Rüstungsindustrie

Arms industry.

More names of German arms manufacturers seem to be mentioned in thrillers and suspense novels set in the U.S. than are named in the German news, hence the following incomplete list of European-continent weaponmakers:

Bundeswehr:

The German military is selling its used weapons to countries around the world on a large scale.

Airbus (was E.A.D.S.):

Germany’s biggest arms exporter, at >12 billion euros sales in 2010, ~27% of its total sales, reported Wirtschaftswoche.de. Airbus’s old defense & security division, named Cassidian, manufactures e.g. the Eurofighter jet at its largest plant near Ingolstadt, with another plant at Unterschleißheim outside Munich (both in Bavaria). Airbus makes an A400M troop transporter, Tiger combat helicopter, “N.A.T.O. helicopter 90” with problematic autopilot, monitoring systems, electronica and missiles. With Thyssen, Airbus purchased a naval electronics firm.

Update on 30 Jul 2013: The Munich-based Airbus announced it was combining its Cassidian (weaponry), Astrium (aerospace) and Airbus Military branches into one “aerospace and arms,” Raumfahrt und Rüstung or Defense and Space division which will be headquartered at Ottobrunn, outside Munich.

Notoriously-investigated-for-corruption people involved with Airbus have included: company co-creator and then chairman Franz Josef Strauß (C.S.U.) and arms lobbyist Karlheinz Schreiber.

Rheinmetall:

Düsseldorf-based company (North Rhine-Westphalia) that’s apparently one of the world’s biggest defense manufacturers, making Combat Systems, Electronic Solutions and Wheeled Vehicles at factories around the world. Anti-aircraft systems, munitions. Tanks include the Fuchs, the fox, and others: Rheinmetall is partnering with Kraus-Maffei Wegmann to build the Puma tank and the air-conditioned Leopard 2 tank. 2 billion euros in arms sales in 2010, about half its total sales, reported Wirtschaftswoche.de.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 1.5 million euros to persuade the Greek military to buy the “Asrad” anti-missile system manufactured by Rheinmetall in a joint venture with the Swedish Saab company.

Thyssen-Krupp:

Headquartered in the German towns of Essen and Duisburg (North Rhine-Westphalia), this steel company has shipyards that make navy boats and submarines, including the U212 and U214 that use electric drives quietly powered by a fuel cell. With Airbus, Thyssen purchased a naval electronics firm. ThyssenKrupp made about 1.2 billion euros in weapons sales in 2010, reported Wirtschaftswoche.de.

Notoriously-investigated-for-corruption people involved with Thyssen have included: Karlheinz Schreiber.

Update on 03 Dec 2013: ThyssenKrupp recently raised some capital by selling ~50 million shares at ~17 euros each. The increase in stock meant the most important shareholder the Krupp Foundation, which didn’t buy in this time, lost its blocking minority. With the foundation’s ownership in the company dropping to ~23% from ~25%, it could no longer block decisions made at shareholders’ meetings [Hauptversammlung] and thus defend the firm against hostile takeovers and being sold off in pieces [Zerschlagung] by vetoing e.g. fusions, changes made to who’s on the supervisory board, changes to the articles of association or dissolution of the company, Wirtschaftswoche.de elaborated. As long as the Krupp Foundation owned ≤25% they were entitled to three seats on ThyssenKrupp’s supervisory board; under 25%, only two seats.

The reduction in the Krupp Foundation’s power within ThyssenKrupp might have increased the power of Cevian, a 20-employee Swedish firm that buys and sells companies but dislikes being called a hedge fund, wrote Süddeutsche.de. “One of Europe’s most profitable private equity companies,” Süddeutsche.de wrote, Cevian announced it had increased its ownership in ThyssenKrupp to ~6% in September and then nearly 11% after the recent stock sale. Managed by investors Christer Gardell and Lars Förberg, Cevian tends to buy a company’s stock, drive up the stock price and sell after a few years, Süddeutsche.de said, adding that Mr. Gardell has been accused in Swedish media of being a Gordon Gecko-type butcher [“Schlachter“] who likes to break up firms and sell them off piece by piece.

Diehl:

Company based in Nuremberg, Bavaria, that sells missiles. 1.5 billion euros in weapons-industry sales in 2010, about ~27% of its total sales, reported Wirtschaftswoche.de.

MAN SE:

Munich-based transport company that ordered the submarines built at the Thyssen shipyards for which some German prosecutors thought bribes had been paid to government procurement officials in Greece. In 2011, Volkswagen acquired control of MAN SE.

Krauss Maffei Wegmann, KMW:

Munich-based company, with a location in Kassel, that manufactures tanks and self-propelled artillery. It’s a family firm whose main shareholders are the brothers Manfred Bode and Wolfgang Bode. Kraus-Maffei is partnering with Rheinmetall to build the Puma tank and the air-conditioned Leopard 2 tank. Wirtschaftswoche.de reported that Kraus-Maffei is one of the few German companies that only makes weapons, with about 900 million euros in arms sales in 2010.

KMW was named by a man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts. He told Athens prosecutors that he accepted bribes from weapons manufacturers in Germany, France, Russia, U.S.A. and Israel, and specifically from KMW to purchase 170 Leopard 2 tanks. KMW denied this was the case, saying Greece bought the tanks in 2003 after Antonios K. had left his procurement post. Mr. K. also said KMW paid him nearly three-quarters of a million euros to buy artillery.

