 Speaker 2: it with the words of Trump, Europe and Germany are back. 176 00:10:15,480 --> 00:10:17,240 Speaker 1: Yeah, well, that's a nice line to end it on, 177 00:10:17,240 --> 00:10:18,480 Speaker 1: but I don't want to end it on that. One 178 00:10:18,559 --> 00:10:23,360 Speaker 1: quick one before you go, Oliver, Oliver, the interoperability challenge 179 00:10:23,360 --> 00:10:26,880 Speaker 1: of European defense. The US has one main battle tank, 180 00:10:27,000 --> 00:10:30,360 Speaker 1: Europe has more than a dozen battle tanks. How it's 181 00:10:30,360 --> 00:10:33,440 Speaker 1: a fragmented space. Are you willing to play your role 182 00:10:33,520 --> 00:10:38,600 Speaker 1: in terms of consolidation? How willing are policymakers across the 183 00:10:38,640 --> 00:10:42,160 Speaker 1: EU to push through for a more coordinated defense industry? 184 00:10:43,000 --> 00:10:43,040 Speaker 4: No? 185 00:10:43,280 --> 00:10:45,280 Speaker 3: I think definitely we have to work on both sides. 186 00:10:45,520 --> 00:10:48,080 Speaker 2: I mean that's a discussion I had with also the 187 00:10:48,080 --> 00:10:53,120 Speaker 2: Defense Commissioner and what I see in these defense papers. 188 00:10:53,160 --> 00:10:56,280 Speaker 2: The white paper is about to release on EU level, 189 00:10:56,600 --> 00:10:59,520 Speaker 2: the fading German government has released the paper. So this 190 00:10:59,559 --> 00:11:02,520 Speaker 2: is about harmonizing capabilities, and I think here we need 191 00:11:02,520 --> 00:11:07,720 Speaker 2: a strong political impetus to really force the nations, based 192 00:11:07,720 --> 00:11:10,719 Speaker 2: on budget incentives and so on, to harmonize on the 193 00:11:10,800 --> 00:11:12,200 Speaker 2: other hand, industry has. 194 00:11:12,080 --> 00:11:13,240 Speaker 3: To take responsibility. 195 00:11:13,280 --> 00:11:17,240 Speaker 2: And again whenever we talk consolidation, we're very quickly in 196 00:11:17,240 --> 00:11:20,400 Speaker 2: this mood that the big players go together and so on. 197 00:11:20,640 --> 00:11:23,920 Speaker 2: I'd rather drive it from partnership. For me, consolidation is 198 00:11:23,960 --> 00:11:26,200 Speaker 2: a means to an end. You saw that Hansholt has 199 00:11:26,240 --> 00:11:30,520 Speaker 2: recently announced cooperations with Lockheed Martin with SAP, so we're 200 00:11:30,559 --> 00:11:32,760 Speaker 2: working on a lot of other cooperation and I think 201 00:11:32,800 --> 00:11:36,520 Speaker 2: from that regards, we are absolutely tom ready to drive 202 00:11:36,640 --> 00:11:40,320 Speaker 2: interroperability across the system, especially if you look at software 203 00:11:40,360 --> 00:11:41,120 Speaker 2: defined defense. 204 00:11:41,240 --> 00:11:42,920 Speaker 3: That's a true momentum. 205 00:11:42,960 --> 00:11:46,760 Speaker 2: While hardware stays head to regenius, you put software and 206 00:11:46,840 --> 00:11:51,000 Speaker 2: data algorithms on top to bring that interoperability even in 207 00:11:51,040 --> 00:11:52,640 Speaker 2: a heterogeneous landscape.