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07 June 19. German spat over Airbus could spoil fighter fest at Paris Air Show. A lingering dispute between German lawmakers and Airbus could nix immediate plans to move forward with a future Franco-German-Spanish fighter aircraft, Defense News has learned.
The kerfuffle goes back to a February request for information by members of the Bundestag’s Budget Committee. Citing the government’s role as a major shareholder in the company, lawmakers called on the administration to provide in-depth information about Airbus locations, programs and management equities throughout Europe.
Airbus is one of two prime contractors for the Future Combat Air System, an ambitious project to field a sixth-generation fighter aircraft by 2040. The envisioned weapon also includes new sensors, drones and a complex data infrastructure, making it Europe’s preeminent industrial project for decades to come.
Lawmakers in Berlin are worried that German defense-industry interests, presumably channeled through Airbus, could get the short shrift once substantial contracts are up for grabs amid French competition, led by Dassault.
The Budget Committee reiterated its request for the company deep dive on June 5, when members approved the initial batch of funds for the FCAS program: $37 million for a study on propulsion options.
Lawmakers inserted a note into their approval text that makes answering the February request a condition for entering into follow-on agreements with France.
Meanwhile, officials in Paris and Berlin have been planning signing ceremonies for such pacts with Ursula von der Leyen and Florence Parly, the German and French defense ministers, respectively, at the Paris Air Show in mid-June. It’s expected the pair will ink the concept study plan and a key governance document called the framework agreement.
Meanwhile, the Spanish defense minister, Margarita Robles, is expected to be on hand to sign the program’s memorandum of understanding, a more high-level, vague text beginning Madrid’s road to full participation.
As of Friday, lawmakers had yet to receive the requested information on Airbus, which is to include an analysis of management personnel down to the third tier throughout different locations, separated by programs and individual job functions. As June 10 is federal holiday in Germany, that leaves four business days next week before the Paris Air Show begins.
An Airbus spokesman told Defense News on Friday the company is working to resolve the issue and is coordinating with the government.
A Defence Ministry spokesman did not immediately return an emailed request for comment.
Documents obtained by Defense News suggest that a previous back-and-forth between the Budget Committee and Airbus, through the Ministry for Economic Affairs and Energy, left a bit of bad blood, raising the question of whether the company will comply at all.
While executives provided some information — forwarded in a confidential letter to the Bundestag by the ministry on April 26 — Airbus largely claims the detailed data demanded by the committee would needlessly reveal competitive secrets.
“Airbus, in return, asks for information about the background of the request,” the company’s written response states. “The question must be raised whether other companies where the German government is a shareholder, like Deutsche Bahn [the German rail service], is subject to similar requests.”
The company claims to have given the administration a detailed personnel breakdown by subsidiary and nationalities in 2018, which was also offered to committee members. According to Airbus, no lawmakers were interested.
Airbus Defence and Space, which would lead the conglomerate’s work on FCAS, is based in Ottobrunn near Munich, Germany. As of December 2018, roughly 40 percent of the subsidiary’s employees were based in Germany, around 22 percent in France, 27 percent in Spain and 12 percent in the United Kingdom, the company wrote to lawmakers in April.
As the FCAS program progresses, Budget Committee members want the government in Berlin to safeguard a 50-50 cost and workshare plan with France. (Source: Defense News)
07 June 19. U.S. starts ‘unwinding’ Turkey from F-35 programme over Russia defence deal. The United States on Friday raised the stakes in its standoff with Turkey over Ankara’s deal to acquire a Russian air defence system, laying out a plan to remove the NATO ally from the F-35 fighter jet programme that includes immediately halting any new training for Turkish pilots on the advanced aircraft.
Acting U.S. Defense Secretary Patrick Shanahan sent a letter to his Turkish counterpart, seen by Reuters on Friday, that outlined how Turkey would be pulled out the programme — unless Ankara changes course.
Reuters on Thursday first reported the decision to stop accepting more Turkish pilots for training in the United States, in one of the most concrete signs that the dispute between Washington and Ankara is reaching a breaking point.