Update on 21 May 2014: Munich prosecutors are investigating two former Bundestag members (S.P.D.) for taking 5 million euros in a 200-million-euro sale of PzH 2000 tank howitzers to Greece’s defense ministry a decade ago. Some of the money was spent on bribes to Greek officials, investigators think. The corruption statutes of limitation have probably expired so they’re looking into tax fraud aspects. The two S.P.D. politicians worked for K.M.W. as consultants after their Bundestag careers. Dagmar Luuk was chair of the Bundestag’s German-Greek Parliamentary Group with good connections to the S.P.D.’s sister party Pasok in Athens, and Heinz-Alfred Steiner was deputy chair of its Defense Committee.

Update on 26 May 2014: Munich prosecutors are investigating Kraus-Maffei Wegmann’s C.E.O., Frank Haun, and five former managers for tax fraud for deducting bribes paid in the Greek arms deal as operating expenses.

Heckler & Koch:

Southwest German company that exports guns that get mentioned in U.S. murder mysteries. Headquartered in the tiny Rottweiler town of Oberndorf am Neckar, a centuries-old weapons industry center according to Wikipedia. H&K became British-owned in 1991 when BAe’s Royal Ordnance division acquired it, merging into defence giant BAE in 1999. A recent Zeit.de article said an important H&K investor has been the London-based German investment banker Andreas Heeschen, who signed papers buying the company in Dec. 2002 with his partner Keith Halsey and the BAE subsidiary Royal Ordnance. Another German, Alfred Schefenacker, the son of a man who founded a famous car mirrors manufacturer in Baden-Württemberg, bought in with 5% in 2010.

Zeit.de quoted an arms-industry-briefed Bundestag member from the Leftists party as speculating that a weapons manufacturer might be forced to export more aggressively and less selectively in order to stay afloat after a “financial shark” starts pulling money out of the company. The newspaper cited examples of a world-leader, “quality” garden tools manufacturer that went bankrupt five years after Mr. Heeschen bought it, and a soap manufacturer he purchased and kept in an “existentially threatening” situation according to an auditor interviewed by Wirtschaftwoche, Zeit.de wrote. Heckler & Koch has appeared to be struggling with heavy debt burdens: a 2010 lawsuit by four U.S. hedge fonds against Mr. Heeschen’s handling of debt agreements for the company alleged he and his people were using H&K “like a personal piggy bank” and had pulled $130 million out of the company, buying vacation homes, yachts and airplanes for personal use, according to court documents Wirtschaftswoche had seen. H&K denied this: “The private use of investment objects by shareholders” was always “privately paid for” by said shareholders.

Stuttgart prosecutors, regular police and a customs police investigated Heckler & Koch for violation of the Kriegswaffenkontroll- und Außenwirtschaftsgesetz [“War weapons control and foreign trade law”] after their guns turned up in countries for which no export licenses had been issued: rural Mexico, Georgia vs. Russia in 2008, Libya in 2011. The Zeit.de article quoted the same source as adding that “A third investigation will be looking into suspected bribery of foreign and German officeholders.” H&K and Mr. Heeschen denied that the company illegally exported weapons to countries not on their permit lists, but later an in-house letter in April 2013 told H&K employees it appeared likely that two long-term employees, lone gunmen acting alone, had in fact exported H&K guns directly to Mexico on purpose and not by accident via e.g. the U.S.A., Zeit.de said. The investigation was still ongoing in late August 2013.

H&K has also been criticized in Germany for helping build and supply gun factories in Saudi Arabia, turning that country into an arms exporter in addition to an enthusiastic arms importer. Their Saudi partner MIC (Military Industries Corporation) has since been selling these guns at international weapons shows and on the internet. Mr. Heeschen insisted every MIC sale from the joint venture had been reported to and approved by the proper German authorities.

H&K appears to have declined to protect its gun brands in gaming, with the result that, said Zeit.de, their guns appear in almost every shooter game with the concomitant marketing effects but the company doesn’t have to defend the ethics of licensing that.

Mauser, Feinwerkbau:

Other German gun manufacturers that have been based in Oberndorf am Neckar. The two guys who run L&O Holding said their company owned Mauser, in a 2010 interview in the Emsdettener Volkszeitung linked to by Süddeutsche.de.

Krieghoff:

Gun manufacturer in Ulm (Baden-Württemberg, on the Bavarian border). Listed as “corporate partner” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Carl Walther:

Gun manufacturer in Ulm (Baden-Württemberg, on the Bavarian border) that is owned by PW Group.

Update on 02 Jul 2014: Süddeutsche Zeitung said prosecutors are investigating Heckler & Koch and Carl Walther for illegally exporting weapons from Germany to Mexico and Colombia.

Umarex:

Gun manufacturer in Arnsberg (North Rhine-Westphalia) that is owned by PW Group.

PW Group:

Holding company based in Arnsberg (North Rhine-Westphalia, in the Sauerland) that owns Walther and Umarex and has donated to U.S. gun lobbying groups such as the National Rifle Association and/or the National Shooting Sports Foundation.

SIG Sauer:

Switzerland’s Swiss Arms’s German subsidiary, a gun manufacturer headquartered in northernmost Germany, almost in Denmark. Süddeutsche.de reported that in 2013 Swiss Arms belonged to the German investment company L&O Holding.

