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Urs Loher (57) had only been in office for five weeks and the new head of the federal company Armasuisse was already faced with procurement problems. There are delays in the delivery of the Hermes drone from the Israeli defense company Elbit for the Swiss army. The Israeli arms company Elta is also having a hard time. It is a provider of radar and electronic warfare technology.
Due to the war between Israel and the terrorist organization Hamas, both companies will no longer deliver as planned this year. The six Hermes drones ordered alone represent a company worth a quarter of a billion francs. Further consequences of the conflict for deliveries from Israel are currently unclear. One thing is clear: the war in the Middle East has reached the Swiss army.
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This article was first published in the paid service of Handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
But as serious as the delivery delays are, Loher has a much bigger task ahead of him at home. It’s not just about delays in the delivery of individual devices, it’s about the future of the Swiss military. This urgently needs to be modernized and prepared for the threats of the 21st century. The defense apparatus has major gaps, for example when it comes to drones, robots and artificial intelligence. For the first time, the arms chief speaks about his vision for a new Swiss weapons base.
More weapons-related Swiss supply companies should fill the gaps in the military. This will succeed if Armasuisse, together with the local industry, achieves a certain degree of independence from critical supplies from abroad. Simply to ensure that the army can defend itself and hold its ground in an emergency. That is what Armament Chief Loher is committed to: “I came from the industry to solve this.”
Indispensable in supply chain
Before his role as head of the procurement authority, he was head of Switzerland for French defense supplier Thales and before that CEO of Rheinmetall Air Defense. He knows the conditions for a functioning private arms industry and would now like to see a more effective army in his public position, ‘an army that can remain intact for as long and as autonomously as possible’. And industry, which is essential in international supply chains to strengthen the military.
This is not just Loher’s wish, it is his mission. Since the Russian attack on Ukraine in February 2022, it is clear that the importance of its own industry and army has increased. Especially now that war is breaking out in the Middle East. But this has not happened enough so far. Now the Armasuisse boss is completely rethinking Swiss arms policy and Swiss industry.
Army needs under review
The Armaments Authority, together with the Swiss Federal Institute of Technology (ETH) and the University of St. Gallen, is currently evaluating what are the most important elements for the military and the potential opportunities for the arms industry in Switzerland in general. The results can be expected in the coming months.
It’s about figuring out what the military needs to keep its systems up and running. And to position the Swiss arms industry in international supply chains as a world first. It is envisaged that Switzerland will no longer be an integral part of the global defense industry in the future.
To achieve this, the Armasuisse boss wants to increase interdependencies in this area and thus make Switzerland an indispensable player, not only domestically, but also for export target countries and major defense companies. American fighter jets and German submarines should fly and dive with Swissness. Compensation deals and corporate contracts are one way to achieve this; the other way is to use more financial resources to build the industry domestically.
Loher is considering repairs and improvements to older tanks, but also prototypes of various military devices from the university workshop. But also integral IT and communication solutions for the army. “Especially in the IT field, we have excellent companies in Switzerland that can provide us with appropriate support,” says the armament chief.
He thinks even bigger, about automated sensor systems, robots, drones, artificial intelligence and quantum technology, where Switzerland already plays a leading role. This should also affect the military and the local arms industry. A plan for the next ten years.
Significantly more counter-trading in demand
The plan also includes the significant expansion of counter-transactions, so-called offsets: Switzerland orders war materials, the foreign supplying company awards orders to the local industry equal to the order value. In this way, the purchase price should be compensated and companies should benefit from it.
The idea is not new, but the quantity and implementation are not yet correct. The drone deal with Israel is such a counter-deal. Many orders to Swiss companies in exchange for this delivery are still missing – amounting to a figure of three figures in a million. Two-thirds of the compensation is still missing in the counter deals for the F-35 fighter jet. Urs Loher wants to change that, place concrete orders in his own country and arrange more compensation for future arms transactions today.
Time is of the essence, as suppliers and production for the military sector have suffered greatly in Switzerland in recent years: export conditions have deteriorated, laws have been tightened, export requests have been rejected. Companies such as Ruag, Rheinmetall, Elbit and Mowag had to wonder what Swiss added value they could get if there were no domestic orders. The incentives for new companies in the Swiss defense sector have become smaller.
“Strategic Industrial Reserve”
The recent sale of 25 Leopard 2 tanks to Rheinmetall shows how counter-deals can work with a greater focus on Swiss industry. The deal has long been blocked by questions about whether it would violate neutrality by contributing to arms sales to warring Ukraine.
The deal was politically approved, Ruag makes money from it, receives maintenance orders for the tanks and also gains Rheinmetall’s know-how for future increases in the combat performance of active tanks in its own army. For the armament chief, the federal company represents “a strategic industrial reserve”.
Such a business is part of Loher’s three-step plan: First identify the products you need. Secondly, connecting existing companies in Switzerland with the right skills. And thirdly: bring missing knowledge to Switzerland. A kind of settlement and settlement policy for the Swiss arms industry, if you like.
Arms industry man Loher doesn’t really understand why this hasn’t been done this way for a long time. He does not spare his criticism: “This approach could have been considered before the new fighter jets were purchased. So before you have signed the contract.”
Orders are necessary for perspective
What is still needed, according to Loher, is a perspective for the industry. “And if you want perspective, you need orders.” You should therefore not only focus on the specifications of a tender, as was previously the case. But also involve the industry from the start of the purchasing process. In Loher’s words, “It’s not just about cooking a dish and going through the list of ingredients, but about coming up with an entire menu.”
According to Loher, this also includes adjustments to the law for the export of military equipment from Switzerland. In Europe, people have already realized that they need to act together in this regard, the Armasuisse boss said. Switzerland is completely isolated here and is no longer considered reliable. “We have to change that.”
Source:Blick
I am Liam Livingstone and I work in a news website. My main job is to write articles for the 24 Instant News. My specialty is covering politics and current affairs, which I’m passionate about. I have worked in this field for more than 5 years now and it’s been an amazing journey. With each passing day, my knowledge increases as well as my experience of the world we live in today.