The United States says Turkey’s acquisition of Russia’s S-400 air defence system poses a threat to the Lockheed Martin Corp F-35 stealthy fighters, which Turkey also plans to buy. The United States says Turkey cannot have both.
Shanahan’s letter explicitly states there will be “no new F-35 training.” It says there were 34 students scheduled for F-35 training later this year.
“This training will not occur because we are suspending Turkey from the F-35 programme; there are no longer requirements to gain proficiencies on the systems,” according to an attachment to the letter that is titled, “Unwinding Turkey’s Participation in the F-35 Programme.”
Turkish personnel already in the United States will see their training on the F-35 discontinued at the end of July.
In his letter, Shanahan also warned Ankara that its deal with Moscow risked undermining its ties to NATO, hurting the Turkish economy and creating over-dependence on Russia.
“You still have the option to change course on the S-400,” Shanahan wrote.
The Turkish lira declined as much as 1.5% on Friday before recovering some losses. The currency has shed nearly 10% of its value against the dollar this year in part on fraying diplomatic ties and the risk of U.S. sanctions if Turkey accepts delivery of the S-400s.
Turkey is one of the core partners in the F-35 programme and expressed an interest in buying 100 of the fighters, which would have a total value of $9bn at current prices.
Turkish companies produce some 937 parts of the F-35, largely for the aircraft’s landing gear and centre fuselage, the Pentagon says. The United States is now planning to move that production elsewhere, ending Turkey’s manufacturing role by early next year.
The Pentagon believes that it can minimize the impact on the broader programme if Turkey abides by the U.S. timeline.
“What we are doing is working to do a very disciplined and graceful wind down,” Ellen Lord, an under secretary of defense, told reporters at the Pentagon.
She noted that nothing done to date was “irreversible.”
But if Turkey were removed from the F-35 programme, the ramifications would be felt far beyond the Turkish air force. It would be one of the most significant ruptures in recent history in the relationship with the United States, experts said.
Strains in ties between the United States and Ankara already extend beyond the F-35 to include conflicting strategy in Syria, Iran sanctions and the detention of U.S. consular staff in Turkey.
Still, Turkey seems to be moving ahead with the S-400 purchase, regardless of the U.S. warnings. President Tayyip Erdogan said on Tuesday it was “out of the question” for Turkey to back away from its deal with Moscow.
Defense Minister Hulusi Akar said on May 22 that Turkish military personnel were receiving training in Russia to use the S-400, and that Russian personnel may go to Turkey.
The head of Russian state conglomerate Rostec, Sergei Chemezov, was quoted as saying on Friday that the country would start delivering S-400 missile systems to Turkey in two months.
Erdogan said the United States had not “given us an offer as good as the S-400s.”
Still, Lord held out hope for Turkey, noting that none of the U.S. decisions so far were irreversible.
“We’re hopeful that they will stop the acquisition of the S-400. We would very much like them to stay in the (F-35) programme,” Lord said. (Source: Reuters)
07 June 19. The Royal Navy Has Big Aircraft Carrier Plans (Armed with F-35s). After deep cuts in 2010 the Royal Navy is down to just 19 surface combatants including 13 frigates and six destroyers. Not all of the vessels are operational at the same time. Mechanical problems and difficulty recruiting sailors in the recent past has compelled the navy temporarily to lay up several warships.
Penny Mordaunt took over after Prime Minister Theresa May in early May 2019 fired former defense secretary Gavin Williamson for allegedly leaking sensitive information to the press. Mordaunt on May 15, 2019 announced the Ministry of Defense would develop a new “National Carrier Policy.”
“We will have one carrier available at very high readiness at all times,” Mordaunt said.
The Royal Navy is building up a fleet of two, 70,000-ton-displacement carriers. HMS Queen Elizabeth commissioned in December 2017. Sister ship Prince of Wales is fitting out for commissioning as early as 2019. Queen Elizabeth could deploy with Royal Air Force F-35B stealth fighters starting in 2020.
