Roger Freeman, the UK Minister for Defence Procurement, reveals his pragmatism on the European front.
Douglas Barrie/LONDON
When it comes to European policy, Roger Freeman, the UK Minister for Defence Procurement, marches to a different beat than that of many other senior Government ministers.
Freeman has removed himself, and his department, from the ideological bickering within the Government over its relationship to Europe. Instead, wrapped in a cloak of pragmatism, he believes that he is embracing the inevitable: recognising the inescapable nature of European defence collaboration. Surprisingly, this is borne out against a strong transatlantic commercial background.
Before entering Parliament over a decade ago, Freeman worked as an accountant for US financial institution Lehman Brothers, primarily looking at direct investment into European industrial sectors such as commercial aerospace and agricultural manufacturing.
Nor is he a stranger to the Ministry of Defence's (MoD's) building in Whitehall. In the mid-1980s, he was Under Secretary of State for the Armed Forces.
Among his colleagues and within industry, Freeman is known both as a "big picture" and a "details" minister. He is reputed "to take a good brief" and, since his appointment more than nine months ago, has shown his willingness to submerge himself in procurement paperwork before reaching any conclusion. This is just as well, given the plethora of big-ticket procurement decisions with which he is confronted.
Having juggled a "compromise" conclusion to the debate over whether to choose the European Future Large Aircraft (FLA) or the US Lockheed C-130J Hercules, he now faces numerous similar decisions over the next year. Attack-helicopter, support-helicopter, replacement maritime-patrol aircraft, conventional stand off missile, stand-off anti-armour weapon and future medium-range air-to-air-missile procurement- decisions should all be made by the end of 1996.
With the support-helicopter decision split in favour of Westland, but with additional Boeing purchases, Freeman must next negotiate the attack helicopter for the British Army Air Corps.
The support-helicopter programme contested between the Westland/Agusta EH101 and Boeing's CH-47 Chinook, has been a protracted affair which neither the RAF nor the Army has been desperate to support financially, both services preferring to fund teeth, rather than tail, programmes.
Freeman's view, of the two helicopter procurements, sheds a revealing light on the underlying industrial rationale, which will underpin the decisions. While the Government may be loath to meddle in the industrial sector, Freeman appears to be without such ideological inhibitions when it comes to sustaining the defence industrial base.
"The support-helicopter decision is central to the long-term manufacturing prospects of Westland. The attack helicopter is not...Building and exporting the support helicopter is important for the future of Westland. You cannot ignore that point," Freeman declares.
While such reassuring statements on its strategic role will be music to Westland's ears, Freeman's view of the attack-helicopter competition leaves the Westland/McDonnell Douglas team no room for complacency.
Freeman says that three contenders remain in the attack-helicopter hunt: the McDonnell Douglas AH-64D, the Eurocopter Tiger and the Bell/GEC Cobra Venom. With all offering substantial UK industrial content, Freeman's view is that the "...impact of a decision is much less central to the defence industrial base".
A decision in favour of a mixed fleet of EH101s and additional Chinooks came despite leaks from the RAF hierarchy that it would prefer an all-Chinook purchase. Postponements of a decision were in part tied to Treasury efforts seeking to further reduce the cost of the more expensive EH101. The unit cost of a Chinook is about two-thirds that of an EH101. "A mixed fleet is better, but not at any price, hence our negotiations," says Freeman.
The Department of Trade and Industry, as well as the MoD and Treasury, has been involved in the support-helicopter decision because of the economic aspects of the procurement choice.
Freeman, ever the accountant, also points out that the Government will receive a levy back on all three variants of the EH101 - support, anti-submarine warfare, and civil - sold for export. "We don't get a return if we don't buy any," he notes pointedly.
To say that the continuing Eurofighter EF2000 project provides a challenge is an understatement. The next 12 months are critical for the project.
The re-orientation memorandum of understanding, written in 1992, after the fall out of the original European Fighter Aircraft programme and known as MoU Four and that covering production, MoU Five needs to be signed by the end of this year, if the aircraft's in-service date is not to slip back, even further.
Freeman's German counterpart, Jorg Schonbohm, was in London earlier this month to discuss the programme. Germany's three partner nations, Italy, Spain and the UK, will all be in a position to sign MoU Four by the end of April. Freeman will have pressed Schonbohm to ensure that Germany is also in a position to initial the MoU, along with the other partners.
The German Government and Daimler-Benz Aerospace (DASA) have been in interminable negotiations in an attempt to resolve a funding shortfall on German elements of the EF2000.
Resolving MoU Four, however, pales into insignificance when compared with the difficulties with which Freeman is confronted in reaching agreement on MoU Five. The later MoU requires that all four nations commit to production numbers of aircraft, and agree individual work-share.
British Aerospace is pushing to wrest further work from DASA. Germany's likely order for 140 aircraft equates to a work share of only 23%; not the 33% which DASA is trying to protect following its development spending and earlier expectations of 250 orders.
Freeman is all too aware that he needs to balance the interests of the UK's defence industrial base with the issues of internal German politics. Pushing too hard could jeopardise the security of the project.
"We do want a sensible solution," says Freeman, who takes a considerably more conciliatory approach than some senior UK industrialists. " We want to be reasonable. We are willing to take account of development expenditure," he adds.
The industrial partners have already sought to thrash out a framework agreement on work-share, with DASA apparently already relinquishing fin and centre-pylon manufacture to BAe. This brought DASA's work-share down to 30%, which, to sustain as straight production, would require a German order of 200 aircraft. Within Germany, there have been efforts to include 60 EF2000s for the strike role, along with 120 air-defence aircraft and 20 two-seaters.
"Industry has been in discussions on the basis of 200 aircraft," says Freeman, adding that a purchase of "...only 140 presents a problem".
With Freeman willing to allow the Germans some leeway on the production requirement and work-share equation, a solution is achievable. German industry will nonetheless have to relinquish more programme work. "The UK didn't precipitate a re-orientation in the programme," he points out.
On future combat-aircraft programmes, Freeman is looking to potential industrial co-operation with the USA and Europe, with the possible emergence of transatlantic defence co-operation with several European states.
Not only does he consider, that a replacement for the British Aerospace Harrier GR7 and Sea Harrier F/A2, may now emerge from the US Air Force/ US Navy Joint Advanced Strike Technology programme, he also believes that the programme could provide a successor to the Panavia Tornado GR4 in the deep-strike role.
He is also looking towards the emergence of a radically revised collective-procurement structure within Europe, likely to be formed under the auspices of the Western European Union (WEU), rather than coalescing around a Franco-German procurement agency.
Freeman points out that, "...every time we have a collaborative programme, we have a new mechanism to go with it".
In moving away from this to a WEU-led agency, Freeman is also keen on shifting the decision-making process on work-share from the political to the industrial arena. This partly explains his support for placing the FLA programme within the framework of Airbus Industrie.
"Defence collaboration," he contends, "is not a political option. It is an economic necessity. There have been so many false starts, but you must look at the broad trends. In a decade, my successors will be talking not 30, but 300 projects. Collaboration will be the rule, not the exception."
Source: Flight International
