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FRES – British to its Bootstraps Part 2

General Dynamics Scout SV

Does anyone remember last year, following the announcement that General Dynamics had been selected for the FRES Specialist Variant, the phrase British to its bootstraps?

At the time I did question this, given the vehicle was to be based on the ASCOD and have most of the main components provided by non-UK organisations, creating a post on just that subject. Click here for a refresh.

In the General Dynamics press release, archived here, a number of claims were made by Dr Sandy Wilson (President and Managing Director of General Dynamics UK), for example;

the best value for money for the British taxpayer and the best deal for the UK Industrial base.


The ASCOD SV programme is British to its bootstraps, delivering a Military off the Shelf vehicle with British design by British engineers to the British Army while safeguarding or creating 10,600 jobs for British workers

Lord Peter Levene weighed in with;

a decision we believe will sustain the British tank industry for future generations

With me so far, ASCOD is the saviour of the British tank industry, will secure thousands of jobs and is absolutely British to its bootstraps.

Now all this sounds excellent but a Parliamentary Answer to a written question tabled by Ben Wallace, the MP for Wyre and Preston, ex Scots Guards Officer and former director of QinetiQ would seem to be backtracking.

Ben Wallace (Wyre and Preston North, Conservative)

To ask the Secretary of State for Defence what obligations his Department has placed on General Dynamics to manufacture and assemble the Scout Specialist Vehicle in the UK.

Given the bold statements above, the answer is a bit of a shocker.

Peter Luff (Parliamentary Under Secretary of State (Defence Equipment, Support and Technology), Defence; Mid Worcestershire, Conservative)

The Ministry of Defence has placed no contractual obligations on General Dynamics UK (GDUK) to manufacture the Scout Specialist Vehicles (Scout SV) platforms in the UK. GDUK has, however, indicated that a significant proportion of the activity may be conducted in the UK.

In addition, the contract allows for the transfer of the assembly integration and test work on the platforms from off-shore facilities, to the Defence Support Group in the UK. A value for money decision on whether to transfer this work will be taken later in the programme, closer to production. An enabling arrangement for industrial participation has also been put in place with General Dynamics, that will see work being carried out in the UK, or assistance being provided to UK exporters to Spain (assembly of ASCOD, the base vehicle for Scout SV is currently conducted in Spain)

Have I missed anything?

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50 Responses

  1. Personally given the size of orders we are likely to place, I don’t care where things are built. UK industry needs to sustain itself through exports and not rely on the MoD any longer. If something can be built in the UK and delivered for the right price then fair enough. But if it can be deliver cheaper and on time from partly or wholy oversea manufacture the so be it.

    If it is politically sensitive for the UK to place orders overseas then it is upto the Government to provide funding at a level that will allow the MoD this option. The Government must decide, but also be honest with prople when announcing and explaining decisions regarding orders, which I know is an alien idea to many Politicians and Advisors.

  2. Lord Jim: fair enough. But for 5 years of development and half a billion quid, we could have developed it ourselves…

  3. Buy British to secure thousands of British jobs in an industry that can’t make anything competitive enough to win exports, at the expense of thousands of British jobs in the military which need to go in order to pay for all that British kit; all so we retain the option of buying some other piece of overpriced British-made kit in the future.

  4. Obviously if British kit is pricing itself out of the market then the MOD has no choice but to look to overseas suppliers. The trouble is, similar things happened to British civil industry with militant unions in the 70’s and 80’s. Auto, steel, and heavy industry’s died a slow death whereas in Germany and Japan, who’s heavier industry’s also suffered from unionism, kept their industry’s intact and now Japan in particular is well placed to benefit from the huge potential boom in car customers in China and India, indeed all Japanese car makers are looking to team up with start-up car companies from those countries with potentially enormous profits as a result.

    It’s been repeated so many times, that Britain needs to retain the ability to manufacture it’s own military kit, that it’s almost a cliché. This isn’t always down to nationalist flag waving and little islander thinking. There are very good reasons, economic and military, why any large country, not just Britain should retain both a healthy civilian and military industrial base. not least because, as I think was mentioned in another thread, why would the likes of Saudi Arabia, and other potential customers, buy from us if they see us buying off the shelf non British kit ourselves?