Update on 02 Jul 2014: Süddeutsche Zeitung, NDR and WDR said internal documents and statements from multiple insiders at SIG Sauer indicate the company got a German export permit to send pistols to its U.S. subsidiary knowing they would be sent on to police in Colombia. This violates the Bundessicherheitsrat’s export permit conditions, which I don’t know. Customs police and Kiel prosecutors have been investigating since May 2014, but lacked evidence that the German firm knew what would happen to the pistols. Now these internal documents from the company headquarters in Eckernförde were found to contain the words “Customer in Colombia,” as well as an internal warning from a corporate lawyer that the two-step export was “most strictly verboten” and could have “harsh penalties.”

The Colombian newspaper El Tiempo is said to have mentioned that Sig Sauer might have paid bribes in Colombia and that German federal police [Bundeskriminalamt] and customs police [Zollkriminalamt] are in Bogotá to investigate.

Kiel prosecutors are also investigating Sig Sauer for sending pistols to Kazachstan’s presidential guard, again via the U.S. subsidiary.

Blaser:

Gun manufacturer in Isny im Allgäu (Baden-Württemberg, on the Bavarian border) that is owned by L&O Holding.

L&O Holding:

Part of a “Holding-Geflecht” [holdings meshwork, lattice; interwoven holding companies] run by Michael Lüke and Thomas Ortmeier of Emsdetten (North Rhine-Westphalia). Süddeutsche.de reported that L&O donated to the National Rifle Association according to N.R.A. documents acquired by the Violence Policy Center (U.S.A.).

Update on 18 Jul 2014: Mr. Lüke and Mr. Ortmeier are said to have made their fortune in textiles, then in 2000 entered the arms industry by buying Sig Sauer, Swiss Arms, Blaser and Mauser. Mr. Ortmeier is said to mainly take care of their textiles interests while Michael Lüke runs the guns companies, said Süddeutsche Zeitung. According to the Commercial Registry [Handelsregister] he has been Sig’s C.E.O. [Geschäftsführer] for years, “sometimes alone.” “In most L&O Holding weapons companies, his name is on the registration documents. The same is true for awkward in-house confidential documents.” Süddeutsche, NDR and WDR said they saw Sig Sauer export documentation listing Mr. Lüke as Ausfuhrverantwortlicher, person responsible for exports.

Ferrostaal:

Paid 149 million euros in late 2011 to conclude a trial for bribing officials in Greece and Portugal to buy submarines. In the Greek bribery story unfolding in December 2013, schmier was paid in Greece to accelerate sales of the U-214 submarine built at the HDW company’s shipyard in Kiel on the northern coast but sold to the Greek military with the Essen-based Ferrostaal’s help (North Rhine-Westphalia). The Greek defense official found to have ~14 million euros in secret accounts told Athens prosecutors he received bribes in the U-214 deal from an employee of the Atlas company, which kits out submarines and is now majority-owned by ThyssenKrupp.

Tognum, now Rolls-Royce Power Systems Holding:

Group that manufactures tank and naval engines, based in Friedrichshafen (Baden-Württemberg). It includes non-aircraft divisions from Daimler’s spun-off MTU; MTU’s aircraft engine manufactories became the Munich-based MTU Aero Engines.

Update on 07 Mar 2014: Daimler plans to sell its shares in what was known as Tognum to its partners at Rolls Royce. According to Wirtschaftswoche.de, Daimler first spun off the company under the name of MTU Friedrichshafen in 2005, selling it to the investor EQT. They renamed it Tognum and held an initial stock offering in 2007. In 2008, Daimler bought in again. In a 2011 joint venture, Daimler and Rolls Royce purchased the company entirely and took it back off the stock exchange. Tognum’s name was changed to Rolls-Royce Power Systems Holding in early 2014.

MTU Aero Engines:

A Daimler-Chrysler subsidiary headquartered in Munich that makes jet fighter engines among other things. Owned by New York private equity company KKR from 2003 to 2005; Wikipedia said KKR said they sold all their MTU stock on German stock exchanges in 2005. Wirtschaftswoche.de reported MTU Aero made 486 million euros in weapons sales in 2010, 18% of its total sales.

Update on 19 Feb 2014: Uproar in the Bundestag after the Greens discovered the responsible Bundestag committee made a 55-million euro payment to MTU in December 2013 without obtaining Bundestag approval as was necessary. The payment was compensation for a 2011 decision to reduce the German military’s Eurofighter order from 180 to 140 fighter jets. But budget rules require the ministry to obtain approval from the Bundestag’s budget committee [Haushaltsausschuss] for every single expenditure >25 million euros. The two state secretaries responsible for making the payment apparently did not consult with the defense ministry’s management [Hausleitung] as prescribed either. Germany’s new defense minister said she was shocked and, said Spiegel.de, invited all responsible persons in her ministry to an Arms Board [Rüstungsboard] meeting to discuss the defense department’s biggest procurement projects. After the meeting, she fired the two state secretaries and said the Bundeswehr will be thoroughly examining its ~1200 procurement projects over the next three months.

Daimler:

Daimler’s subsidiary Mercedes-Benz Military Vehicles exports them around the world, including to the Gaddafi regime in Libya. Headquartered in Stuttgart, Baden-Württemberg.

Siemens:

Huge electronics and trains manufacturer in Erlangen, Bavaria, that partnered with IBM to replace the Bundeswehr’s “information and communications technology,” codenamed Projekt Herkules. Costs originally promised at 6.8 billion euros now expected to run to at least 7.8 billion, as estimated by the Association of German Taxpayers [Steuerzahlerbund e.V.] which tries to track German military cost overruns.