Together, the flattops cost around $10bn to develop and build.
“Nothing symbolises our intent and ambition for global Britain and has captured the hearts of our citizens more than our new carriers,” Mordaunt said. “Nine acres of sovereign territory that will give us the ability to project power from anywhere in the world.”
“And when Prince of Wales joins [Queen Elizabeth] in the fleet in the near future … we will have one carrier available at very high readiness at all times,” the defense secretary added. “And this will match our strategic nuclear deterrent with a conventional one. I want to make sure that we make the most of this incredible sovereign capability.”
Money as always is a problem. The U.K. armed forces have struggled in recent years to maintain the pool of forces from which the task force and at-sea deterrence would draw. Periodic cuts since the fall of the Soviet Union in 1991 have shrunk the British military roughly by half.
The most recent rounds of cuts starting in 2010 eliminated two aircraft carriers, two amphibious ships, four frigates, an army brigade, more than a third of the army’s tanks and artillery and all of the air force’s Harrier jump jets and maritime patrol planes. Uniformed manpower dropped by 30,000.
As recently as late 2017, there were rumors that the United Kingdom might try to offset the cost of the country’s exit from the European Union by further cutting the military. Army brigades and amphibious ships appeared to be particularly vulnerable.
The army recently announced it would upgrade only 148 of its 227 Challenger 2 tanks.
British military spending has stabilized at around $55bn annually, thanks in part to a transfer of funds from the $13bn reserve account for the navy’s four new Dreadnought-class ballistic-missile submarines. But even $55bn a year might not be enough to maintain both carriers and their aircraft plus a robust fleet of naval surface combatants that, among other missions, escort the carriers during wartime.
After deep cuts in 2010 the Royal Navy is down to just 19 surface combatants including 13 frigates and six destroyers. Not all of the vessels are operational at the same time. Mechanical problems and difficulty recruiting sailors in the recent past has compelled the navy temporarily to lay up several warships.
Buying new aircraft carriers instead of frigates and destroyers was a “bad idea,” the Lord Houghton of Richmond, former chief of the defense staff, in May 2019 told a House of Commons committee.
The carriers were “affordable only to the detriment of the surface fleet,” Lord Houghton said, according to The Telegraph. Giving evidence to the National Security Strategy committee, Lord Houghton said that as vice chief of the defense staff in 2010 he was not in favor of buying two aircraft carriers and new F-35 stealth jets for the air force whilst also expecting the defense budget to include the nuclear deterrent submarines.
Spending on such expensive equipment “massively unbalances the amount of money to spend on capabilities in more active need of use,” he said.
Mordaunt for her part said she was “not going to be shy about asking for more money” to keep the carriers afloat while also buying at least 13 new frigates to replace older ships. (Source: News Now/https://nationalinterest.org)
05 June 19. Bundestag Budget Committee to Vote on Initial Funding for FCAS. The German Parliament’s Budget Committee is set to approve initial funding of €32.5m on Wednesday to launch the development of the next-generation Future Combat Air System with France, Der Spiegel reported this morning. The committee’s approval is a pre-condition for the official award of the program’s first concept study contracts, scheduled to be signed at the Paris Air Show which begins here June 17, to Dassault Aviation and Airbus Defence and Space for the New-Generation Fighter (NGF), and to Safran and MTU Aero Engines for its engines. The development cost of the FCAS project is estimated at about €8bn by 2030, according to a report prepared by the Federal Ministry of Finance for the deputies of the Budget Committee, and seen by Spiegel. This figure does not include production costs for the future aircraft, which is to enter service from 2040 onwards, nor of its networked environment. The Budget Committee’s decision is especially significant as it would, for the first time, release German funding for research into the FCAS system, which is intended to initially support, and subsequently replace, the Tornado, Eurofighter and Rafale combat aircraft operated by the two countries. Work on the concept study for the engines is already underway, in advance of the bilateral agreement, as the French had advanced their own money so that the work on the project could start at the beginning of this year, Spiegel reported.
