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Canada's largest military contractors in 2001. (Spotlight on Canadian Military Exports).

Canada's ten largest military contractors in 2001 were unchanged from the equivalent ranking for 2000 -- only the companies' relative positions differed. (See Table 1 and The Ploughshares Monitor, December 2001, pp. 9-11.) The minimal changes between the two rankings reflect the stability of the top echelon of the Canadian military industry. Although some adjustments have arisen out of mergers and changes in ownership, production sites, product lines, and market shares have largely continued without significant alteration. Canada's Department of National Defence and the US Pentagon remain by far the largest customers of Canada's military industry and it is the size of sales to these markets which chiefly determines position in the annual ranking. Nevertheless, most companies also export military goods to Europe and beyond, including states in the South (see column E of Table 1).

* General Motors Defense Canada retained its unrivalled position as Canada's largest military contractor in 2001 for the fifth year in succession. The General Motors subsidiary -- based in London, Ontario -- produces several variants of a Swiss-designed light armoured vehicle (LAV), and recent orders from Australia and especially from the US Army have bolstered ongoing deliveries to Saudi Arabia and Canada's Department of National Defence. Estimated sales totalled $831 million in 2001, with about two-fifths of these due to production of Armoured Personnel Carriers for the Canadian Army and the remainder made up of export sales. According to Canada's report to the United Nations Register of Conventional Arms, during 2001 Canada delivered 121 LAV Ills to the Department of National Defence and 19 LAV Ills to Saudi Arabia. Although not detailed in the UN Report, the latter are likely deliveries of Assault Gun LAV variants equipped with 90 mm cannons to the Saudi Arabian National Guard.

Company export sales for 2001 also likely include first deliveries of Stryker LAV Ills to the US Army for its new Brigade Combat Teams. The Stryker armoured vehicles, production of which is shared equally by GM Defense in London and General Dynamics Land Systems in Michigan, are key to the deployment of the US combat teams "anywhere in the world in 96 hours." The London plant could eventually supply over 1,000 Stryker vehicles worth up to $3 billion.

* With military sales of $581.3 million reported in the company's annual report, Canadian-based CAE Inc was the second largest military supplier in 2001. The company's Military Simulation and Training Division, with operations in Canada, Australia, Germany, the UK, and the US, provides military training to armed forces worldwide. Its Marine Controls Division supplies computer-based equipment monitoring systems for warships. During 2001 CAE sold or delivered naval systems to India, South Korea, the UK, and the US.

* Bombardier Inc of Montreal was ranked third largest Canadian military contractor based on service and equipment sales to the military in Canada and overseas. The company supplies aircraft and services for Canadian and NATO pilot training programs, the latter involving flight training for air force pilots from Denmark, Italy, the UK, and non-NATO member Singapore. It also services CF-IS fighter aircraft for the Canadian forces. During 2001 Bombardier delivered aircraft to the armed Forces of Denmark, Greece, Mexico, and the UK, as well as mobile bridge equipment to the US Army.

In the 2002 edition of its yearbook, the Stockholm International Peace Research Institute (SIPRI) ranked CAE and Bombardier among the 100 largest arms-producing companies worldwide in 2000. As a subsidiary, General Motors Defense Canada is not ranked by SIPRI but it is listed in the middle of the ranking based on the size of its sales.

* Fourth-placed General Dynamics Canada is a subsidiary of US military industrial giant, General Dynamics, number six in the SIPRI global ranking for 2000. Formerly Computing Devices Canada, the company sold an estimated $291 million in military goods last year. At plants in Calgary and Ottawa, the company produced tactical communications equipment and acoustics upgrades of surveillance aircraft for the Canadian Forces. The company also exported naval and army equipment to Portugal, the UK, and Sweden.

Total military sales of the four largest Canadian-based companies exceeded $2.2 billion in 2001, more than double the sales of the next six largest Canadian military suppliers.

* The SNC-Lavalin Group, a large engineering firm based in Montreal, generated $230 million in military sales in 2001, largely due to ammunition production by its SNC TEC subsidiary. A long-standing supplier to the Canadian government, SNC TEC sells small and large calibre ammunition and components to the US and, according to company reports, to "a large number of other countries" in Europe, the Middle East, and the Far East.