Trovicor:

Headquartered in Munich, this surveillance technology firm was originally created at Siemens twenty years ago, where it was called Voice & Data Recording. It was combined into an Intelligence Solutions department at the joint venture Nokia Siemens Networks in 2007, alleges German Wikipedia, and sold to a Munich firm of private investors in 2009. The company has branches in Dubai, Pakistan and Kuala Lumpur. Only governments are said to purchase Trovicor products, such as their “Monitoring Center” (formerly “Siemens Monitoring Center”).

Süddeutsche Zeitung said information from WikiLeaks showed that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

Utimaco:

A German company the French company Qosmos said bought their deep packet inspection components to sell them to the Italian surveillance company Area SpA which was building a surveillance system for the Assad regime in Syria that was used to torture people. Süddeutsche Zeitung said information from WikiLeaks shows that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

Süddeutsche Zeitung said information from WikiLeaks showed that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

Elaman:

A Munich company specializing in tools for monitoring and analyzing data from just about any communications network.

Süddeutsche Zeitung said information from WikiLeaks showed that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

FinFisher or FinSpy, a.k.a. Gamma, Gamma International GmbH, FinFisher GmbH:

A joint English-German (Munich) enterprise that sells software exploits to governments. E.g., “The FinFly Exploit Portal offers access to a large library of 0-Day and 1-Day Exploits for popular software like Microsoft Office, Internet Explorer, Adobe Acrobat Reader, and many more.” They sell products for accessing e.g. computers and phones, with packages for e.g. remote intrusion or U.S.B. stick penetration sold together with training for remarkably low prices. Clients include governments such as Hosni Mubarak’s in Egypt, it is alleged. Citizen Lab in Toronto found traces of their software in Brunei, Ethiopia, Turkmenistan and the United Arab Emirates, and in the Czech Republic and the Netherlands.

English Wikipedia alleged that the umbrella company, Gamma Group, specializes in surveillance and monitoring and is owned by a man with an English name via a shell company in an offshore tax paradise. German Wikipedia alleged that that man’s son now owns the company (85%) while a man with a German name owns the other 15%, and that the German government supports the company by providing export credit guarantees [Hermesbürgschaft, Hermesdeckung].

Update on 11 Apr 2014: Gamma is said to have sold a trojan program to the government of Bahrain that was used to attack government critics.

German manager and co-owner Martin Münch told the Süddeutsche Zeitung that his firm never violated German weapons export laws, but the S.Z. commented that this is not as exemplary as it sounds because the software is not shipped from Germany but from England. The same European dual-use regulation applies in England and Germany for the export of surveillance technology, S.Z. said, but for attack software it merely requires the purchasing country to create a certificate affirming all is properly installed as agreed and send that certificate to the exporter, who archives it. Neither Mr. Münch nor the responsible German Economy Ministry wanted to tell the newspaper how often the government inspects the certificates and the accuracy of their contents.

S.Z. said information from WikiLeaks shows that employees from the German companies Trovicor, Utimaco, Elaman and Gamma travel regularly to countries with authoritarian regimes.

DigiTask:

Hessian software company that admitted in 2011 they’d sold software that could be behind the Bundestrojaner to the Bavarian government in 2007. They sold similar surveillance software to state and federal governments in Austria, Switzerland and the Netherlands.

According to Deutsche Welle’s 2011 article,

“an online record on an official European Union website shows that in 2009 the German Federal Network Agency (Bundesnetzagentur) paid DigiTask over 660,000 euros ($897,000) for the construction of a ‘wiretap testing and monitoring system.'”

D.W. said a Bavarian attorney said this trojan was installed on his client’s laptop at the Munich airport.

Rohde & Schwarz:

Die Zeit described this company as a weapons manufacturer. Nominally, the company makes and sells “high-frequence measurement technology, radio communication, television broadcasters, radio broadcasters, locational technology and surveillance technology” according to de.wikipedia and “Cellular, Wireless Connectivity, Navigation, Broadcast TV and Radio” according to en.wikipedia. They’re based in Munich with facilities in the Czech Republic, U.S., Singapore, Korea, China, Denmark, France, Great Britain, Singapore and Malaysia, among others.

Mowag:

Swiss company that makes armored vehicles. Founded in 1950 in Switzerland, it is now owned by the U.S. weapons manufacturer General Dynamics. In 2003, General Dynamics merged it with Spain’s Santa Barbara Sistemas and Austria’s Steyr Spezialfahrzeug to form their General Dynamics European Land Combat Systems business unit, headquartered in Vienna.

Update on 06 Mar 2014: The Swiss parliament voted 94 to 93 to overturn a ban on exporting weapons to countries with human rights problems. Proponents for overturning the ban said Swiss companies shouldn’t be disadvantaged economically because they can’t sell weapons to e.g. Saudi Arabia like e.g. Sweden or Austria. What’s funny is that the Spiegel.de article reporting this showed tanks made by Mowag AG, which belongs to the U.S.A.’s General Dynamics, which also owns the Austrian competitor.

Swiss UAV:

Switzerland-headquartered drone manufacturer that has partnered with Sweden’s Saab Group.

BAE Systems:

British firm that’s one of the world’s biggest arms manufacturers, called Europe’s second-largest after General Dynamics in July 2014. Said to make jet fighters, military submarines, aircraft carriers and bits of French nuclear weapons, though they announced they’d discontinued their production of land mines and cluster bombs after public protest. Buys, sells and owns pieces of many other weapons manufacturers around the world.

