An indiscriminate rush to grab workshare in co-operative defence programmes can work against the nations and companies involved
Italy's decision to withdraw from the Airbus Military Company A400M transport programme comes as little surprise when the number of transport aircraft it has on order are considered, but Rome's move highlights the fact that co-operative programmes rarely run smoothly.
In Europe, co-operative programmes first became truly popular in the 1960s as countries became less able to finance alone the development of complex defence systems to compete with the Soviet Union's latest equipment. The alternative, buying equipment from the USA, would have meant a loss of capability and job cuts as defence companies closed. This second point is as relevant now as it was then. Such programmes have also been used by nations to initiate and develop industrial capabilities that did not previously exist.
While it is laudable that the governments are intent on improving national capabilities and are keen to ensure that money spent on defence has a benefit in peacetime as well as during times of strife, the situation is becoming untenable.
This headlong rush for European countries to work together has made programme funding, management and workshare division an increasing nightmare as partner numbers have grown with each project. The Sepecat Jaguar had two partners - France and the UK; the Panavia Tornado three - Germany, Italy and the UK; and Eurofighter four - Germany, Italy, Spain and the UK. And the next combat aircraft programme? It is likely to include the Eurofighter nations, France and Sweden at the very least. Every time another partner is added the complexity increases.
As more countries join it becomes more difficult to give each one "noble" workshare. Italy's position on the A400M is a good example. For its L3,000 billion ($1.4 billion) investment it would have received 16 aircraft and a deal to build airframe components - hardly high-tech work or likely to introduce new skills to the national aerospace industry. Workshare is often the biggest threat to a programme. Heated debates and threats are not unusual as arguments rage over who should have design lead for every other significant component.
Perhaps the biggest grievance is the bumping up of off-take numbers to boost a nation's workshare. Few believe Germany will take its pledged 73 A400Ms. Few can see it needing more than 50, and too many remember Berlin putting other programmes in jeopardy as it re-negotiated to meet its real intentions. Such actions delay programmes and always increase the other partners' costs (and frustrations).
Co-operation is not cheap and causes delays. A report earlier this year by the UK's National Audit Office (NAO) identified that development costs of multinational programmes can be twice as high as single nation equivalents. However, any nation taking a less than 50% stake will make savings. It also determined that the production economies of scale are in the region of half that of national programmes. Co-operative factors are also the cause of significant cost overruns, said the NAO.
What is needed is some pragmatism. Instead of a dash to scope up as much workshare on as many sexy technologies as possible, governments need to calmly consider the national needs.
It will also require some realism to be displayed by governments and companies when bidding for workshare. There is no point in a company with no real experience of, for example, fly-by-wire design demanding programme lead simply to establish a capability. This does not, however, mean it should not become a junior partner in a consortium developing the system.
There is also little point in joining every co-operation programme going, which is a common fault among countries. Spreading resources so thinly does neither the participants nor the programmes any favours.
All co-operative agreements need to be governed by the same cast-iron conditions as a commercial contract. If a country reduces its off-take halfway through, then it should pay compensation to the other partners. Similarly, timescales should be cast in stone and any heel-dragging should be countered with large fines.
The blinkered, let's grab everything approach is making co-operation unworkable and some countries could perhaps be excluded from future programmes if it is too difficult to work with them.
Source: Flight International