In September, much more expensive concept study contracts are due to be awarded for the aircraft itself, the cockpit and the control electronics. Insiders estimate the volume of these works at many hundreds of millions of euros. Therefore, the French side does not want to start with that before the contentious export issue is resolved. Paris is openly threatening Berlin to end the project if there is no consensual solution.
Dispute over export rules
But due to a dispute over export rules for the new programs, the whole project has been slowed down in recent months. “The budgetary funds will send an important political signal,” Paris now says.
The FCAS agreement is overshadowed by a dispute between the German and French governments over the question of how FCAS may be exported to countries outside of the EU and NATO. The German SPD socialist party, a partner in Germany’s governing coalition, has hitherto prevented an agreement with its restrictive attitude.
Germany’s Greens criticized the planned conclusion of an agreement with France. “The Federal Government is more interested in a nice signing ceremony in Le Bourget than clarifying open and highly sensitive issues such as export control for the fighter jet,” said defense expert Tobias Lindner, who is also a member of the Budget Committee.
So far, Paris is pressing to sell the future fighter worldwide, free of German restrictions. Unlike Germany, France exports on a large scale to states that Germany considers as problematic, such as Saudi Arabia and other Gulf nations. Germany, on the other hand, pursues a restrictive export policy which prohibits arms exports to countries involved in war or in crisis areas.
Belgium and Spain could participate
In addition to the development of a new main battle tank, a new maritime patrol aircraft and other programs, the Franco-German FCAS project is considered the centerpiece for the development of a joint German-French defense industry and a common defense policy of the European Union. Belgium and Spain have also declared their willingness to join the project; while Spain is expected to sign on to FCAS at the air show, France is expected to veto Belgium’s participation because it has ordered the American-made F-35 combat aircraft. (Source: defense-aerospace.com)
02 June 19. Turkey ‘determined’ to press ahead with Russian air defence deal. President Erdogan says ‘no question of stepping back’ despite US pressure. Turkey is determined to push on with the purchase of an air defence system from Russia, President Recep Tayyip Erdogan said on Tuesday amid a looming crisis with the US over the acquisition. Speaking in the wake of reports that Ankara could seek a delay in the arrival of the S-400 system, Mr Erdogan said that the plan was going ahead. “The steps we have taken are clear,” he told reporters after attending prayers for the Muslim holiday of Eid al-Fitr. “We have made an agreement, and we are determined. There is no question of taking a step back.” The Turkish president reiterated that he had offered to form a technical committee to examine US concerns that the S-400 would comprise the security of the F-35 fighter jet that is being adopted by a series of Nato member states. He made no comment as to whether or not that offer had been accepted by the US, despite reports that US President Donald Trump had agreed to the idea during a phone call with Mr Erdogan last week. US officials have repeatedly warned Turkey that it faces sanctions if it takes delivery of the advanced Russia system — a process that Ankara and Moscow have said could begin as soon as this month. Congress is expected to mandate Mr Trump to impose punitive measures under the Countering America’s Adversaries Through Sanctions Act (CAATSA), as well as removing Turkey from the F-35 jet programme. (Source: FT.com)
02 June 19. US Hits EU with Ultimatum to Save Close Ties to American Arms Industry – Report. The Western alliance has come under increasing strain in recent years amid President Trump’s insistence that NATO’s European members commit more to defence spending, and reports that the president has repeatedly raised the issue of withdrawing Washington from the bloc. The Trump administration has presented America’s European allies with an “ultimatum” demanding that the countries make changes to their defence policy to ensure that Europe remains closely linked to US defence manufacturers in the creation of new arms, El Pais has reported, citing documents from a meeting in Washington, DC on 22 May between US officials and members of the EU’s Political & Security Committee. According to the Spanish newspaper, US officials warned their EU counterparts that they may be left alone in the face of threats, supposedly including Russia, if Brussels rejected the US defence companies’ participation in the creation of new weapons systems.
At the meeting, State Department Deputy Assistant Secretary for European and Eurasian Affairs Michael Murphy reportedly warned European officials that EU members’ citizens “would not be impressed” if, in the event of a crisis and the failure of European defences, the continent was armed only with European weapons.
