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Rumor: HK might be a contender for a joint Sweden/Finland rifle contract.

Barn Owl Lover

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The Firearm Blog found in basically the last paragraph about Sweden procuring some armored or tracked vehicles that Sweden will be looking to announce the winner for a contract for a new service rifle. Also, this rifle will be purchased jointly with Finland. Sweden wants to replace their FN FNC-based AK5 and HK G3/AK4 rifles, and Finland want to phase out their Valmet RK62 and Sako RK95 rifles.

Of note is that in the article it's hinted that the HK433 might be looked at, as well as maybe the 416 if both countries agree on 5.56mm NATO as the main caliber (Finland mostly uses 7.62x39mm). There's also some suppositions that the 7.62x39mm 433 might see the light of day if Finland keep that caliber. Of course, this is all speculation, but could be interesting to watch.

 

Barn Owl Lover

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On that same TFB article's comment thread, someone with ties to the Swedish Army does believe that an HK rifle is the preferred option. If so, it'll likely be the 416 or 433, and may depend on price and how soon HK can deliver. If HK are confirmed as the winner of the German tender, that'll strain production further unless they license production to like Bofors, or they do have some production capacity reserved for the German tender.
 

Barn Owl Lover

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I do wonder if such orders will lead to HK expanding production (if the win both this and the German tenders, both German Army and German police compact carbine competitions), or if HK will finally license production of some of their firearms to a company like Bofors?
 

Guyanaman1963

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I do wonder if such orders will lead to HK expanding production (if the win both this and the German tenders, both German Army and German police compact carbine competitions), or if HK will finally license production of some of their firearms to a company like Bofors?
Just curious, but is Bofors out of buisness? Didnt they bribe some politicians to get a contract?
 

Barn Owl Lover

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I'm not sure about Bofors being totally out of business, but I doubt they make small arms anymore (just like Nexter in France doesn't make small arms). Actually, BAE Systems owns Bofors as far as the heavy weapons division, while Saab owns the missile/rocket division. Licensed production in Sweden would probably now involve Saab, but they don't make small arms either, unless you call rocket launchers and recoilless rifles small arms.
 

Skandar

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I'm no expert on business, but it seems to me that HK needs to do one of three things:

  • Increase their production capacity with resultant expenditure of capital and acceptance of risk (should they not get follow on contracts)
  • Forego accepting contracts beyond current capability (which would pretty much kill them long term in this day and age...these are military weapons, not Ferraris)
  • License production elsewhere and accept the "status" hit of either allowing those weapons to be HK branded or not have them be HK branded
If it were me, the third is the only attractive option. Especially with the HK416 as it's a "legacy" item at this point, and the HK433 as it seems to be to some degree a "budget" HK. I'd allow license production of 416s, 433s, and VP9s for that matter. It gets HK more revenue than if they pass on the contract, doesn't have the risk associated with production expansion, keeps the "boutique" HKs in house, and HK could keep a certain volume of 416, 433, and VP capacity in house for their German contracts, the excess of which could go on the open market at a premium as a "real" HK, not a contract version. If sales really take off they would have a termination timeline in the licensing and bring all that production back in house if they wanted.
 

Barn Owl Lover

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Unless they want to expand their factory or build a second one near by, they'll need to possibly license production to keep up with demand if they don't want to pass up any more contracts. Of course, things that may complicate that are German "weapons of war" laws and rules, and HK not wanting to get burned on licensed production like what happened with Iran following the revolution there. Though with Sweden and Finland you have two officially neutral countries (though leaning more towards NATO than say, Russia), that would seem to be less of a problem.

Granted, I don't think that HK thought that the 416 would take off like it did, believing probably that only Norway and the USMC would use it for general issue along with elite law enforcement and armed forces spec ops. But then came the G36 controversy, and the trend where some countries (notably France, Belgium and some others) decided that their spec ops weapons (416 and SCAR 16 respectively) were good to go for general issue to the main army.
 

Guyanaman1963

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I dont know, but i find it hard to believe HK would miss the boat on projections of the 416. Thats bad, bad, bad planning on their part. You dont create a product expecting it to fail.
I was under the assumption they licensed B&T, MKE and others to create the MP5? So why not explore that avenue with a Co-Brand HK being dominant?
Either that or open a second factory dedicated to small arms and the other dedicated to filling government contracts.
I get its a tremendous investment, but one that I wager would allow them to make more money to offset the expansion costs.
the alternative is to stay stagnant without any growth.
I have been involved with several acquisitions and seen companies that refuse to grow... because “we are big enough” Or just didnt have the capital to grow... Those companies were bought out and no longer exists.
M.
 

Barn Owl Lover

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We do have to remember that the 416 was and is a pricey rifle. But one thing I didn't think HK expected until the G36 debacle at least, was that so many would become willing to drop the coin for lots and lots of 416s. It's fairly quickly become one of the more popular 5.56mm rifles with armed forces looking to update their armories. Not even the FN SCAR has had as much success in that area in recent times that the 416 has had. That and people it seems are willing to pay for the HK name and prestige. As well as the fact that where as HK have shown some willingness to upgrade and build rifles to an army's or agency's specs (including adopting an MLok handguard option for the 433 and possibly the 416/417 soon), FN haven't updated the SCAR in years, and it's still go a quadrail handguard.

You play to the market, you're going to get a lot of demand. I believe that's why LMT have had success with contracts, as it seems that they're willing to build to whatever customers want and back it up with plenty of support. Not saying that FN doesn't, but it seems that HK are willing to play that game better, and had a good weapon to start with on top of that.
 
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