* Magellan Aerospace Corporation of Mississauga is the parent corporation of Canadian companies Bristol Aerospace in Winnipeg, Chicopee Manufacturing in Kitchener, Fleet Industries in Fort Erie, Orenda Aerospace in Mississauga, and Orenda Recip in Debert, Nova Scotia as well as a number of US subsidiaries. Supplies of military aircraft components and other military sales totalled about one-third of its revenue in 2001.

* Pratt & Whitney Canada of Longueuil, Quebec is a subsidiary of United Technologies Corporation, the world's 11th largest arms-producing company. It builds turboshaft and turboprop engines for civilian and military aircraft markets. In 2001 the company exported aircraft engines for military use to the US, Greece, Korea, Mexico, and Spain.

* Formerly the publicly traded Canadian Marconi Corporation and then BAE Systems Canada, CMC Electronics in 2001 became a private company controlled by an investment group of Canadian-based ONCAP LP. The company's sales of military communications and avionics equipment make up an estimated 40 per cent of total sales. During 2001 the company reported military sales to the Department of National Defence, Germany, Spain, South Korea, and the US.

* Bell Helicopter Textron Canada is a subsidiary of Textron Inc, the US company which ranked 27th globally among the largest arms manufacturers in 2000. At its site in Mirabel, Quebec, Bell Helicopter produces a range of helicopters primarily for the commercial market. In 2001 it received more than $50 million from the Department of National Defence, mostly related to the Canadian Army's Griffin helicopter program. It received at least the same amount for sales of helicopters for military end-use to Saudi Arabia and the US Army.

* Heroux-Devtek Inc is the company formed in 2000 by the merger of Longueuil-based Heroux Inc and Devtek Corporation of Markham, Ontario. In 2001 the new company reported military sales in excess of $100 million, largely of aircraft landing gear systems to the US Air Force and Navy. Subsidiary Diemaco Inc produced automatic rifles and related systems for the Canadian and other NATO armies.
Table 1

Top 10 Canadian military contractors in 2001

Company head office/main plant A B C D E F G

General Motors Defense, London 1 4 1 Y Y Y T
CAE Inc, Montreal 2 11 Y Y E
Bombardier Inc, Montreal 3 2 Y A
General Dynamics Canada, Nepean 4 13 7 Y Y E
SNC-Lavalin Group, Montreal 5 3 2 Y R
Magellan Aerospace Corp, Mississauga 6 6 Y A
Pratt & Whitney Canada Corp, Montreal 7 13 Y Y A
CMC Electronics Inc, Montreal 8 12 4 Y Y E
Bell Helicopter Textron Canada Ltd, Mirabel 9 Y Y A
Heroux-Devtek Inc, Longueuil 10 3 Y A

Company head office/main plant H

General Motors Defense, London 831
CAE Inc, Montreal 581 *
Bombardier Inc, Montreal 497
General Dynamics Canada, Nepean 291
SNC-Lavalin Group, Montreal 230
Magellan Aerospace Corp, Mississauga 194
Pratt & Whitney Canada Corp, Montreal 149
CMC Electronics Inc, Montreal 135
Bell Helicopter Textron Canada Ltd, Mirabel 110
Heroux-Devtek Inc, Longueuil 108 *

Legend

(A)Ranking within largest Canadian military contractors using company
financial period closest to calendar year 2001.

(B)Ranking within largest Canadian Department of National Defence prime
contractors for fiscal year 2001-2002.

(C)Ranking within largest military export prime contractors for fiscal
year 2001-2002 as brokered by the Canadian Commercial Corporation (1)
(CCC).

(D)Estimated or reported military sales greater than 20 per cent of
total company sales.

(E)Reported military sales or deliveries from Canada to one or more
Third World countries during 2001.

(F)Foreign-owned or controlled.

(G)Commodity-classification of major military products (A - Aerospace, E
- Electronics, T - Transportation, R - Armaments).

(H)Estimated total value of military sales in millions of Canadian
dollars for 2001 or closest financial period, compiled from Canadian
Military Industry Database data and files. For Canadian-owned companies
this includes military sales of foreign subsidiaries (* indicates the
company reported a value for its military sales).

(1)The Canadian Commercial Corporation (CCC) is an Ottawa-based crown
corporation which assists Canadian companies with export sales to
foreign governments and international organizations. Typically, over 60
per cent of CCC brokered sales are purchased by military agencies.
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Author:Epps, Ken
Publication:Ploughshares Monitor
Date:Dec 22, 2002
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