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Jobs at Risk if Eurofighter Talks Continue to Stutter
Up to 2 billion Euros and at least a year's delay—that will be the price of failure to agree four-nation backing for Eurofighter Tranche 2 production, says Eurofighter GmbH chief Aloysius Rauen. The negotiating teams have "until the summer break" to agree the crucial Supplement Three chapter of the Tranche 2 contract that will avoid a destructive production gap for the Eurofighter companies. With just nine days left until the end of the month Rauen says that everyone involved must be very clear on the price of failure.
"I know that the Eurofighter partner companies (EPCs) have started talks with the unions about short-time working. The next step after that has to be lay-offs and a production freeze." While Rauen says his gut feeling is there will be some kind of an agreement — "just give me a four-nation commitment, that's all I need" — a few more weeks of hesitation will force a delay of at least a year on the whole program.
"Industry and NETMA have done a rough analysis on the implications of a failure to reach agreement," says Rauen. "It will add between one and two billion Euros to the total program costs and delay it by at least a year. Why a year? Because without a commitment to production, the EPCs and suppliers will run-down their activities. Any run-up or restart will incur costs, no matter how fast or slow you do it. Extra costs mean that everything we have agreed to date will have to renegotiated again — that's what will delay us for a further year. Tranche 2 production must start on time for the 2007 delivery timescale to be safeguarded." Rauen notes that these dates are also critical to meet Austria's requirements and he points out that the experience in this regard of Eurofighter's first precious export user will be crucial in shaping the opinions of other potential customers.
To further complicate matters the UK's renegotiation of its Eurofighter capability requirements (with the aim incorporating Tranche 2 attack capabilities into late production Tranche 1 aircraft) are outside the main Tranche 2 production negotiations. Rauen stresses heavily that any national agreement must align with the international agreement or else the deal will fail. Right now he says that "two-and-a-half of the partner nations have their agreements in place. Germany and Spain are settled and our Italian partners tell us they are nearly there. But all that really counts is the international agreement — and there must be full partner acquiescence to any re-arrangement of the UK's Tranche 1 plans. The partners will say we do not want our schedule or our cost jeopardized by whatever you do. If the UK government says it wants a precision attack capability earlier than planned that does means it will cost extra."
—Robert Hewson
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