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Plus Ça Change . . . ?
Aviation Week & Space Technology
05/26/2003, page 66

Douglas Barrie
London

Alliance angst and market access will feature prominently among the industry talking points

Barring yet another last-minute hitch, by the time the Paris air show arrives, Europe may finally have formally launched the A400M airlifter.

The A400M will be one of several multinational procurement efforts that will be a focus of attention. The continuing fallout from the Iraqi war, in terms of political implications and weapon system performance, also will represent topics of considerable interest.

The show takes place against the defense backdrop not only of the policy schism between the U.S. and two of its main NATO partners--France and Germany--over Iraq, but amidst potential tectonic shifts in the strategic environment as NATO attempts to remake itself, the European Union struggles toward the starting point for a coherent military capability, and the U.S. moves toward a policy of pre-emption.

Obviously, the above have implications for the aerospace and defense industry. Trying to thrash out just what some of these implications will turn out to be is guaranteed to be a source of debate among show attendees.

The Airbus-led A400M program earlier this month was pushed forward with the conclusion of a messy engine selection. This left the airlifter to be powered by the Europrop engine consortium, while U.S. and Canadian politicians and industrialists fulminated at the perceived inequities of the process (AW&ST May 12, p. 26).


Airbus activity on the A400M may finally move beyond high-quality artist's impressions.

However, just when the pantomime leading up to the A400M launch appeared to be drawing to a conclusion, the German parliamentary budget committee seemed to forget its lines. Final German go-ahead for the A400M had been hanging on the engine selection.

In the wake of the engine choice, an extraordinary committee hearing was called to consider--and it was expected to rubber-stamp--the program May 9. Instead, the committee chose to defer a decision, at least until May 21.

Internal German politicking, European industry sources suggest, was at the root of the latest in a nearly interminable series of delays. The closer the program draws to production, however, final numbers are faced with a reality check--as is the all-too-familiar tradition with European programs.

On the A400M, Germany has cut its requirement, as has Turkey. Similarly, in recent months, Berlin has reined in aspirations on the Tiger attack helicopter and the NH-90 medium-lift military helo.

While the first of the four-nation Eurofighter Typhoons should be handed over to the participating air forces at the end of June, the British government is muttering that it may have to reconsider how many of the type it eventually purchases.

The A400M program remains paradigmatic of the inherent vulnerability of Europe's nascent procurement efforts. The mean pace of the project has been determined by the slowest, or most onerous, decision-making process of one or another of its various constituent nations.

Stated production requirements at the outset of a program are more often driven by industrial rather than military needs. Subsequent realignment (the "reality check") inevitably invites delay.

The A400M, touted in many European capitals as giving substance to a collective political will to address capability shortfalls, has as often seemed to exemplify why such gaps exist in the first place. For British Secretary of State for Defense Geoff Hoon, announcing in 2001 the U.K. decision to opt for the A400M, it reflected European allies working "in a way that will be welcomed by our American allies as a demonstration of Europe's determination to pull its weight alongside America in delivering an effective military capability."

While progress, however belated, on the A400M ought to be a vehicle to ease Washington's exasperation over Europe's tardy efforts to bolster defense capability, the continent seems able as ever to snatch elements of defeat from the jaws of partial victory.

Pratt & Whitney Canada had gone head-to-head with Europrop--comprising MTU, Rolls-Royce, Snemca Moteurs and Industria de Turbo Propulsores--in bidding the engine for the A400M. By Airbus' own admission, Pratt-Canada's initial bid considerably undercut the Europrop offer, while being of comparable technical merit.

To then award the 750-engine contract to Europrop, with the taint of political interference, merely played into the hands of some in the U.S. who push a "fortress Europe" argument--this, at a time when relationships between Washington, Paris and Berlin are already raw.

The engine choice saw even the British Defense Ministry attempting to square a circle. Viewed by many as a reluctant participant in the A400M, the ministry has long argued the need for the program to be run along "commercial terms."

