Patria Case - Background - European War Between General Dynamics and Patria

European War Between General Dynamics and Patria

Major European nations such as France, the UK, Germany, Italy initiated own domestic programs replacing old generation APCs with modern Armored Vehicles. Smaller nations on the other hand initiated process of international tender and procurement for new advanced armored personal carriers. Portugal, initiated the procurement process right away.¨.

Patria and General Dynamics engaged in a competition to win over new defence contracts, notably Belgium, Portugal, where Patria was overpowered by General Dynamics persuasive influence. Patria was astonished when it was excluded from the final round in Portugal and Belgium. Patria is a small national company that produces one of the most competitive Armored Vehicles on the market. Patria's turnover in 2005 was about 300 million Euros and in 2009 reached 500 million Euro. The commercial between Patria and General Dynamics would be akin to fight between David vs. Goliath, as the later is 40 times the size of Finnish Patria.

In 2003 Patria and General Dynamics are competitors for the new Portuguese armoured vehicles. General Dynamics won the contract with the Pandur, in competition with itself, that is General Dynamics Piranha; Patria, the third competitor, was disqualified on technical reasons at the end of 2004. Patria naively appealed against the decision, and Lisbon court dismissed Patria appeal in less than 40 days (by February 2005), so Portugal could pay 365 million Euro in exchange for 260 Pandurs and 516 million (150% of the contract value) of General Dynamics offset.

Then in the Belgian tender in 2006 the finalists are: GD-Steyr Pandur, GD-MOWAG Piranha, Iveco Centauro, and Patria AMV. Patria lost, and General Dynamicswon: about 700 million Euro for 242 General Dynamics Piranha and 700 million of GD offset, accurately divided between Flanders and Walloonia (delivery between 2007-2012).

Then Czech Republic. Defense Daily writes in Dec 2005: "As fate would have it, Steyr’s Pandur II (General Dynamics) and Patria’s AMV were the final two contenders for the Czech Republic’s $1 billion wheeled APC contract." Patria won, then the contract goes back to General Dynamics, Pandur.

Similar stories for Romania, Ireland, Denmark, Lithuania, Sweden, Spain etc. But General Dynamics has its most conspicuous sales outside of Europe: about $ 6 billions of Light Armored Vehicles to Saudi Arabia National Guard, via Foreign Military Sales.

Patria had some victories against the U.S. giant: Croatia, Slovenia, Poland, Estonia. And most notably, United Arab Emirates. In 2009 Sweden canceled a contract award to Patria of $338 million for 113 Patria AMV, but restarted the contract in 2010.

Read more about this topic:  Patria Case, Background

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