Eric Trappier, the CEO of French airplane maker Dassault Aviation, was heard today by the Foreign Affairs, Defense and Armed forces committee of the French Senate, and delivered a strong message on the state of the trilateral Future Combat Air System project. To sum it up bluntly, he said that the demands Germany and Spain are making lead to an unworkable project.
Here is a video of the hearing, in French. A transcript will be published by parliamentary services in the week to come, but for now here are the highlights:
- The Joint Concept Study (JCS), which deals with the operational and technical feasibility of the overall project, will be finalized by summer, with one to two concept proposal to be presented to the three states.
- Meanwhile, the various companies involved are finalizing the studies on the demonstrators (engine, airframe, sensors) to be developed before the actual systems to reduce risk. Phase 1A is underway. A Phase 1B is under negotiation, it would amount to 700M€ and consist in a detailed design of the demonstrators. It would be followed by Phase 2, the actual manufacturing of the demonstrators, for 2 billion euros. Afterwards, the development and manufacturing of the actual production systems would run in the tens of billions of euros.
- Since Spain joined the program in summer 2020, the states have agreed that each would provide one third of the funding, and receive one third of the workshare.
- During negotiations from June to December 2020, Dassault, which previously had more than 50% of workshare on the NGF, the next generation fighter at the heart of FCAS, and was designated as the design authority, has agreed to reduce it workshare to one-third. This puts Airbus Defense & Space , which is the company that both Germany and Spain have designated has their lead on NGF, in a majority position with the remaining two-thirds.
- Furthermore, whereas previously sub-system work packages were split between either Airbus or Dassault, with one of these being the design authority on each package, the states have decided to have joint design authorities on half one the packages. Trappier underlines that in such a situation, noone is truly responsible for the design. In addition, on the other 50% of the work packages, Dassault left half of those to Airbus as design authority, which means Dassault is now design lead on only roughly 25% of the work packages. Trappier stated “reflecting back to this situation, I think we have gone too far”
- In the end, Dassault proposed this workshare arrangement to the states, and Germany and Spain refused, because they thought Airbus did not get enough workshare and design authority. Trappier did not budge, because for him increasing the share of Airbus deprives him of the tools he needs to ensure the program meets its specifications and is delivered on time. He cannot do so if he has no leverage towards his subcontractors. So that is where the negotiations blocked. To illustrate his point, he took the example of the flight control system: it is one of Dassault’s main areas of expertise and integral to the performance and safety of the plane, but Germany and Spain are now claiming one third each of the workshare, and want this expertise duplicated in Airbus centers in Manching, Germany and in Spain. He showed the irony of this, since the Airbus team in charge of flight control systems is located in Toulouse, France. Germany is also claiming joint design authority on the cockpit’s man-machine interface, the overall stealth design, and the mission system.
- On the intellectual property issues that recently surfaced in the press, he underlined that there are two types of actual property: foreground, which is what is developed during the project, and background, which is the knowledge and insights acquired by the company throughout its history. He agrees that foreground should be shared among partners, but not the background, which is the property of Dassault and its source of competitive advantage. If he were to share it, meaning that he would explain to all partners the reason behind the choices that are made, then this expertise would be acquired by the other partners, and if the project stopped in two years they would now be able to compete with Dassault. He strongly reminded the senators that he said so since the beginning of the project, and recently reminded the three military procurement agencies of that.
- Speaking the plan B that he mentioned this week while presenting Dassault’s 2020 results, he explained that it is not that France would build the NGF alone, but that rather a different governance structure has to be found, it which Dassault remain the actual design authority, rather that the authority in name only the three-thirds split results in. I take this to means he wants that France funds 50% of the NGF and that he has authority over 50% of the workshare. He used the example of the Neuron stealth UCAV project, in which Dassault had 50% of the workshare, and said it was a good line of thinking.
- On the other components of the FCAS, Airbus has design authority of the remote carrier part. Initially these were thought to be relatively small platforms, but now larger platforms, deserving the loyal wingman or even UCAV designation, are being considered. When he inquired of these would connect to the NGF, he was rebuffed because that is Airbus’s work package.
- He ended by a recommendations to the French political authorities, saying that cooperations should be balanced and win-win. He underlined that Germany has the lead on the Eurodrone project and the Main Ground Combat System future tank project, and is de facto challenging the French leadership on FCAS.
Analysis and path forward
FCAS seems to be in dire straits. To use again of of Trappier’s sayings, “the patient is not in terminal phase but is not doing well”. The main cause of problems seems to be the 33% share of Spain in the project. It removes the French leadership, and consequently makes it impossible to have a main design authority. Furthermore, the Spanish share is unrealistically high and should have been challenged by French political authorities: Spain spent 17B$ (1.2% of GDP) on defense in 2020, to be compared to 50B$ for France (1.9% of GDP) and 49B$ for Germany (1.3% of GDP). As such, it is completely illusory that Spain will order as many FCAS planes and remote carriers as France and Germany, and thus the 30% share will not be able to be maintained in the production phase. However, once a country has done the R&D for a subsystem, switching the production to another country is extremely difficult. Indeed, this has been a common technique in previous European cooperations projects such as A400M: some states (Germany not to name names) announced they would order a large number of aircraft and get a correspondingly large workshare in return, and then, once manufacturing started and the factories could no longer be moved, significantly reduced their orders, keeping the industrial benefits without having to pay the costs.
Another way to look at this is by the number of fighters in each Air Force: Spain has 68 Eurofighters and 72 FA-18As, Germany has 60 Tornado (which will be replaced by Eurofighters and FA-18E/F/Gs, not FCAS) and 141 Typhoons (with teething readiness problems due to low maintenance funding) and France 55 renovated Mirage 2000D, 28 Mirage 200-5F, 105 Rafale B&C and 42 Rafale M. Based on these numbers, the fighters to be replaced by FCAS are 140 for Spain, 140 for Germany and 230 for France, ie 510 in total, suggesting a 27.5%/27.5%/45% split.
A 25%/25%50% split would probably be palatable to Germany and Spain regarding industrial return, and even more to France. It would still ensure a clear design authority for the project, making it much more likely to succeed. If such a deal cannot be reached quickly, the German parliamentary elections, followed by the French presidential elections, will put a stop to the project, making it likely that France will go it alone or find other partners to fulfill its real operational need of having a new fighter in 2040.