    Obviously this all depends on weather British military manufacturing can be made competitive which is a very big “if” and something I have my own views, but that’s a debate in it’s self.

  5. The thing is, we arent retaining a healthy British Industrial sector, we are maintaining a fataly wounded one.

    We need a serious sit down, where we work out what we want, and far more important, what we are willing to spend to get it.

    As I never get bored of saying, the assembly value of an iPod retailing for $300, is $4, the design value is $80.

    Is the UK going to suffer horribly if the UK designs an armoured vehicle, and Singapore or Korea build it?
    Viking, if we ignore its complete and total unsuitability for Aghanistan is a great little vehicle, built by Singapore.

    The current system aint working.

    47 nations build armoured fighting vehicles
    We aint gonna struggle for suppliers in peace time, and if we maintain adequate stocks, no war is going to last long enough for any supply disruption to matter.

    5 build fighters, 4 more in a coalition.
    6 build nuclear submarines.

    Salami slicing…..

  6. Hang on a fcuking minute… It was the fact that GD had stated the FRES SV would be assembled at a new plant in Wales, compared to BAE’s decision to assemble its CV90 derived FRES SV in Sweden. A decision it changed too late!

    The other factor was price, if it turns out that the price goes up if manufacture takes place in the UK, then we have been double duped. I think we need an independent investigation in to this along with:

    Nimrod mra4 cancellation
    FSTA contact
    T45 reduction to 6
    Reduction Typhoon numbers

  7. Bob Ainsworth in March ’10: “General Dynamics UK’s proposed solution contains 73 per cent UK content within the supply chain and the assembly, integration and test facilities at the Defence Support Group Donnington. This ensures the sustainnent of UK jobs, UK skills and UK capabilities within the armoured vehicle sector”

    It would be rather disappointing if this was only a nod and wink agreement rather than a contractual arrangement. Was there fair competition? A legal challenge from BAe perhaps?

  8. i’m registered on jobsite for the wales region and can’t confirm actual numbers but there are engineer jobs on offer, with GD for the SV project

  9. I have said for a long time that our forces, and thus or ordering power has dropped below critical mass, and that to get value for money for the armed forces thus requires a divorce from any fantasy of “defence industrial strategy”.

    Whether ASCOD or CV90 there was always going to be options to build in current geo-location of manufacturer, but “integrate” bits in the UK (radios, computers, turret integration etc).

    What I personally feel that we missed altogether was the bigger, holistic view of potential future operations. Who have we worked alongside in Afghanistan ? Danes, Dutchmen, Norwegians and others who operate CV90. If we are to operate outside of NATO in coalitions of the willing, who do we tend to operate with ? Northern Europeans who tend to pop like Sweden and Finland, who would be CV90 users. When was the last time we did joint ops with Spain or Austria ? Just asking…….

    OK I am over-simplifying things to a degree, all these CV90 users have different turrets, but how much of the drive train, wheels, suspension and other “spares” could be swapped around in dire circumstances, if required ?

    God forbid we should put military utility over jobs in a certain MP’s ward !

  10. ehmm
    “Viking, if we ignore its complete and total unsuitability for Aghanistan is a great little vehicle, built by Singapore.”

  11. The big caveat with my point is that all programmes need to keep budgets in check. Give the amount we are paying for FRES (SV) I really hope we get a decent platform out of it. It may also have export potential as a family of vehicles both to existing ASCOD users and new ones But I am a natural cynic and have a feeling we have been down this road before. One problen I suppose is many nations have developed and use wheeled recce vehicles and so the MoD wanting a new tracked design immediately made it to some extent bespoke. If we are going to invest so much in it we beeter milk the platform for all it is worth to replace existing platforms over the next two decades or so.

  12. The problem exists with the UK defence industry and poor government decisions. The defence industry is dominated by BAE, whose business is very defence heavy. As for the government and MOD well they are pretty poor. The UK can do things, but the leadership required from government and MOD is just rubbish. Look at Airbus, UK does quite a lot of commercial aerospace pretty well, however because the government doesn’t want to back it with any money, with good loans that only a government can offer. France and Germany have given such loans and are seeing more work on new projects, the UK can’t be arsed to provide anything, so we’re are seeing less.

    The UK government has to give before the country can gain. Even in this global capitalist times, the government need to be on the front foot to keep up the competition between other EU countries.

