Norway to Back out of F-35 JSF Over Industrial Share?
DID reader Endre Lunde drew our attention to an article that was published March 1, 2006 on the official web-site of the Norwegian military. The article is in Norwegian, but Mr. Lunde helps by explaining:
“It is reporting from a recent visit by representatives of the Norwegian MoD and key figures of the RNoAF to the Lockheed Martin JSF research plant. In this article, as it reads, the secretary of state of the ministry of defense (equals deputy minister) states that if there are no signs of improved industrial relations between Lockheed Martin and the Norwegian defense industry by the time the next partnership-payment is due, Norway will resign its JSF partnership. This payment, due in June, amounts to roughly 18 million US dollars. It is said, however, that a notice of intention to withdraw must be posted by April. This means, that if there are no new contracts or general improvement of relations within two months, Norway might just be withdrawing from the JSF development project.”
Norway is a Tier 3 JSF consortium member who joined on June 20, 2002 with a $125 million contribution. Gripen International director of sales Bob Kemp seems to think withdrawal is a real possibility, and Mr. Lunde adds:
“This improvement, or new contracts, must be considerable, as contracts have been lagging behind for quite some time. About one year ago, representatives from Lockheed Martin visited the Norwegian parliamentary defense committee, and promised improvement and more contracts. After this meeting, the leader of the committee at the time announced that the JAS-39 Gripen was back on the table. This was scorned by most as an attempt to play hardball with Lockheed Martin. Whatever it was, it did not work, and now discontent from politicians is obviously blooming again.
Reader should note that the JSF consortium is a fairly strict meritocracy, thanks in part to a philosophy of Cost as an Independent Variable. That is to say, cost is not the result of other decisions, it is a performance criterion to which other decisions may bend. At the press conference announcing Turkey’s Tier 3 membership, Brigadier General Jack Hudson explained how program procurement works:
“Eventually Turkey will have one person in our program office as a level three partner. That person will be what we call a National Deputy for Turkey. Each country has that person. They will also be involved in the day-to-day activities in the program office as our other partner countries are so we have them fully integrated in the office in that sense. So they’ll see a great deal of information on the program.
Then on the industry side what happens is, as you know, industrial participation is worked on a best value or a best athlete process. It’s a competitive process amongst industries across the board, principally through our partner countries. That’s done by Lockheed, Pratt, GE [General Electric] and their principal partners, subs [subcontractors] and suppliers. That’s done on a basis that’s controlled through processes that are governed by the State Department and DoD as to what technologies are used in the industrial processes.
So they’ll be able to work that on a competitive process on the industry side, and then within the government side they’ll have that one person in the office that will work with us on a day-to-day basis within the program.”
Unlike typical European projects, therefore, work share is not guaranteed and each country’s industries must compete for subcontracts. Some, like Holland’s Stork Aerospace, have done exceedingly well. Our Benelux correspondent David Vandenberghe even points out that Belgium’s Barco recently picked up a subcontract from L-3 Communications, to provide technology for the F-35 Joint Strike Fighter (JSF) Panoramic Cockpit Display (PCD). Yet Belgium was the only country invited into the JSF consortium who refused participation.
Endre Lunde adds:
“It should also be noted that the committee leader that made the statement, and the deputy minister that made this one, are of the same political party, Labour. Another interesting note: he is visiting the Gripen production plant next week. So this could be a repetition of last years game of hardball, putting pressure on Lockheed Martin at the same time as they are flirting with Gripen, or it could be the real thing, and Norway might just be backing out of JSF.”
Norway is also a minor member of the Eurofighter consortium. Will they stick with the versatile, mid-range 5th generation F-35 JSF? Look to the slightly higher-end Eurofighter, with its twin engines for long range patrol over the sea lanes? Or will they step away from both options and join its neighbour Sweden and fellow NATO members The Czech Republic and Hungary as operators of the less expensive, shorter range JAS-39 Gripen? Slower than expected sales mean that the Gripen’s workforce has suffered layoffs, which may spark procurement concerns re: long term modernization support. On the other hand, Saab just got a SEK 600 million ($76.4 million conversion as of Dec 20/05) Gripen modernization infusion from the Swedish government as a spin-off from the nEUROn UCAV program.