PARIS --- The unexpected teaming between the British government and Germany-based Airbus Defence and Space to jointly bid for Canada’s Future Fighter Capability Project (FFCP) was decided by the company, according to a spokesman for Public Services and Procurement Canada.
“Under the terms of the Suppliers List Invitation, it was up to potential suppliers to match up with a government,” he said in a Feb. 23 e-mail, referring further questions to Airbus.
Airbus Germany “is seen as the most desirable lead company to sell Eurofighter in Canada as it is already established as a military supplier through the Fixed-Wing SAR aircraft and other programs,” a company spokesman said Feb 26, and also because its recent acquisition of Bombardier makes it a major Canadian aerospace player.
Similarly, the UK government “is the obvious candidate to support the Eurofighter bid by virtue of its long-standing relationship with Canada,” also considering that BAE Systems, the British Eurofighter partner, had never marketed the aircraft in Canada.
The spokesman could not explain the mechanics of how the German company and the British government came to team up, nor what legal form this relationship has taken.
Canada plans to purchase 88 “advanced” fighter aircraft. A contract award is anticipated in 2021 or 2022, with the first replacement aircraft expected to be delivered in 2025, according to its Feb 22 statement.
An optimum marketing mix?
Left unsaid are two major considerations that provide more context as to this unusual distribution of roles.
One is Germany’s generally lukewarm attitude to arms exports, as well as the anticipated tightening of export rules once the new coalition government takes office. Germany’s lack of dedicated defense export facilities is another argument that played against its involvement, despite the fact that the eligible supplier is Airbus Defence and Space GmbH, a German company.
In parallel, the UK government has established such facilities, and is generally very supportive of defense exports, but in this case the British Eurofighter partner, BAE Systems, was probably ruled out because of potential conflict of interest concerns, given its considerable role in the Lockheed Martin F-35 program, a competing bidder.
The Airbus organization, combining four manufacturing companies with their respective governments, allowed this unprecedented arrangement to be set up by resting on the strengths of each partner. It remains to be seen, however, if Airbus’ German salesmen will match the effectiveness of their American, French and Swedish competitors.
Boeing, Lockheed Martin still eligible
As noted in our Feb 23 coverage of the event, Canada’s list of “eligible suppliers” for the Future Fighter competition includes both Boeing and Lockheed Martin, despite their having previously been ruled out of any competition by Canadian officials.
Before, during and after the election that voted him into power, Canadian Prime Minister Justin Trudeau promised that Canada would never buy the F-35, and that he would not even let it compete for its business because of the way his predecessor, Stephen Harper, had repeatedly misrepresented the price of the F-35, and the improper way is which he had committed to buying it a decade ago.
In much the same spirit, an “interim” order for 24 Boeing Super Hornet was cancelled, and the company disqualified from future Canadian government acquisitions, after it filed suit with US Government agencies to levy $300 million in import duties on each Bombardier CSeries passenger jet bought by US carrier Delta Airlines.
Although the suit was dismissed by the International Trade Commission – a US government agency despite its name – Canadian officials had briefed that Boeing would still be excluded. Seeing it now qualified as an “eligible supplier” is thus a major surprise.
No explanation was provided as to why both US companies are still in the running, apart from the obvious fact that they belong to Canada’s immediate neighbor and top defense and trade partner.
However, the inclusion of the statement that “The evaluation of bids will also include an assessment of bidders’ impact on Canada’s economic interests” seems to be aimed specifically at Boeing, and could be seen as implying it could be eliminated on those grounds.