BAE manufactures a competitor to Krauss Maffei Wegmann’s “Leopard 2” tank, called the “Challenger.”

Serious corruption investigations of BAE apparently by the U.K.’s Serious Fraud Office, the U.K.’s National Audit Office, the U.S.’s Department of Justice and a Tanzanian prosecutor whose life was threatened, about sales to countries such as Chile under Augusto Pinochet, the Czech Republic, Romania, South Africa, Saudi Arabia and Tanzania.

Rolls-Royce:

British aircraft engine manufacturer that makes jet fighter engines, submarine nuclear reactors. Partnered with Bavarian car-maker BMW, who bought their car-manufacturing subsidiary.

MDBA:

Trans-European missile manufacturer that’s been acquiring missile companies from Germany, Spain, France, Italy, U.K. and U.S.A.

MDBA’s German branch, which used to be called LFK-Lenkflugkörpersysteme GmbH, makes “smart bombs,” cruise missiles or guided missiles. It was headquartered outside Munich but has been moved to a small town near Ingolstadt, Bavaria.

While touring Kurdistan in January 2014, Bundestag member Jan van Aken (Leftists) and journalists traveling with him were shown Milan anti-tank missiles, manufactured by MDBA in a German-French partnership, that Al Qaeda is now using to fight in Syria. It’s not clear exactly how these particular bombs got to where they were found, but Germany sold thousands of Milan missiles to the Assad government in the 1970’s. Now Al Qaeda-affiliated groups have managed to divert some and are fighting with them. Although France was usually listed as the seller of these “so-called small arms,” NDR wrote, Germany had a veto right to stop any sales. Islamist rebel groups have apparently uploaded videos of themselves plundering Assad-family weapons caches that include Milan missiles. Syrian videos have also been uploaded showing the missiles in use, including ones of more recent manufacture than the 1970’s.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 400,000 euros to persuade the Greek military to buy Exocet missiles manufactured by MDBA.

Saab:

The famous Swedish car company was apparently only a subsidiary to a large Swedish aerospace and defense manufacturer. Sometimes partners with the U.K.’s BAE. They make unmanned aerial systems, aerostructures, fighter jets, unmanned underwater vehicles, sensor systems, jammer systems, “signature management systems,” missiles, torpedoes, ground combat weapons, remotely operated (ground) vehicles, radar systems for land, sea and air, electronic defense systems, and provide military training and education. Military jets include the Gripen.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 1.5 million euros to persuade the Greek military to buy the “Asrad” anti-missile system manufactured by Rheinmetall in a joint venture with Saab. Antonios K. also said he received ~240,000 euros to encourage purchase of Saab’s Arthur locatory radar system.

Volvo:

The Swedish truck manufacturer has an arms branch, because there was talk about it as a possible candidate for a merger with Krauss Maffei Wegmann.

Volvo owns the French company Renault Trucks Defense, which is partnering with the Russian arms manufacturer Uralwagonsawod (under U.S. sanction for destabilizing eastern Ukraine) to develop a tank. Uralwagonsawod said in June 2014 that the project was still on schedule. Volvo will be providing the tanks’ engines.

Finmeccanica:

Italian defense contractor that has delivered to the Assad government in Syria. In partnership with various firms around the world, Finmeccanica makes jet fighters, military aircraft, helicopters, space stuff, defense electronics, security electronics, “defense systems.” The Italian government still owns a stake in the company. Two recent C.E.O.’s have had to step down after corruption charges. In a 2013 article, Spiegel.de said about Finmeccanica that “Italy’s largest manufacturer of planes and weapons is said to have passed opulent bribes to foreign customers, from which admittedly a portion had to flow back to the donors.”

Hacking Team:

Milan-based firm that sells surveillance software to governments, including ones with questionable human rights records.

Area SpA:

An Italian software company based outside Milan that was building a surveillance system for the Assads in Syria, according to the French firm Qosmos. The German company Utimaco was also involved, Qosmos said.

Beretta, Benelli, Franchi:

Italian companies that export guns mentioned in U.S. murder mysteries. Listed as “corporate partners” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Iveco:

Italian industrial vehicles manufacturer, under Fiat, that makes armored vehicles.

When Sergej Schojgu became the Russian defense minister in early 2013, he immediately canceled the purchase of 1275 armored vehicles from Iveco, said the F.A.Z. The Russian military had to buy the deal’s first tranche of 1775 vehicles for 1.5 billion euros, but they said they were only doing it to avoid breach of contract.

Glock:

Austrian company that exports guns mentioned in U.S. murder mysteries. Listed as “corporate partner” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Steyr:

Austrian company that exports guns mentioned in U.S. murder mysteries.

Steyr Spezialfahrzeug:

Austrian company that makes armored vehicles. General Dynamics bought it from the U.S. car manufacturer General Motors’s weapons division in 2003 and merged it with Spain’s Santa Barbara Sistemas and Switzerland’s Mowag in 2003 to form their General Dynamics European Land Combat Systems business unit, headquartered in Vienna.

FN Herstal:

Fabrique National d’Herstal, Belgium, which Wikipedia alleges is Europe’s largest small arms manufacturer and owns the famous U.S. firms Winchester (U.S. Repeating Arms Company) and Browning. Listed as “corporate partner” of the National Rifle Association in documents acquired by the Violence Policy Center (U.S.A.).

