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Transatlantic Turbulence Over Strike Fighter Deal |
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(Source: ISN Security Watch; published Jan. 18, 2006)
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(© International Security Network; reproduced by permission)
LONDON --- Debate over a billion-dollar agreement between the US and the UK over fighter aircraft threatens to strain relations between the two countries.
When the US offered its closest ally a slice of its multi-billion dollar Joint Strike Fighter program four years ago, the opportunity seemed too good to decline. For a contribution of just US$2 billion, Britain could become the top international partner in a project to create a new generation of fighter jets, and receive a raft of profitable defense contracts into the bargain.
Since then, however, the relationship between the two transatlantic allies has run into turbulence over the US$240 billion program, with the US threatening drastic cuts and Britain accusing its partner of reneging on the original deal.
US officials are planning to scrap a second engine for the fighter, which under the original contract was to be built by Rolls-Royce of Britain in co-operation with General Electric of the US. The cut is part of a wider economy drive caused by the financial strain of the ongoing conflicts in Iraq and elsewhere.
British Prime Minister Tony Blair has written personally to US President George W. Bush to try to reverse the decision, which defense experts say will not only hit the industry hard but could have severe military implications.
Sir Digby Jones, director-general of the Confederation of British Industry and the Conservative Party have both joined the frantic lobbying; with Jones making an unscheduled visit to Washington D.C. to meet with officials from the White House and Pentagon last week.
Speaking to press on Saturday, the industry chief said: "It's as simple as this: the president of the US has got in his gift to show by action rather than by fine words that he acknowledges the support the UK government has given the US on many occasions. "To ditch the UK as a partner on this is no way to treat a friend."
Conservative Shadow Defense Secretary Liam Cox has also taken the unusual step of intervening personally in the dispute. He met with Pentagon officials in London Tuesday and raised various aspects of the JSF program, including the second engine contract, his spokesperson told ISN Security Watch.
But even before the Pentagon took the decision to tear up the $2.4 billion Rolls-Royce contract – which must still be approved by the White House and Congress as part of the 2007 budget next month - British ministers acknowledged they were looking at contingency plans should they be forced to pull out of the program completely.
"I am not getting into details about a plan B, but I am saying there has to be a plan B," Paul Drayson, the defense procurement minister, told a group of reporters in November. "I have no sense we need an alternative plan today, and I am not saying we need to pull any levers on plan B today, absolutely not. But we need to make sure we have done the work needed to ensure we have an option."
Before the engine dispute, British industry had done well out of the JSF program, gaining back around five times its initial investment through defense contracts. BAE Systems builds part of the aircraft near Preston, Lancashire, while Rolls Royce, aside from the engine contract, is developing a revolutionary lift fan for the Harrier-like jump jet or STOVAL version of the JSF.
But the loss of the engine contract - which, in addition to the initial development program, could have led to hundreds of engine orders - would deeply damage Rolls-Royce's defense business. At the time of the initial award of the contract in August, company executives heralded it as central to their future. "It would be hard to overstate the importance of this deal," Colin Green, head of Rolls'defense business, told reporters. "It is our biggest single defense program."
A question mark has now emerged over even the lift fan contract. During the quadrennial defense review, an assessment of the entire U.S. military posture, US defense officials discussed killing off one of the three versions of the JSF being built in order to cut costs. The most likely candidate was the jump jet version as it was the most costly and difficult to develop; its scrapping would not only be a further blow for Rolls Royce, but cause severe problems for a concurrent British project to develop a new generation of aircraft super-carriers from which the JSF would be launched.
Britain is planning to buy 150 jump jet vertical landing versions of the JSF to replace its Royal Navy and RAF Harrier squadrons in a $17.7 billion deal.
Recent accounts of Pentagon budgetary decisions indicate that the jump jet version should now survive the review; however a former British assistant chief of defense staff told ISN that the decision to scrap the second engine suggested otherwise.
Lord Timothy Garden, now an adviser to the Ministry of Defense and a defense spokesperson for the British Liberal Democrat Party, said that if the jump jet version of the aircraft was scrapped, Britain would have to change the design of the aircraft carriers it has been building; they would have to be bigger and more expensive.
The aircraft carriers were a “flagship project” for Britain so “everybody’s playing for quite high stakes,” he said.
However “the most serious issue at the moment” was that of technology transfers, Garden continued.
It is this area in which much of the disagreement between Britain and the US has taken place.
British officials are deeply unhappy about the failure of the US to guarantee access to all military technologies on the aircraft - particularly software codes - before Britain must decide whether to buy up to 150.
Garden said that if the US did not grant Britain the access to those technologies, it would mean that having put over $2 billion into the project, British defense would lose the ability to upgrade the aircraft over time.
Both this issue and the possible loss of the second engine and jump jet version had serious military implications, he told ISN Security Watch.
British representatives should make it clear to the United States that London had put over $2 billion into the project on the understanding that both the engine and the jump jet would be built, Garden said. Britain was also the largest international shareholder in the project and was “America’s best ally”.
If the United States was not going to provide Britain with the technology transfers or the model it needed, then “we’re going to have to look elsewhere”.
A spokesman for the Ministry of Defense told ISN Security Watch that the government was still waiting to hear from the U.S. Department of Defense on the issue of the engine contract and the jump jet version.
“We’re working on the assumption of receiving 150 STOVAL JSF and we’ve no reason to believe that’s not on the way,” he said.
Technology transfers was a serious issue and could threaten Britain’s participation in the program, the spokesman continued.
At present, Britain was satisfied with what it had received up to this point, although ideally it would like to receive the transfers faster and perhaps all at once, rather than incrementally as the Americans were giving them. “It’s something we continue to discuss with them,” he said.
If Britain did not receive the technology it needed, the program would not really be viable and the Ministry of Defense would be forced to look at other options, he concluded.
(By Hannah Strange in London)
-ends-
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