A Secure Defense Industry?

Article excerpt


On July 9, Defense Secretary Robert Gates announced the $39 billion competition for a new fleet of U.S. Air Force refueling tankers would be reopened. The General Accountability Office (GAO) had upheld a protest by Boeing against the award last February of the contract for 179 tankers to a consortium headed by Northrup-Grumman, but using the Airbus A330 airliner built by European Aeronautic Defense and Space Company (EADS). Boeing has built every previous Air Force tanker. GAO auditors found the competition had been anything but fair and open.

But is fair and open the real issue in the contest between rival industrial policies in the international arena? On June 19, the day after the GAO made its report public, France released a defense white paper that included its advocacy of a stronger European industrial base to compete against the United States. EADS is mainly a French-German corporation and is Europe's largest defense firm.

The white paper notes that due to the massive cuts in defense spending and force levels across Europe since the end of the Cold War, Individual European countries can no longer master every technology and capability at the national level. France must retain its areas of sovereignty, concentrated on the capability necessary for the maintenance of the strategic and political autonomy of the nation: nuclear deterrence; ballistic missiles; SSNs [nuclear submarines]; and cyber-security are amongst the priorities. As regards the other technologies and capacities that it may wish to acquire, France believes that the European framework must be privileged: combat aircraft, drones, cruise missiles, satellites, electronic components etc., although procurement policy must include acquisitions on the world market.

The throwaway line about acquisitions on the world market should not detract from the key term privileged. It means a bias to Buy European in defense contracting. If European firms are to be privileged within the European Union, shouldn't American firms be privileged within the United States? Of course they should.

The Airbus A330 has components built in Britain, Germany, France and Spain, the result of work sharing negotiations between the governments. This is not very efficient, but Airbus has received heavy government subsidizes from its inception. The U.S. is still pursuing action at the World Trade Organization against EADS for its use of illegal export subsidies. This WTO case should have disqualified EADS from the Air Force bidding, but it did not.

The French white paper's defense industry section is in the chapter titled European Ambition. …