Dassault Group:

French company whose subsidiaries e.g. manufacture aerospace vehicles and equipment, fighter jets, missiles, logistics systems and military simulators. It owns France’s second-largest newspaper of record, Le Figaro.

A man who was in charge of “Rüstung” for the Greek military from 1992 to 2002 and was recently found to have ~14 million euros in secret accounts told Athens prosecutors that he received 800,000 euros to persuade the Greek military to buy “Mirage 2000”-type fighter jets manufactured by Dassault.

DCNS:

French company majority-owned by the French government that makes Armaris submarines, nuclear-powered aircraft carriers and e.g. amphibious assault ships. DCNS and Thales partnered to create the Armaris submarine manufacturer.

Investigated in France for allegations of bribery in e.g. Malaysia and Taiwan.

DCNS manufactured the two helicopter carriers France still wants to deliver to the Russian navy in the fall of 2014.

Thales:

Large French defense manufacturer, partly owned by the French government. Thales and DCNS partnered to create the Armaris submarine manufacturer.

Wikipedia said a financial advisor to South African president Jacob Zuma’s A.N.C. party “was found guilty of organizing a bribe on behalf of Thales” and the World Bank has blacklisted Thales for bribery. Thales was told to pay the biggest bribery fine in modern French history in the 2011 resolution of a 1991 case involving the sale of frigates to Taiwan, a dead Taiwanese procurement officer and alleged large ferbribery slush funds in Swiss bank accounts, back when the company was called Thomson-CSF.

Vupen:

Montpellier-based French firm that calls itself “The Leading Provider of Defensive and Offensive Cyber Security Intelligence.”

Qosmos:

French company that sold deep packet inspection software, matériel de surveillance, to the Assad regime in Syria. After complaints from human rights organizations, the French government is now investigating this company for assisting to commit torture.

In 2012, Qosmos said it didn’t sell the software directly to the Assads. Instead, the company said, before quitting the project in 2011 they sold the software to a German firm called Utimaco, who sold it to an Italian firm called Area, who handled things from there. Also, Qosmos said, when they dropped out in 2011 the software wasn’t finished yet and couldn’t be fully implemented. In a recent response to the media, Qosmos still said they didn’t sell to Syria. Qosmos said they don’t sell surveillance systems, merely components that their clients can put into things.

Renault:

Renault Trucks Defense has been working on a project since early 2013 with the Russian arms manufacturer Uralwagonsawod (which is on the U.S.’s sanctions list for contributing to the destabilization of eastern Ukraine). They are developing a tank. The Russian side said the first functioning prototype should be available in September 2015.

In early April 2014 the French side said the proect had been suspended, but in late June 2014 Oleg Sijenko, the C.E.O. of the Russian side, said the E.U. sanctions had not affected the project. The government of France is said to want to please Uralwagonsawod because it is the majority shareholder of the French steelworks Sambre et Meuse, which employs ~300 people.

Renault Trucks Defense is owned by the Swedish arms manufacturer Volvo.

Santa Barbara Sistemas:

Spanish company that makes armored vehicles, weapons systems and ammunition. Acquired by the U.S. weapons manufacturer General Dynamics in 2001. General Dynamics combined it with Austria’s Steyr Spezialfahrzeug and Switzerland’s Mowag in 2003 to form their General Dynamics European Land Combat Systems business unit, headquartered in Vienna.

General Dynamics:

Europe’s biggest weapons manufacturer, followed by BAE and, if their merger goes through, the combined Krauss Maffei Wegmann and Nexter tank and artillery manufacturers.

(RISSSS toongs in dooze tree.)

“Das Geld dafür geben die Anderen”

“Other people are paying for it,” how financial reporter Frank Bethmann commented the U.S. company Verizon’s “schwindelerregend” offer of $130 billion to buy out British partner Vodafone’s stake in their U.S. joint venture Verizon Wireless. In the 02 Sep 2013 announcement of the sale, Verizon said as part of it they intended to borrow $25 billion one week later at the currently very low interest rates; that would have been the largest amount ever borrowed by a company in the history of the world apparently.

Update on 12 Sep 2013: Verizon’s $49 billion Unternehmensanleihe [“company loan” i.e. corporate bond] “emission in eight tranches at varying interest rates and terms to investors around the globe” was the biggest ever, according to manager-magazin.de, adding that the takeover itself was also the third-biggest ever.

This is not the only vertiginous telecom merger in the works. There’s two in the German market as well.

On 23 Jul 2013, Spanish Telefónica’s German subsidiary O2 announced that it wanted to buy the Dutch KPN’s German subsidiary E-Plus, though “only” for five billion euros. The resulting company would become the German market’s largest mobile phone provider (43 million customers), followed by Deutsche Telekom subsidiary T-mobile (37 million customers) and then the British Vodafone (32 million c.). The merger required approval from German and E.U. competition authorities.

Update on 12 May 2014: The German Monopoly Commission [Monopolkommission] told the Frankfurter Allgemeine Zeitung they expect the E.U. to set serious competition-saving conditions for approving Telefónica’s acquisition of E-plus, including that there will still be four mobile telephony providers in the German market after the merger. “Abstract concessions and offers won’t do it.” Three mobile phone providers competing in the German market would not suffice because E-plus was the one that stirred up the market the most and it would be the one disappearing.