In addition, Murphy also warned that “if the language” of Europe’s arms development legislation and guidelines were not changed to allow US participation, “the EU will have to choose: either renounce the use of the best technological capabilities which exist or develop their own.”
Murphy also hinted that the lack of interoperability between US and EU weapons systems may mean that at some point, their armies may not be able to fight together in defence of the continent from external threats.
The 22 May meeting was reportedly aimed at reaching common ground on the issue of the standards of the European Defence Fund and arms projects for the Permanent Structured Cooperation Program, an initiative launched by Brussels in 2017 attempting to increase Europe’s independent military power which the US has complained prevents companies from outside the EU from taking part.
The warning was the latest in a series of threats by Washington going back to late 2018 amid European efforts to develop independent military capabilities. Last month, the Financial Times reported that Washington had threatened the EU with ‘retaliation’ if the bloc went ahead with its plans, with US undersecretaries of defence and state Ellen Lord and Andrea Thompson sending a letter to EU chief diplomat Federica Mogherini expressing their ‘deep concern’ over the EDF and PESCO’s proposed rules. “It is vital…that independent EU initiatives like EDF and PESCO do not detract from NATO activities and NATO-EU cooperation,” the letter said.
In March, US Ambassador to Europe Gordon Sondland accused Brussels of “stubbornness” and “protectionism” with its defence project rules and warned the US might respond with actions which wouldn’t “be positive for either side.”
According to El Pais, undersecretary Murphy’s comments represent “the biggest threat by Washington since Brussels began to promote the Defence Union.” (Source: defense-aerospace.com/Sputnik News)
02 June 19. European defence industry wrongfooted by Saudi weapons ban. Executives say German response to Khashoggi killing risks undermining co-operation. Suing one of your biggest customers may seem unthinkable, but the chief executive of Airbus, Europe’s biggest aerospace and defence group, will not rule it out. Germany’s decision last October to ban arms exports to Saudi Arabia following the murder of journalist Jamal Khashoggi threatens a border contract that Airbus has with the kingdom. The company took a €297m provision in the first three months of this year as it is currently unable to complete the contract. The unilateral move by Berlin stopped other defence companies from selling military equipment to Saudi Arabia that was jointly developed with German companies, or from shipping arms that contained German components. The kingdom has for years been one of the world’s largest arms importers: IHS Markit, the research group, calculated it was the biggest importer of defence equipment and services by value in 2017. Its purchases have risen sharply in recent years as the country has pursued an assertive regional policy, including military intervention in Yemen. “Going legal [over the export ban] is one of the options we have to consider,” said Guillaume Faury, who took over as the head of Airbus in April. The situation, he added on a trip to London last month, “is having a significant impact on the number of contracts that we have with customers”. Airbus is not the only company counting the cost. BAE Systems, which as the lead industrial partner for the four-nation Eurofighter consortium in the Gulf kingdom is responsible for the maintenance and support of its 72 Typhoon jets, said in February the decision could imperil its contractual obligations. The government-to-government agreement for the jets is BAE’s single biggest export contract. Germany’s Rheinmetall said it was still waiting to deliver 90 military trucks and trailers to the kingdom, worth around €120m.
Germany’s decision was widely welcomed by human rights campaigners, but not followed by other European governments whose response to the Khashoggi killing was limited to public condemnation. For Europe’s defence industry, Germany’s move raises a deeper concern. Some executives fear that the cross-border partnerships that have helped the industry thrive in the face of limited national budgets and develop sovereign state-of-the art kit like the Typhoon, could be undermined. Europe’s defence industry is among the world’s top exporters; it generated around €100bn in turnover in 2016 and employed some 500,000 directly, according to the latest figures available from its trade body. “This is clearly very problematic,” said Nick Cunningham, analyst at Agency Partners. “The UK, France and Germany are not big enough individually or even collectively to develop state-of-the-art kit . . . It has to be done on a partnership basis.” Future partnerships could be at risk. There are plans to develop a European drone and Germany and France, through Airbus and Dassault, have teamed up to develop a new fighter aircraft, the future combat air system (FCAS). Another project, to jointly develop and build a Franco-German main ground combat system (MGCS), could also be at risk. Krauss-Maffei Wegmann, the German defence company that builds the Leopard tank, formed a joint holding group with France’s Nexter in 2015 to this end. “Without a practical and clear set of rules we will not be able to work together in the way we want to work together. This concerns the exchange of technology and information across borders,” said a KMW spokesman.
