Capturing "Fortress Europe" - Business, Politics and the Pentagon's Biggest Ever Contract

US defence contractors were suffering from a nasty outbreak of peace in the 90s. The Joint Strike Fighter, a "multi-service" aircraft, was the first military acquisition programme co-developed and co-produced by the Pentagon and a number of foreign allies and businesses. The Paul Dubrule Chaired Professor of Sustainable Development Ethan Kapstein explains the political intrigues behind how the JSF was conceived "with the foreign market in mind", even over the protests of much of Washington's top brass and a leading defence advisory board.

by Ethan Kapstein
Last Updated: 23 Jul 2013

The contract for the "multi-service" aircraft, the Joint Strike Fighter may ultimately be worth around $200 billion. The JSF represents the first acquisition programme to be both co-developed and co-produced by the US government with a number of foreign allies and businesses. But as the Paul Dubrule Chaired Professor of Sustainable Development Ethan Kapstein explains, this was done over both the original objections of Pentagon top brass, and one of the US government's most influential defence-related advisory board's. Collaboration would, after all, almost certainly involve transferring some of the most advanced American military technology. Why, then, did the project develop the way it did?

Perhaps unsurprisingly, major and long-term economic, security and competitive advantage concerns came into play during the period in question. As Kapstein relates in detail, the post-Cold War early 90s saw swift and dramatic reductions in both American defence spending and a halving of the number of aerospace companies able to bid for major defence contracts. Washington's search for a "cost effective" advanced strike aircraft able to meet the needs of both the Air Force and Navy for the first half of the 21st Century had many fierce domestic detractors. The political, financial and technological obstacles were immense, but a new dimension was added when a task force strongly urged that the JSF be developed "with the foreign market in mind". Significant foreign sales would obviously mean longer production runs, resulting in eventual lower costs per aircraft.

The author discusses the remarkable history of the JSF's coming to being against the political and economic backdrop of the mid-term Clinton era - not the fattest of times for most US contractors. The White House did, however, come to feel the contractor's pain, responding aggressively to the industry's intense desire to capture a far, far greater share of foreign markets - a grand stratagem which, it was soon decided, stood its best chance of bearing fruit mainly through the JSF programme.

In Kapstein's considered opinion, the driving force behind virtually every US government decision with regard to the JSF's development was as part of its desire to lock in as many allied governments as possible, meaning any co-dependence on weaponry development would be very beneficial to the US defence industry for the foreseeable future. He relates the current evolution in the highly complex and strategically convoluted methods by which state's now usually procure high-tech weaponry. Increasingly, governments are looking to co-development and co-production as "second-best solutions" to what are often the only feasible alternatives: these typically being either very expensive self-reliance, or risky dependence on imports. Kapstein views the development of the JSF - which saw the involvement of dozens of contractors in Europe, Canada and Australia - as "a Trojan Horse, entering foreign markets with the promise of job creation and technology transfer."

Indeed, the pressure on Lockheed Martin and on Boeing -- the only two American contractors capable of developing the JSF -- was so intense that the consequences will strike many as quite perverse. The JSF was possibly the last competitively granted contract for manned jetfighters in America, (which Lockheed won), but more subcontract work was eventually promised to foreign firms than was proportional to their respective governments' inputs. Clearly, an enormous amount of American tax dollars were being used to advance the JSF with a view towards probable - but by no means guaranteed - extensive and very long-term sales abroad. (The fighter has yet to go into actual production.) However, Kapstein concludes his essay with a detailed account if how such co-development and co-production projects have typically proven very problematic from both economic and security standpoints in the past. This begs the question: should defence planners be quite so readily responsive to the financial objectives of their domestic defence industries by promoting the type of intensive and expensive multinational collaboration involving such types of high-tech weapons systems?

Survival, August 2004

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