The A400M, British defense officials argued, should represent a break with the bad old days of "juste retour." Work share ought not to be doled out to national contractors on the basis of how many aircraft a particular nation was buying. Rather, a commercial sector approach was to be embraced--exemplified by the choice of Airbus as the prime contractor--to ensure "best value."

Nevertheless, having argued for a hands-off, commercial approach, the U.K. along with other participating nations then provided political muscle to bolster the Europrop bid. In the case of London, this included the Dept. of Trade and Industry (DTI) providing research and development funding to Rolls-Royce for the TP400-D6 engine.

Not only had Europe apparently indulged in a sham competition, but here it was again providing subsidies to support its own industry. Well, that may be the view some in Washington would wish to purvey.

Protectionist impulses, however, are anything but particular to Europe. About a year ago, EADS found itself jilted at the last moment over a teaming agreement with Lockheed Martin for the U.S. Navy's Multimission Maritime Aircraft (MMA) program. The two were were planning to offer a version of the Airbus A320 to meet the requirement. But the deal collapsed at the last minute, with stage whispers inside the Washington beltway that a bid based on a non-U.S. platform was effectively a non-starter.

Arguments over the issues of reciprocal market access and subsidies will inevitably rattle around the exhibition halls and chalets at this year's show.

Just how close Pratt-Canada came to garnering the A400M order remains speculative, although industry sources close to the program have suggested that, had it more effectively covered its political bases, there might have been no way back for Europrop.

THE VEXED PROCESS of the engine selection underscores the need for a coherent approach to procurement among European partners on big-ticket defense items. It is plausible that London (DTI perhaps excepted) and Berlin would have accepted an Airbus decision to opt for the choice of Pratt-Canada. However, it is far harder to conjure Paris accepting a North American powerplant, particularly given the present ill-feeling between elements of the two governments.

European nations--through arms procurement agency Occar--would be well served to make abundantly clear at the start of a major procurement effort the terms of engagement for industry.

Given the near certainty that any program under the aegis of Occar would be primed by a European company, then what would the opportunities be for sub-contractor work at the first- and second-tier levels? All participating nations should stick to an agreed approach, either for competitive or directed procurement.

Even Britain, which for the better part of the last decade has used competition as its keystone for defense procurement, has begun to signal a shift in position.

"Competition is a tool to us and not a dogma," Lord Bach, the U.K.'s minister for defense procurement, asserted recently. However, some in the upper echelons of the British aerospace/defense sector had increasingly argued it was a dogma, and a damaging one, from the industrial perspective.

The emergence of a Defense Industrial Policy (DIP) document, and the DTI's increasing input into procurement decisions, has also tempered the emphasis on competition.

The ministry, however, remains wed to keeping its market open. As stated in the DIP, "Protectionism is not a viable way forward, but we recognise that not all governments approach acquisition with similar openness. We will continue to press for freer access to overseas markets."


The Storm Shadow cruise missile, represented as nose art on an RAF Tornado GR4, proved a European hit during the recent war against Iraq.

It is a line the U.K. will persevere in touting both with the U.S. and European partners.

While Europe's frequently byzantine procurement process can appear an end in itself, it is still geared to producing defense equipment. And lest one forget, the end product is capable of at least holding its own in an increasingly competitive marketplace.

Hurried into operation ahead of its planned in-service date, the Anglo-French Storm Shadow/Scalp EG land-attack cruise missile appears to have fulfilled, and exceeded, expectations on the part of the British Royal Air Force.

Some Storm Shadow 30 missiles were launched from Tornado GR4 aircraft against Iraqi targets during the recent war. A further missile is believed to have had a built-in-test-equipment failure during carriage, with another launch called off because of extremely heavy surface-to-air missile and anti-aircraft artillery in the launch box.

Initial battle-damage indications were extremely positive. One issue that has arisen is--given the accuracy of the weapon and the nature of the multi-stage warhead--that of timely and accurate battle-damage assessment. Some of the high-value targets hit exhibited only a small puncture hole on the exterior shell of the building.

Since the end of high-intensity operations in Iraq, British military officials have begun to visit the target sites. Initial comments from ministry sources suggest the warhead was effective.

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