  13. @paul r the new composite wing factory at broughton north wales was built using a govt loan, also remember the complete bollocks we had with boeing filing law suits with the world trade organisation because they were losing orders due to airbus getting govt loans, airbus lost the case then promptly did exactly the same to boeing!
    It’s all boardroom politics and masonic handshakes, drinks at the club etc etc, bullshit and bollocks that screws up the man in the frontline/plane/ship.

  14. Lord Jim and Brian Black started the usual argument of cash strapped Defence Forces.
    ‘Why should we have to support Defence industry when we are short of money’.
    There is an attitude that Defence is ‘special’, and it should get the money it considers it needs. That the taxpayers should cough-up and stand aside while the experts do their stuff. Unfortunatly when you scratch the surface what you find is often that the experts cannot agree on what they want, or want is beyond that which the national economy can afford.
    Short of an immediate enemy at the gates Defence is simply an insurance policy to be funded in competition with all the other claims on the public purse that any politician wanting to stay in power has to juggle. In that situation, in a Western democracy, a Defence force that is simply a drain (imports)on the national budget without putting anything (jobs, technology) back is a candidate stagnate funding or cuts.

  15. @Lord Jim, It will be interesting to see what comes out of the new defence industrial strategy

    @Phil, FRES seems to be the project that just keeps on disappointing. This answer would seem to be some distance from the initial press releases doesn’t it? Now I know there is nothing definitive in that answer but one can’t helping feeling someone has shafted the MoD again.

    @Rupert, with all the messing about on FRES I am sure we could have developed and delivered something

    @Brian, seems it was nothing more than a nod and a wink, as exposed by this answer

    @Alan, the thing is, the British defence industry is competitive because it has a huge export value

    @Jed, it’s a real dilemma isn’t it? I wonder if we need to be a bit more selective in what we characterise as sovereign capabilities. How about re-nationalising? Your point on CV90 is well made, plus of course we get to tap into a larger installed base for updates and new variants, a bit like a CV90 users group, not necessarily a formal development but an informal sharing of logistics and development.

    @Lord Jim, I agree on making the most of our decision, this is something we often do, making huge investments but then never quite getting to the finished product.

    @Paul R, good point on investment but doesn’t that mean the government trying to pick winners

    @PaulG, agree, thanks for the email by the way, next stop, world domination!

    @Aussie J, are we talking about the relationship between the military and industry, what did Eisenhower call it!

  16. Hi TD,

    I agree ” the thing is, the British defence industry is competitive because it has a huge export value” but it is also standing (export-wise) on so few legs that no normal business manager would accept the vulnerability of the “portfolio”.

    Look at export in net terms, stripping out the imported components. Take away the dominant share of Typhoon
    – how much would be left?

  17. ACC
    Balls, I thought both the Viking and Warthog were from singapore!

    Both Boeing and Airbus are huge loss makers if you strip out the Military side, which of course, is just disguised subsidy.

    “good point on investment but doesn’t that mean the government trying to pick winners”
    Exactly, and thats the problem.
    Its easy to say, the government should invest in nuclear power/curing cancer/green technology, but at the end of the day, it eventualy has to hand someone a cheque and hope for the best, and the government has a track record of handing those cheques to the worst snake oil salemen in existance.

  18. @DomJ 20/10:
    Agreed on the relative value of design over manufacturing. That’s why ARM in Cambridge are doing so well, even though they don’t actually make any production ready CPU’s themselves.

    As a Nation, we should ask ourselves, what is important to our national defense procurement that needs protecting?

    Engineering jobs haemorrage out to China and India primarily because they can do it to acceptable quality more cheaply. Fact. We can’t save them – except in specialist manufacturing (where we have a unique capability) and prototyping (where it needs to be done in-house).

    The recent arguments over IP ownership on Chinook and F-35 indicate that we need to own the designs for a military device and licence manufacture where ever offers best value (oversea’s in peace time, at home in times of war – protected by legally backed commercial confidentiality in the former case).

    Further, since that IP should be owned by HMG – there is a case for nationalising the defence industry, divesting it of the manufacturing part and “doing an ARM” – concentrating on the Design & R&D aspects. Hell, we could even licence the designs to “friendly” companies, to sell to other militaries, and get paid a % of the unit sale price!

