{"id":26365,"date":"2016-10-12T09:00:00","date_gmt":"2016-10-12T09:00:00","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2016\/10\/12\/interview-with-herve-guillou-ceo-of-french-shipbuilder-dcns\/"},"modified":"2026-08-07T22:18:11","modified_gmt":"2026-08-07T22:18:11","slug":"interview-with-herve-guillou-ceo-of-french-shipbuilder-dcns","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/naval\/2016\/10\/12\/interview-with-herve-guillou-ceo-of-french-shipbuilder-dcns\/","title":{"rendered":"Interview With Herv\u00e9 Guillou, CEO of French Shipbuilder DCNS"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">PARIS\u00a0\u2014\u00a0<\/span>Herv\u00e9 Guillou, chairman and CEO of shipbuilder DCNS, is a keen yachtsman with his own sail boat. That attachment to the sea is reflected in Guillou&#8217;s decision to start his career with the then-Direction des Constructions Navales in 1978, before moving on to government and industry posts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In an interview with Pierre Tran of Defense News, Guillou reflected upon influences in today&#8217;s naval market: tougher foreign competition, and the\u00a0French\u00a0Navy&#8217;s winning a share of an expected increase in the defense budget to fund\u00a0a planned intermediate frigate and a future nuclear ballistic missile submarine.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DCNS, majority owned by the government, will be a major exhibitor at the Euronaval trade show, which opens Oct. 17.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>Q. What are the biggest changes since the previous Euronaval trade show?<\/b><\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><b>A.<\/b> There have been two big changes. The bigger change is the return to growth in defense budgets towards 2 percent [of gross domestic product]. The budgetary shift in two years is amazing. The navies and clients have realized they need to respond to the return of the great powers\u00a0\u2014\u00a0Russia has boosted its huge defense budget; China builds a submarine every four months, a frigate every three months. That&#8217;s without talking about India and other countries. <a name=\"_GoBack\"><\/a>\u00a0That is fundamental change. That justifies the French Navy&#8217;s high priority requirement for 15 first-rank frigates, nuclear attack submarines and [the retention of a] nuclear deterrence. <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are budget increases in Germany, Britain, Poland and the other NATO countries, which committed in July [to spend 2 percent of GDP on defense]. There has been a rise in crises around the world.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>Q. What&#8217;s the second big change?<\/b><\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><b>A. <\/b>The second big factor for industry, and for the client, is aggressive foreign competition.\u00a0There are three US companies in the naval sector, BAE and then us, DCNS. The level is \u20ac3 billion (US $3.4 billion) annual sales. What&#8217;s new in the last five years is the companies above the three billion mark. There is the Russian OSK, CSSC from China, soon there will be a company from India, Korea, and Japanese Mitsubishi. That will profoundly change the competition. These companies, unlike the too fat, too slow US firms, attack markets directly. The US mostly sell secondhand ships, or go through [foreign military sales]. The newcomers are very aggressive. Russia is selling to Egypt, China is selling to Pakistan, China into Africa, Korea everywhere. They all have the ambition of securing a place in the market.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>Q. What are other major factors on the naval front?<\/b><\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>A.<\/b> There has been a huge acceleration in the technology cycles\u00a0\u2014\u00a0two years ago, there was little talk about digital technology. There is a huge challenge not to miss the technology leap.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">This is not [a] marketing issue. This is a life or death issue for navy crews.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">Twenty years ago, we didn&#8217;t have a cellphone. In 20 years&#8217; time, there will be three or four intermediate frigates, with 6G, 7G or 8G smartphone technology available. Warships have 40 years of operational life. Thirty years ago we started with a policy of a midlife upgrade to avoid obsolescence of combat systems. In the future we will need to upgrade permanently or face technology problems.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">The first intermediate frigate will be delivered in 2023 when we will be at 6G. When it retires from service we will be at 12G. Then there is energy technology\u00a0\u2014\u00a0batteries, air-independent propulsion, big data and digitalization with predictive maintenance, 3-D manufacture, onboard data center, cyber technology, and telecommunications.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The studies on the intermediate frigate are on a digital platform shared by DCNS, DGA, the Navy and Thales. DCNS has launched a \u20ac170 million, five-year digital transformation to change engineering and computerized-design capability and database. The first order was in October 2015, the second with Dassault Syst\u00e8mes in February.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>Q. How important is defense in the political world?<\/b><\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>A.<\/b> We&#8217;re at a turning point. It is primarily a political decision, but we can anticipate that the French 2 percent should help fund the increase in work for the nuclear deterrence. Then there is building the first-rank frigates and nuclear attack submarine. And the third priority is maritime security.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For industry, there is need for work to maintain our know-how. Work on the Australian submarine program will plug most of the gap between the Barracuda nuclear attack submarine and the next-generation nuclear ballistic missile submarine.<br\/><\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">The intermediate frigate will allow the French Navy to have a first-rank frigate. That is the importance of signing the contract by the end of the year for a delivery from 2023. The two important projects are launching studies for the third-generation nuclear ballistic missile submarine and the intermediate frigate production contract.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>Q. There is a forecast annual \u20ac5 billion-\u20ac6 billion for work on the next-generation nuclear deterrence compared to the present annual \u20ac2.5 billion-\u20ac3 billion. What effect will this have on DCNS?<\/b><\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>A.<\/b> Is the warhead, the missile infrastructure in there? The submarine is just a part of that.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">There is also the importance of an annual \u20ac1 billion budget for research and development, reflecting the acceleration of technology change.\u00a0 We will be dinosaurs in 10 years without the digital ship. The intermediate frigate will be the digital ship with all the digital systems onboard.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here is a comparison: A warship has 23 million lines of real-time code, 10 times more than the A400M.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>Q. What are the lessons learned on the leak of information on the Indian Scorpene submarine?<\/b><\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\"><b>A.<\/b> The French authorities are investigating to see the exact nature of the documents which were illegally published. As this stage, there was not a problem of top-secret information. The information was not classified, it was a low level\u00a0\u2014\u00a0restricted distribution. We believe there is no real operational consequence.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">This was an attempt to damage. The Australian court concluded this was an illegal publication. The file that was built and shown\u00a0\u2014\u00a0not handed over\u00a0\u2014\u00a0to the press; [it] was fabricated from various sources to damage France, DCNS and the client.<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span lang=\"EN-GB\">We have filed a complaint in France and the authorities are now conducting an investigation.\u00a0 .<\/span> <span lang=\"EN-GB\"><\/span> <br\/> <br\/><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It was clear this publication was intended to create a crisis. This was clearly intended to hurt. It was economic warfare.<br\/><\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\"><b>Q. What are the labor aspects of the Australian Barracuda Shortfin artificial intelligence submarine program?<\/b><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><b>A.<\/b> This indicates work for about 4,000 staff in France in the development phase at DCNS and subcontractors, which fills a gap between the Barracuda (nuclear attack submarine) and the nuclear ballistic missile submarine. It is too early to give the definitive number of jobs. There will be work with technology transfer, adapting the infrastructure in Adelaide and the supply chain. There is the sophisticated combat information system which will be compatible with [International Traffic in Arms Regulations], Australian secret and [French] secret classifications. There will be 2,900 Australian jobs among which 1,700 [will be] in shipyards in Adelaide and 800 in the supply chain. We help to structure a sovereign Australian naval branch.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The CEO of DCNS sees as key factors tougher foreign competition and the French Navy&#8217;s winning a share of an expected increase in the defense budget to fund a planned intermediate frigate and a future nuclear ballistic missile 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