US embassy cable - 05VIENNA3679

UNCLAS VIENNA 003679 
 
SIPDIS 
 
E.O. 12958: N/A 
 
TAGS: ETRD, ETTC, EIND, ECON, AU 
SUBJECT: STEYR-MANNLICHER PLANS TO PHASE OUT ASSAULT 
 
WEAPON PRODUCTION IN AUSTRIA AND SELL TECHONOLOGY 
 
 
Summary 
 
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1.  According to press reports, Steyr-Mannlicher GmbH 
 
plans to phase out production of military weapons at its 
 
Austrian facility.  Steyr-Mannlicher will also reportedly 
 
divest its Malaysia-based production during the first 
 
quarter of 2006 and sell its weapons production 
 
technology.  The company's CEO, Wolfgang Fuerlinger, 
 
cited legal and bureaucratic hurdles in obtaining export 
 
licenses as a major reason for his decision to stop 
 
military weapons production in Austria. End Summary. 
 
2.  The November 15 edition of the financial daily 
 
"Wirtschaftsblatt" reported that Steyr-Mannlicher had 
 
decided "some time ago" to phase out Austrian-based 
 
production of its STG 77 attack rifles.  According to 
 
Wirtschaftsblatt, Steyr-Mannlicher currently produces 
 
"only a few rifles" for the Austrian army and for an 
 
Irish order.  Steyr-Mannlicher will continue to produce 
 
hunting and sports weapons in Austria. 
 
3.  Steyr-Mannlicher has operated its Malaysian 
 
production facility as a joint venture with the Malaysian 
 
National Aerospace and Defense Industries (NADI) since 
 
April 2004.  In September 2004, Amnesty International 
 
released a press report maintaining that Steyr-Mannlicher 
 
had effectively circumvented the EU's Code of Conduct on 
 
Arms Exports by producing combat weapons in Malaysia, 
 
from where Steyr could export to "any country in the 
 
world."  Currently, Fuerlinger is apparently conducting 
 
talks with two unnamed consortiums that are interested in 
 
purchasing the Malaysian plant.  The Malaysian plant has 
 
a capacity of 30,000 rifles per year. 
 
4.  Fuerlinger claimed that Steyr-Mannlicher "had never 
 
requested export licenses for nations in conflict or 
 
under embargo."  Nevertheless, he complained that 
 
Austrian ministries had often held up legitimate export 
 
license requests.  Fuerlinger told Wirtschaftsblatt that 
 
in such cases, Steyr-Mannlicher had to resort to costly 
 
and lengthy legal action to obtain the licenses. 
 
5.  If Steyr-Mannlicher carries through with its plans, 
 
it will still have two plants in Austria and one in the 
 
U.S.  Despite the potential sale of its weapons 
 
production technology, Steyr-Mannlicher will reportedly 
 
expand its product range to include four types of hunting 
 
rifles under the Mannlicher label, three models of 
 
precision rifles and one pistol model under the Steyr 
 
brand name, as well as "various new products." 
 
VanVoorst