  19. IP ownership shouls not be a major factor in Defence Procurement. With the F-35 this mainly referred to the “Black Boxes” or Line replaceable units. Returning these to the original manufacturer for maintenance and upgrades would have been nothing new and given the size of european orders it could be quite possible for the manufacturer to set up a european base to carry out this work. The MoD has handed the majority of support work back to industry partly to make savings and also to compensate them for a lack of orders for new kit.

    As I stated above, the UK’s defence industries need to look to exports to support them and not orders from the MoD. BAe Systems has tackled this by buying up overseas companies to broaden its product base. It has not however changed its attitude towards the MoD and still tries to milk programmes mainly because the MoDs procurement guidelines allow it to. It has often used the jobs card to apply political pressure to gain orders and until the Government bites this bullet nothing will change and the MoD will continue to suffer.

    Whilst the MoD is being driven to cut costs and achieve value for money, it cannot have it hands tied by being made to always look to job retention/creation as part of the procurement process.

  20. Domj

    I can’t say for Boeing but your suggestion that airbus is a loss make is simply wrong. They have a civil a/c back log off over 3500 aircraft worth over 400b dollars and across there civil fleet produce around 60 aircraft per month.

    Dave in aerospace anyway china cannot produce either the quality or cheapness. Indeed a significant portion of work that has been sent to china has been very quietly force sub contracted back to uk and European factories of late. On top of that a/c assembled in china are currently for domestic Market only due to concerns with build quality by major western airlines.

  21. @Mark

    OK, I was making a general point, but I accept your comment. Sorry I was a little unclear, but happy that high-end aviation is still a specialist capability we retain.


  22. If nobody else has pointed this out. The Viking or BvS10 was built by Hagglunds in Sweden, part of BAE Land Systems. The Warthog is the ST Kinetics Bronco built in Singapore.

    With regard to export orders for FRES or any other high end AFV. I think the scope for this is very very limited. Let’s face it anyone who wants an AFV of this standard either has their own manufacturing facility or already has an up-to-date AFV in existence.

  23. Mark
    They can have a backlog of ten million aircraft worth over a gazillion $, they still lose money.

    Well, both Boeing and Airbus claim they are profitable without military sales and government loans, and the other receives hidden subsidies through its military sales / government loans that it relies on those to fund commerical operations.

    Both are of course telling the truth about the other guy, and porkies about themselves.

    Dont get me wrong, I’m not saying nothing should be done over here, if its security critical, like armour/comms fit, it probably has to be significantly a UK job, but not everything needs to be.
    The easy stuff, like building ships hulls (yes, easy) could and should be sent overseas to the best bidder.
    Tow them back, and outfit them if the groovy stuff.
    Save a fortune, and probably nab some foreign orders too.

  24. Phil
    ACC pointed it out, I corrected, but Warthog is Singaporean.
    I hadnt realised they were completely different,l because, well, look at the damned things….

  25. Trouble is, that we aren’t building enough of most military gear to be worth sending the manufacture overseas.

    Less than a thousand of anything and you end up in the position that you barely train the workforce before your production run ends. The cost is in the high value bits that you would make at home anyway.

    Where the home market is willing to stump up the cash to get it started and to the point that unit cost comes down to an exportable level, then you have the opportunity for a successful product.

  26. Mr Fred:

    “Where the home market is willing to stump up the cash to get it started and to the point that unit cost comes down to an exportable level, then you have the opportunity for a successful product.”

    Which is exactly why all talk of defence industrial strategy is complete bollocks, because UK armed forces are well below the threshold now – national level programs for general kit to be used by UK only is (with caveats and exceptions for very “special” bits of kit)never going to be value for money any more, we just won’t order enough of them, be they AFV’s, planes or ships.

  27. Hi Jed,

    I concede your point on planes (we’ve already gone the co-operation way), as in ““Where the home market is willing to stump up the cash to get it started and to the point that unit cost comes down to an exportable level, then you have the opportunity for a successful product.”

