It is time for the Eurofighter partner nations to throw their weight behind the project and not drag their heels, as the UK seems to be doing
Another of Europe's leading collaborative military aircraft projects has fallen into disarray because one of its partner nations is suffering funding difficulties and cannot commit to the next phase of the programme. Yes, Eurofighter has gone the way of the Airbus Military A400M transport aircraft, with delays looming as the project's lead partner struggles to come up with the money required to move forward.
But unlike the A400M struggle, since resolved, the Eurofighter crisis has nothing to do with cash-strapped Germany, which has repeatedly underlined its desire to buy 180 of the fighters across three production tranches. The UK, which criticised Germany for delaying a contract go-ahead for the A400M, is now guilty of dragging its heels and could cause a costly gap between production of Tranche 1 Eurofighters and the Tranche 2 aircraft now contesting lucrative export deals.
The four-nation Eurofighter consortium had a draft contract ready at the end of May and set 31 July as a deadline for partner nations Germany, Italy, Spain and the UK to commit to a Supplement 3 agreement that would clear the way for Tranche 2 production. In the words of a senior official at Eurofighter partner company EADS, three countries did their homework and one - the UK - didn't.
Eurofighter was not demanding a full contract signature last month; merely a commitment strong enough to assure European industry that there would be a seamless production process for the programme's first two tranches. With this not forthcoming from the UK, the programme is now in danger of faltering, with long-lead items not being ordered and working rates reduced. A joint assessment by industry and the NATO Eurofighter and Tornado Management Agency puts the cost of a one-year break in production at €1-2 billion ($1.2-2.4 billion).
A black mark for UK defence secretary Geoff Hoon, then. The partner nations knew this crisis was coming, and, while Germany, Italy and Spain committed in good time, Hoon missed a golden opportunity in his defence transformation statement on 21 July, which provided only a vaguely worded commitment to proceed when the terms were favourable.
The result is that everybody will be forced to pay more for their aircraft, and Tranche 2 deliveries could be at risk of missing their 2007 start date. It is on the export stage that this delay could be catastrophic. Eurofighter is under contract to deliver 18 Tranche 2 aircraft to Austria from 2007. Missing this deadline would result in stiff financial penalties. Slip by too much and the deal could collapse. Greece and Singapore could also snub the Typhoon.
The UK's dalliance comes at a time when partners should be pulling out all the stops to advance the Eurofighter project. They have been granted a longer-than-expected window of opportunity to attack the export market, while the USA's Lockheed Martin F-35 Joint Strike Fighter (JSF) battles with weight issues and partner nation dissatisfaction over its "best-value" workshare agreements. Eurofighter also wants future partners, but does not share in the US defence community's desire to demonise the well-practised cult of offsets. If Eurofighter gets this delivery and industrial balance right it could yet land further deals with nations like Norway, currently a dissatisfied JSF partner.
Germany, Italy, Spain and the UK must also maintain as high a degree of commonality as possible at this point. While the UK is driving for the accelerated introduction of air-to-surface capabilities into Tranche 1, the other nations should back its initiative, as recent conflicts have underlined the need for precision ground-attack capabilities over air-superiority traits.
While it is not vital to do so at this point, the partners should also underline their long-term commitment to buy all 620 aircraft originally planned. Any revision will require them to renegotiate the umbrella contract on which early pricing data was drawn up. Should they seek cuts to Tranche 3, they will pay more for their earlier aircraft to compensate industry. Despite persistent media reports in the UK that Tranche 3 is at risk, Eurofighter insists none of the partners have asked it to perform even an analysis on the implications of a reduced offtake late in the programme.
Eurofighter has changed, having adopted a new prime-contractor status on 1 May in a bid to harmonise the activities of its partner companies during future development and production activities. It is time that Europe's defence contracting practices did better in keeping pace with this reform - a need seemingly missed by its new European Defence Agency.
Source: Flight International