Update on 13 Sep 2013: Now British Vodafone is purchasing the Munich-based Kabel Deutschland, “Germany’s biggest cable network operator,” at ~8.5 million television households,” for ~11 billion euros (~7.7 billion for ≥75% of Kabel Deutschland’s stock and the rest to cover Kabel’s debts; stock cost to be announced Monday 16 Sep 2013), according to Spiegel.de and manager-magazin.de. This will increase Vodafone’s competitiveness with Deutsche Telekom in the German market selling wireless and landline telephonery, television cable and internet access. European competition authorities approved the deal on 20 Sep 2013.

Huge telecom mergers & acquisitions could be motivated by more than just the roseate future of voice and internet communications plus current rock-bottom interest rates. If telecom industry people believe governments will stop defending net neutrality and consumer privacy, they will fear they must join a large existing telecom and fight to expand it, or die. They will not think risky entrepreneurship or small-to-medium-sized companies are an option. If a telecom gets big enough in a deregulated market that includes suspicionless surveillance, the money will sort itself out somehow. In regulatory situations where governments have to grant unusual concessions to big telecoms, governments will grant unusual concessions to big telecoms.

(Doss   GELD   dah foor   gay ben   dee   ON dare en.)

Zwei-Klassen-Internet

“Two-class internet,” Deutsche Telekom’s third current scandal: they plan to charge content providers for not slowing down their content’s delivery, ultimately giving large, financially-established firms an advantage over smaller firms and startups.

By also “throttling” consumers’ internet access speeds, Telekom was planning to cash in at both ends of the pipe. Deutsche Telekom has now conceded to the outrage by announcing they won’t throttle consumers’ internet access as hard or as fast as originally announced.

Meanwhile, the Wall Street Journal wrote on 19 Jun 2013 that large US content companies have already been paying tens of millions of dollars per year per company to large phone and cable internet companies in the USA to keep the network operators from slowing down delivery of their content. The same large content companies could be blackmailed by similar network controllers in every country in the world.

(Tsv eye CLOSS en Internet.)

#Drosselkom

Twitter hashtag for snark about Deutsche Telekom’s second current scandal, their unilateral decision to choke new flat-rate customers’ Internet tubes after 02 May 2013.

Telekom’s decision against net neutrality might have given permission to its competitors to take similar steps. In April, internet policy activists were concerned that Arcor purchaser and important ISDN competitor Vodafone had started looking into data throttling as well, but that company responded by saying it was not currently considering so doing.

In a 30 May 2013 interview with the Frankfurter Allgemeine Zeitung, the president of the German anti-cartel authority [Bundeskartellamt] said that if Deutsche Telekom planned to allow providers to buy their way out of Telekom’s plans to slow down data to its flat-rate consumers, this might be anticompetitive because smaller providers might have trouble paying the new fees charged to resume normal data access or “purchase a priority treatment” as he put it. Yet the anti-cartel authority had decided to neither investigate nor prosecute for anti-competitive market access limitations in this case, merely to get “the clearest possible picture” of the situation. They were concerned that Telekom provide better information to its customers about whether they were close to exceeding data limits and about which services were counting toward customers’ volume limit (companies have until 2016 to make priority partnership agreements with Telekom to have Telekom stop counting their content toward Telekom customers’ volume limits). Also, the president of the anti-cartel authority said, the networks authority [Bundesnetzagentur] would be determining whether network neutrality was being violated enough to require further investigation. The F.A.Z. noted that Telekom is considered a major market player because it controls ~45% of the German DSL market, with ~12.4 million connections, according to the Bundesnetzagentur.

(DROSS ell com.)

Das Vectoring

In the first of its two current scandals, Deutsche Telekom wants to use so-called “vectoring” technology to reduce interference between bundled strands in copper-wire DSL internet connections by increasing and decreasing signals to balance out a more efficient overall electric signal transmission. “Vectoring” requires the Kabelverzweiger, the “cable brancher” or “cross connect” gray box by the side of the street, to be connected to a fiber optic line. Powerful computing is required at the phone company end to “precalculate” the “error suppression” for all transmissions on all DSL lines in the bundle simultaneously in real time. Maximum efficiency requires one central administration of all DSL lines, by one company in other words.

Telekom claims its vectoring only works when a single company controls all the lines at the gray box; “no other companies could then install their own technology there,” the F.A.Z. wrote, voicing the worry about fairness to companies in competition with Telekom. Fairness at the consumer end is also an issue, inter alia because vectoring requires modems specially modified for vectoring technology. Manufacturers such as AVM are already shipping only “vectoring-friendly” modems.

Just before the long Christmas break in 2012, Telekom submitted a request to the Networks Agency (Bundesnetzagentur, BNetzA) to modify BNetzA rules to allow its vectoring. After receiving the petition, the Bundesnetzagentur asked companies in the sector to amicably agree on solutions amongst themselves in order to reduce regulatory intervention to a minimum. Deutsche Telekom also tried to calm remonopolization fears by e.g. saying that if competitor companies had connected their own fiber optic lines to gray branching boxes, they could use its vectoring technology too. It also had some new last mile products it wanted to rent out to them.