    Which is exactly why all talk of defence industrial strategy is complete bollocks” BUT
    – in AFV and ships?
    No, look at the past successes, and look also at
    – CV90; it was developed for a 1990 defence review requirement of a fairly small force (and as the requirement was set right, has been selling well despite having been taken over by BAE)
    – Patria AMV, bursting through the 2000 mark, built for a very small home market (again, the rqrmnt was set right, and the domestic producer could meet it)

    Ships, it is not just the past (British) exports, look at MEKO & Co going strong
    – when the product is right/ adaptable, there is demand for it. All defence forces face the same dilemma: just to build for them is going to be expensive

  28. ACC

    Factor in the politics – CV90 was designed in Sweden, for Sweden, to be built in Sweden. I am not saying exports did not factor in somewhere, but if you look at Swedish policy during the cold war, it was never going to be built anywhere else AND I dont think local jobs was a particularly big element of those decisions.

    Patria – Finnish company, not quite the same deal as above, but it just so happens that the Finnish gov ordered a product that was well enough spec’d to sell elsewhere – I have no idea what the Finn’s military-industrial strategy is, and whether or not this was just serendipitous or deliberate.

    How many MEKO’s ships are in the German navy ? There are some for sure, but they happen to build designs (and partnerships) that sell well across the world – the last warship for the RN that sold even reasonably “widely” was the steam powered Leander class !

  29. DomJ

    Airbus does not have a large military division outside of a400m its actually quite small. The world of government loans is a merky one we in the UK contribute a about 1/5th of what the germans and french do hence our ever smaller work share but airbus is a profit making organisation. As for boeing the argument is not entirely military but the amount of R&D from NASA which helps Boeing. You may be confusing airbus with its parent company EADS.

  30. @ Aussie Johnno

    In regards to the competition the MoD faces with other Depts, you are indeed quite correct the unfortunate thing is that most modern politicians ahve no idea about military matters and regard the MoD as a “In case of emergency deploy troops” with no real understanding that you cannot have a stagnant Military and then suddenly thrust them into a situation just because you have them. This is exactly what Politicians do, the Libya debacle being a case in point. One of the scary things about this is that the “can do” attitude prevelant within the Military masks some of the inherent shortcomings of the system, libya being case in point with the Typhoons. Unfortunately unless the Military are deployed on Ops the Govt sees them as a drain but when the proverbial brown stuff hits the rotary air mover the military are tossed in with nary a real thought as to whether or not they really should be or are equipped/trained to do so. Even worse is when you have to fight with hands tied behind back, as has been the case in Afghan.

  31. And Tank, @1.21, you are not going to change them pollies.
    Our elected officials sometimes seem to be a species apart. But it is pointless blaming them too much when the same comment applies to much of the senior officer/civil service society.
    There are to many officials elected, appointed and commissioned who spend their time in fairy land, or who are unwilling to say no.
    Money is always going to be limited short of a immediate threat, but while the MOD (and the ADF for that matter)cannot set its priorities better and stay within likely available funding things are not going to improve.
    The Australian government produced a new White Paper a couple of years ago, the principal insanitity of which was a plan to double the RAN’s submarine force to 12 4000 tonne unique conventional submarines to replace the Collins class. Planning madness, which ignores all the lessions with the Collins class, so you are not alone

  32. Maybe when British manufacturing becomes cost effective and indeed competitive, then we might see more UK manufacturing taking place.

  33. In any case there will be no much FRES SV vehicle, I think no more than 600 vehicles with all variants. I think there will be no more than 300 Warrior upgraded with a new turret. It will perhaps not the most expensive projects. On the other hand, have two aircraft carriers, with at least thirty planes, it will be expensive, but it’s capital.

  34. SomewhatRemoved, but UK industry can be competitive. It has proven itself so in its exports, and that’s despite a MoD (barring some efforts from DESO) who don’t help by spec’ing UK-initiated products into a niche, driving up costs, then cutting quantities and stringing out deliveries so it is impossible to create efficiencies, or who want their jollies closer to a Costco than a Tesco, and who work in total isolation from other, similarly stove-piped, government departments and can’t recognise the difference between cost to the nation and a departmental bottom-line (mind you, when have they fully understood even that?).

  35. The british industry is not itself pricing out of the market because they are incapable to compete. The fact is, that suppliers as BAE have their own requirements on profit ratios. To make such a stock-market registered company work is requiring to put 20% margin of profit into prices, with the supplier in a comfortable position to be able to choose, especially if there are internal plans to reduce operations in a certain sector or country.