Clarity on Germany’s export rules is key, said Mr Faury, so that other European nations “understand they can trust Germany as a partner”. Alessandro Profumo, chief executive of Italy’s Leonardo, which is a partner in the Eurofighter consortium, echoed those sentiments, saying in a recent interview: “What worries me more is that we risk fracturing the creation of a European defence system.” Eric Trappier, chief executive of Dassault, declined to comment specifically on FCAS but said on “co-operative programmes, states must agree with defined rules as early as possible”. The issue has unleashed a fierce debate about which nation should have control of exports in the case of pan-European programmes. Some believe the country that is the prime contractor on an export deal should also issue licences which are valid across EU partners.
In the case of Typhoon and Saudi Arabia, the UK, via BAE Systems, is the prime. Philippe Petitcolin, chief executive of Safran, the French defence and aerospace group, is an advocate of this idea. “I don’t think that this decision is going in the right direction for Europe,” he told the Financial Times. Export decisions, he believes, should be determined by the state that is the leader on a particular programme, not by the government of each country involved. “In a way Germany is keeping the other partners hostage. If you belong to a community you have to respect the community. If you play the game, you have to play by the rules of the game,” he added. German and French officials earlier this year agreed the outlines of a new defence export regime, which would limit the ability of one partner to block exports of jointly developed defence products to third countries. However, officials caution that the details have yet to be worked out — most notably the thresholds that would still allow one country to prevent exports of joint goods by another. “Companies are deeply worried that they won’t be able to do big European defence projects if there are no common rules on exports,” said Ulrike Franke, a defence analyst at the European Council on Foreign Relations. Douglas Barrie, senior fellow for military aerospace at the International Institute for Strategic Studies, says tensions between partner nations is nothing new. Germany and Sweden have traditionally had more restrictive export policies. Nor are the configurations of partnerships set in stone, he points out. Plans to develop the European fighter aircraft in the 1980s initially included five nations — the UK, West Germany, Spain, Italy and France. Subsequent disagreements over issues such as requirements ended with France going it alone and developing the Rafale fighter.
The other four nations built the Eurofighter. Today, there are two competing programmes to build the next-generation fighter: FCAS, the partnership between France and Germany, and a UK-led project called Tempest which includes BAE and also Italy’s Leonardo. “Whatever industrial collaborations we will see at the end of this process, it will not be the current partnership that we see,” said Mr Barrie. Privately, executives say any long-term resolution can only come at a political level. The industry has counted some progress. Berlin extended its embargo for a further six months in March but, in a concession to the UK and France, the government agreed to extend for nine months export licences for weapons developed jointly with Germany’s EU partners that had already been granted. In a letter to the parliamentary committee on arms export control written in April but only published last month, UK foreign secretary Jeremy Hunt welcomed the move but added that on “other collaborations and bilateral programmes the government is seeking further clarifications from the Germans”. Executives cautioned that the actual situation was not as clear-cut. Given Germany’s importance within Europe and ambitions by the government to raise its military budget to 1.5 per cent of gross domestic product by 2024 — although still short of the official Nato target of 2 per cent — executives say it is important to keep the country as a partner. Co-operation will have to remain the status quo. “In the long run we will have to consolidate our development expertise . . . if we are not going to be under a lot of pressure from the US,” said Mr Petitcolin of Safran. The FCAS programme, he added, “will be a real test of the future of European defence”. “We will have to learn by walking . . . it’s a learning curve and it won’t be a piece of cake.” (Source: FT.com)
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