On 15 May 2013 the Bundesnetzagentur issued a draft approving the partial deregulation—which still must be approved by the EU Commission and the regulatory authorities of the Member States which would have one month to review the proposal after BNetzA’s 24 Apr 2013 hearing—allowing Deutsche Telekom and its competitors to use Telekom’s vectoring while imposing conditions intended to mitigate the old monopoly’s sole control of branching boxes, though the items in this list indicate apparently not to mitigate possible data privacy repercussions caused by the central computational process managing the balancing out of every DSL line. These conditions included:

  • Around questionable boxes, at least one other provider must market a fast internet connection, such as television cable.
  • For Telekom to use vectoring at a box, more than one competitor must be connected to that box.
  • Telekom’s competitors in turn are required to use Telekom’s vectoring in all boxes to which they have connected. Does this give Telekom’s servers access to all those end consumers and their data?

Alternatively, non-“vectoring” options for speeding up DSL connections include so-called “bonding,” bundling in which incoming data packets are distributed through two of the usually four available lines of a DSL connection rather than just being sent through one. Routers that can bundle the unsorted incoming packets will have two DSL inputs instead of just one. There is also a “phantom bundling” option that can take two (four-line) DSL connections and use one line from each connection to create a third, “phantom” circuit that will suffice to “modulate up” DSL signals. It is claimed that Deutsche Telekom’s “vectoring” would be faster than these bundling alternatives and/or speed them up by balancing away the signal bleed between copper wires.

Some Germans are concerned that their internet service providers already are claiming internet speeds they don’t actually deliver or secretly throttling cheap connections; to address these concerns the Bundesnetzagentur studied German broadband quality in 2012 and posted a link to a “broadband test” and a “net neutrality test” (that can’t be run on a wireless network) for consumers on an “Initiative Netzqualität” website scheduled to be shut down in late June 2013. The net neutrality test requires Java. Both tests are for stationary internet connections; neither can be run on a mobile network. Speaking of mobile internet: now that Deutsche Telekom has received approval from US antitrust authorities to merge T-Mobile with competitor Metro PCS, they plan to use some of Deutsche Telekom’s new cash liquidity to build mobile infrastructure in the USA.

Datendrosselung

“Data throttling.” Deutsche Telekom, whose subsidiary T-Mobile stood out from other US telephone companies because it was never explicitly mentioned in the press as having given its customers’ data to the George W. Bush administration, has announced that starting May 1, 2013, it will slow down internet traffic for its flat-rate German customers above a low monthly data limit of 75 GB. There will be no appeal. People are furious. Critics say there may be a competition issue because Telekom’s own online content, such as from its entertainment channels, will not count toward the monthly data limit. If so, this might be a case for the Bundesnetzagentur, the German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads (BNetzA).

Update on 30 Oct 2013: A Cologne court forbade Deutsche Telekom to slow down the data supplied to its flat-rate internet customers, in a lawsuit brought by the North Rhine-Westphalian Consumer Protection Agency [Verbraucherschutzzentrale Nordrhein-Westfalen e.V.]. Deutsche Telekom was planning to reduce these household internet connections to as low as <10% of normal surfing speeds.

Süddeutsche.de reported that the court said Telekom could slow down its customers’ internet access but not without changing its current marketing. Without fixing the problem, “Drosselkom” had tried several responses to the outrage sparked by these plans this year, including offering a second more expensive flat rate plan that really, they swore, this time, would not be subsequently decelerated. Competitors 1&1 and Kabel Deutschland have been capping their customers’ internet connections too, SZ reported. They quoted a pundit as saying the Cologne Landgericht’s verdict was important for starting to create limits to contracts that have been being arbitrarily changed by companies. Telekom plans to appeal.

(DOT en DROSS ell oong.)

Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen, BNetzA

German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads, a federal regulation authority tasked with maintaining and promoting competition in “so-called network markets,” according to Wikipedia.

(BOON dess NETZ ah gen tour foor elek tree tsee TATE, goz, tay lay com MOON ee ka TSEE OWN, post oond EYE zen bonn en.)

Leipziger Strombörse

The European Electricity Exchange runs platforms for trading in many power-related markets. It is located in Leipzig and was created by a fusion of Leipzig’s LPX and Frankfurt/Main’s EEX in 2002.

A study commissioned by Germany’s Green Party has announced that while for years now electricity prices have been steadily falling on the EEX, electricity prices have been steadily rising for Germany’s small private consumers. Cost reductions have not been passed along to private consumers and cost increases have. German consumers are paying an estimated EUR 0.02/kilowatt hour too much, totalling three billion euros this year. High-volume customers, such as industrial clients, have meanwhile negotiated lower electricity prices with the utilities and lower environmental contributions with the government. The Bundesnetzagentur has now calculated e.g. that Germany’s biggest electricity customers consume 18% of its electricity but pay only 0.3% of the alternative energy law costs.

Responding to the report, the power companies blamed the flawed system, which they say is politicians’ fault. Also, they say, high prices are caused by taxes and environmental contributions.

ZDF heute journal reports that small private consumers aren’t switching electricity providers enough to create a sense of market competition.

Energiewende

The “energy transition” from nonrenewable energy sources to a sustainable-power economy.

Update on 16 Jul 2013: After Germany began its phaseout of nuclear power by shutting down eight of its seventeen nuclear power plants in 2011 and yet was a net exporter of electricity in 2012 e.g. to France, which kept its nuclear power plants but suffered brownouts, German utility companies are now indicating they are considering shutting down dozens of coal and gas power plants as well because they are not profitable enough in the current renewable energy boom. Power plant operators want to be paid by the government for keeping the power plants available as backups, despite supply-driven reductions in their electricity selling prices. The Bundesnetzagentur can however force them by law to keep the power plants restartable, sans compensation.

(En erg EE venn deh.)

Blog at WordPress.com.