    This is the product of 50 years british big-company policy. Instead of providing medium suppliers with enough work and efficiency incentives we nationalized anything, just to throw those big nasty giants onto the stock markets.

    Apart from this, I think we don’t need expertise to build everything, surface vessels being an example. We need to retain the design shops and a corps of overseeing engineers. I would call this the ARM-model: design shop british, processors made abroad by contractors.

    What I see is that our universities still pop out more bankers than engineers. But you need engineers to contually adapt your production and products to latest standards, which by now decide over being competitive or not. In short: the german model.

  36. Rather disagree on the competitiveness element of UK industry. Who picked up the contract for the new Thameslink trains? How much steel do we make in this country any more? How is our car manufacturing industry doing these days? Has BAE really had any export success to anyone apart from the US? We have some good companies, yes, but buying British rarely means good value for money.

    Too much red tape, expensive wages and unions means the UK is second or third choice for many big companies. Time the Government made good on its promise to get industry moving again.

  37. Honda, rolls royce, airbus, spirit, bombardier,Thales, general electric all have manufacturing facilities in the UK to name but a few. Yes red tape is a real pain but that only reduces the further east you go. Engineering wages are significantly larger in main land europe than in the UK. Indeed most graduating engineers in the UK will go into banking rather than engineering. Also engineering companies in mainland europe will have around 5x more government money made available to them than in the UK. UK defence gets a raw deal cause it doesn’t know what it wants and when it does final make its mind up ends up with a spec it cant afford but plods on in hope it will sometime in the future.

  38. @McZ – 27/10:
    I believe I said much the same thing a bit higher in the thread. I was shot down because apparently the MoD doesn’t do production runs long enough to warrant an oversea’s manufacturer picking up a UK Plc design.

    Can’t help thinking that short-run manufacturing shops (of the type used for prototyping another company’s products) might help the answer, but had no time to research it.

  39. Perhaps there is no reason to move production to the United Kingdom because there will not as FRES SV than expected, unless there is buyers abroad, this is what I understand about the speech of Peter Luff !

  40. How much steel do we make in this country any more? How is our car manufacturing industry doing these days?

    About 10 million tonnes a year, roughly on a par with Canada. Cars: I have in my mind the factoid that we actually make more cars than even before, just they aren’t British brands. 1.3 million a year in 2010, about 10% of EU27 capacity.

  41. @SomewhatRemoved

    Still, the UK makes more cars than Italy. Some of the most efficient car factories are in the UK.

    The point is, that apart form big failing companies HMG had never had an interest to keep the companies in british hands (whatever that means) or to have a strategy for small to medium shops to compete on the world stage. Instead the whole startegy was focused on attaining global investment, to let the public know, how good investment in the UK is. But this doesn’t make the companies british, which basically means we have to drive down corporate taxes any further which means the nations budget is f***ed up.

    We need indigenous companies tied to their country, to their region and their cities. We need to go back to the simple truth, that with wealth comes responsibility. We need headquaters, better 10 small than one big. The other lot are easily outsourced productions shops or even worse letterbox companies, there to make a produce looking british.

    Finally: the Matchbox-model-cars of my childhood were better value for money than the current PRC-made crap. They were roughly 30% more expensive than contemporary chinese produce, but the latter was broken after a short wile, the former are making still good collector prices. Value-for-money.

  42. Oh . . . I thought it was cancelled.

    I did like this little snippet, however;

    ” The Direct Fire variant will have capability equivalent to a Challenger 2 main battle tank”

    Really? Unless GD have perfected deflector shield and phaser technology I don’t see how they’ll manage it.

  43. I think that the word “Overwatch” is most important, so far he had never been written as variant by General Dynamics.

  44. Caught my eye, too “so far he had never been written as variant by General Dynamics.”

    was it by them or by the journalist? If the latter, you can get working accidents, Like:
    – a recent article said these vehicle, in the long run, will pop up in all formations that use CVR(T)
    – journo goes and looks up a list, not of formations, but of types of CVR(T) and does a copy-paste??? Just being cautious; I would be all for it, as is clear from my contributions

  45. You’re right, like it was written that there would be a radar vehicle, and here they don’t speak, so it was a question of replacing the Stormer, which was never intended.

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