Threats Of Layoffs, National Security Fears Could Scuttle Biggest Ever Defense Merger



Europe’s two largest defense companies have until October 10 to decide whether to pursue a merger that would create the world’s largest defense conglomerate, with annual revenue of 78 billion euros and more than 225,000 employees worldwide.

According to the French business daily Les Echos, the deal would involve a 60/40 capital split between EADS and BAE. The merger concerns not only France, the United Kingdom and Germany, but also the United States, Australia, India, Finland, and Saudi Arabia, among others.

Because of national security implications, the potential merger has been subject to intense scrutiny since it was leaked to the press on Sept. 12.

EADS, the European Aeronautic Defense and Space Company, is a European aerospace and defense company based in Toulouse in the south of France, but with subsidiaries and markets worldwide. It produces civilian and military airplanes, helicopters, missiles, satellites, and command and control systems.

EADS itself was created by a merger between two huge defense conglomerates, the German DaimlerChrysler Aerospace and the Spanish Construcciones Aeronáuticas, in 2000. Its major companies include Airbus, Eurocopter, Astrium, and Cassidian.

BAE Systems is a London-based conglomerate formed in 1999 from Marconi Electronic Systems and British Aerospace. BAE builds aircraft carriers, fighter planes, drones, nuclear submarines, tanks, guns, and electronic defense systems. It is one of the world’s top three arms companies and is a major contractor to the U.S., British, Australian, and Indian governments, among others.

The merger would allow the two companies, which specialize in different areas, to create synergies that could help the bottom line. They would stay largely separate for operating purposes and would be listed separately on the stock exchange.

For BAE, which has not been as successful financially in the past few years as EADS, a merger would allow it to improve its credit rating and overtake U.S. aircraft giant Boeing. For EADS, one of the main motives behind the merger is to make headway in the gigantic U.S. defense market, BAE’s largest customer. BAE has 40,000 employees in the U.S.

However, national defense concerns are one of the main obstacles to the merger. EADS and BAE have promised the German, French and British governments special shares in the newly formed entity, which would allow them to protect their national interests. For example, there would be a guarantee against relocation of factories to other countries, and protection for strategically important functions like France’s nuclear missiles, British nuclear submarines, and BAE’s cyber security contracts with the U.S.

But the French government might lose its current veto power over EADS strategic decisions, or the German government could be given an equal veto. This poses a political problem for French president François Hollande, says Reuters.

And EADS, which is 15% owned by the French government, is “so distrusted in the US that its numerous efforts to work with the U.S. military have failed” except for selling helicopters, according to the Financial Times. The United States is especially concerned about intellectual property theft, and BAE’s contracts with the U.S. Defense Department could suffer.

Another potential problem is labor relations. Mergers typically involve layoffs, and British workers, who tend to be Euro-skeptics, are concerned about being targeted for layoffs ahead of better-protected French and German workers. British politicians have promised to examine the merger thoroughly, writes the Telegraph.

The markets also reacted unenthusiastically to news of the possible merger. According to the Wall Street Journal, EADS and BAE shares have both dropped in value since the announcement.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.

But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!