Friday, January 06, 2006

UK-US Skirmishes Over JSF Overblown, Continuing

UK and US politicians and defense officials continue to squabble over restrictions on technology transfer between their respective countries on the F-35 Joint Strike Fighter program, but industry analysts and government sources say a serious rift over the issue is unlikely.

The latest public manifestation of the dispute came on Dec. 21 with comments by the chairman of the UK House of Commons Defense Select Committee, James Arbuthnot, on a report on the UK's joint combat aircraft and aircraft carrier programs. According to the Guardian and other news outlets, Arbuthnot claimed that if the state of technology sharing between the US and UK does not improve, the UK Ministry of Defense could be forced to write off its $2-billion investment in the program and cancel its $10-billion order for 150 short-takeoff-vertical-landing JSFs that would replace the country's existing Harrier aircraft (for more on the program, see "JSF International").

The report in question, issued on Dec. 13 by the committee, states that: "We would consider it unacceptable for the UK to get substantially into the JSF program and then find it was not going to get all the technology and information transfer it required to ensure 'sovereign capability.' If the UK does not receive assurances that it will get all it requires to ensure sovereign capability, we would question whether the UK should continue to participate in the JSF program."

Is a breakdown in cooperation over the program forthcoming? Stephen Bethel from UK Ministry of Defense (MoD) Defense Procurement Agency declined to speculate on "hypothetical scenarios," but said that the UK for now has the information it needs to continue participating in the program. "We have also made the US aware of the progress that needs to be made ahead of the next milestone on the project in December 2006, [when] we aim to sign the production, sustainment, and follow-on development memorandum of understanding," Bethel said.

Some sources would prefer it said that no problem exists at all. For example, a representative from BAE Systems, the major UK partner involved in JSF, who requested anonymity, said no problems with technology transfer currently exist, nor are they expected to crop up in the next round of negations over technology transfer for the program – the "next milestone" referred to by the MoD's Bethel. The representative said that all of the technology required by BAE Systems for its work on the program through December 2006 have already been transferred. The next transfers of technologies are presently beging negotiated and these are likely to be agreed to and then implemented as planned. Additional sources at the MoD also said that no delays have occurred – at least recently – by the rate and quality of technology transfer from the US to the UK, and that press reports about the future of the program are "baseless speculations."

Tensions are real, though. British trade officials and industry executives, privately and publicly, have been complaining about tightened restrictions on technology sharing between the US and allies for some time (see "UK Embassy Denounces US Tech-Sharing Policies" and "Defense Firms Cope With US Protectionism"). But Frost & Sullivan (Washington, DC) analyst Michel Merluzeau said that while there certainly has been a tightening of policy by the Bush administration regarding sharing of technology with allies, and that this has caused resentment on the part of the British, the UK really doesn't have much choice but to go along with the program. While the UK could theoretically consider alternatives to JSF such as a "navalized" Eurofighter or a modified Rafale, the higher costs and delays in aircraft availability that would result make a pullout from the JSF program highly unlikely.

"Beyond the Saudi order for Eurofighter, which is not confirmed but looks likely, this is it," Merluzeau said. "This is the last manned fighter that the UK will probably produce. If the country is going to maintain core capabilities, it needs JSF."

A bit of drama, of negotiation, may lie behind the talk by members of parliament about "technology sharing" concerns. Given that JSF is a program that will last decades, and could involve the sale 2,000 to 3,000 aircraft, to countries such as Israel, Turkey, and Singapore (see "Israel, Singapore to Participate in JSF Program"), various UK parties are clearly interested in ensuring that the country gets a decent share of the licensing profits – what the recent Parliament committee report refers to as "work share."

"JSF will be a fairly significant chunk of money at the end of the day, and there is a little bit of positioning there, probably, to get a bigger chunk of that money," Merluzeau said. "Sure there may be a security issue, but what it comes down to is: How much is everybody going to get?"

--Ted McKenna and Michal Fiszer

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