Archive for the ‘F-35’ Category

Quietly, the Eurofighter project seems to be running into trouble. First of all, Dassault got the Indian contract and the Indians claim that Rafale is dramatically cheaper. Further, they weren’t impressed by the amount of stuff that is planned to come in future upgrades, whose delivery is still not certain. These upgrades are becoming a problem, as the UK, Germany, and Italy aren’t in agreement about their schedule or about which ones they want. Also, a Swiss evaluation report was leaked that is extremely damning towards the Gripen and somewhat less so to Eurofighter.

This is going to have big consequences for European military-industrial politics. So is the latest wobble on F-35.

This LA Times story about the Boeing 787 Dreamliner (so called because it’s still a dream – let’s get the last drop from that joke before it goes into service) and the role of outsourcing is fascinating. It is partly built on a paper by a senior Boeing engineer which makes among other things, this point:

Among the least profitable jobs in aircraft manufacturing, he pointed out, is final assembly — the job Boeing proposed to retain. But its subcontractors would benefit from free technical assistance from Boeing if they ran into problems, and would hang on to the highly profitable business of producing spare parts over the decades-long life of the aircraft. Their work would be almost risk-free, Hart-Smith observed, because if they ran into really insuperable problems they would simply be bought out by Boeing.

Even in its own financial terms, the whole thing didn’t make sense, because the job of welding together the subassemblies and hooking up the wires doesn’t account for much of the profit involved. Further, the supposedly high-margin intellectual-property element of the business – the research, development, and design of the plane – is only a profit centre after it’s been built. Until they’re done, it requires enormous amounts of investment to get right. The outsourcers were expecting the lowest-margin element of the company, assembly, to carry the costs of developing new products. Whether they were funded with equity or with debt, this implies that the systems integrator model, for aircraft at least, fundamentally restricts innovation.

This is one of the points I’d like to bring out here. Hart-Smith’s paper – you can read it here – is much stronger on this than the LA Times was willing to be. It’s a fascinating document in other ways, too. For a start, the depth of outsourcing Boeing tried to achieve with the 787 is incompatible with many of the best practices used in other industries. Because the technical interfaces invariably become organisational and economic ones, it’s hard to guarantee that modules from company X will fit with the ones from Y, and if they don’t, the adjustment mechanism is a lawsuit at the financial level, but at the technical level, it’s rework. The dodgy superblock has to be re-worked to get it right, and this tends to land up with the manufacturer. Not only does this defeat the point of outsourcing in the first place, it obviates the huge importance of avoiding expensive rework.

Further, when anything goes wrong, the cost migrates remorselessly to the centre. The whole idea of systems integration and outsourcing is that the original manufacturer is just a collection of contracts, the only location where all the contracts overlap. Theoretically, as near to everything as possible has been defined contractually and outsourced, except for a final slice of the job that belongs to the original manufacturer. This represents, by definition, all the stuff that couldn’t be identified clearly enough to write a contract for it, or that was thought too risky/too profitable (depends on which end you look at it) for anyone to take the contract on. If this was finance, rather than industry, it would be the equity tranche. One of the main reasons why you can’t contract for something, of course, is that you don’t know it’s going to happen. So the integrator essentially ends up holding all the uncertainty, in so far as they can’t push it off onto the customer or the taxpayer.

This also reminded me a little of Red Plenty – one of the problems is precisely that it’s impossible to ensure that all the participants’ constraints are mutually compatible. There are serious Pareto issues. There may be something like an economic law that implies that, given that there are some irreducible uncertainties in each contractual relationship, which can be likened to unallocated costs, they flow downhill towards the party with the least clearly defined role. You could call it Harrowell’s U-Bend. (Of course, in the macroeconomy, the party with the least well defined role is government – who you gonna call?)

Anyway, Hart-Smith’s piece deserves a place in the canon of what could be termed Sarcastic Economics.

I suspect that the problems he identifies have wider consequences in the economy. Given that it’s always easier to produce more or less of a given good than it is to produce something different, the degree to which it’s possible to reallocate capital has a big impact on how quickly it’s possible to recover from a negative shock, and how bad the transition process is. I would go so far as to argue that it’s most difficult to react to an economic shock by changing products, it’s next most difficult to react by producing more (you could be at a local maximum and need to invest more capital, for example), and it’s easiest to react by producing less, and that therefore there’s a structural bias towards deflationary adjustment.

Hart-Smith’s critique holds that the whole project of retaining product development, R&D, and commercial functions like sales in the company core, and contracting everything else out actually weakens precisely those functions. Rather than being able to develop new products quickly by calling on outside resources, the outside resources suck up the available capital needed to develop new products. And the U-bend effect drags the costs of inevitable friction towards them. Does this actually reduce the economy’s ability to reallocate capital at the macrolevel? Does it strengthen the deflationary forces in capitalism?

Interestingly, there’s also a presentation from Airbus knocking about which gives their views on the Dreamliner fiasco. Tellingly, they seem to think that it was Boeing’s wish to deskill its workforce as far as possible that underlies a lot of it. Which is ironic, coming from an enormous aerospace company. There’s also a fascinating diagram showing that no major assembly in the 787 touches one made by the same company or even the same Boeing division – exactly what current theories of the firm would predict, but then, if it worked we wouldn’t be reading this.

Assembly work was found to be completed incorrectly only after assemblies reached the FAL. Root causes are: Oversight not adequate for the high level of outsourcing in assembly and integration, Qualification of low-wage, trained-on-the-job workers that had no previous aerospace experience

I wonder what the accident rate was like. A question to the reader: 1) How would you apply this framework to the cost overruns on UK defence projects? 2) Does any of this remind you of rail privatisation?

There hasn’t been much progress on my long-term beef with Martin Kettle for a while. But it’s worth remembering that if the Guardian has a major leading article that isn’t a business/economics story, it’s probably him. And Saturday’s second lead (behind a rather competent finance story) bears the Kettle hallmarks.

Forty years ago the Royal Navy came up with a wheeze to persuade the government to buy a new fleet of aircraft carriers – it claimed that they were actually “through deck cruisers”. There was no need for pretence this week when the £3.9bn order for two superships was signed in Govan. The vessels, to be named after the Queen and her son (another naval wheeze – would any government dare axe Her Majesty?), should come into service from 2014 as the oceanic embodiment of British power.

Well, he could have mentioned that the “new fleet of aircraft carriers” weren’t designed as aircraft carriers, either; the Invincible class originally only carried 5 fighters, intended to chase off Soviet Bear reconnaissance planes rather than to provide serious air defence, and their main mission was as a base for anti-submarine helicopters. The Invincibles’ role as light fleet carriers was originally a desperate hack for the Falklands, which the Navy realised could be built upon.

(And if you want a good story about the CVA-01 decision, why not mention the fact the RAF promised they could provide air cover to British forces anywhere on earth, producing a map to support this on which Australia was about 300 miles north-west of where conventional wisdom would suggest?)

The government is proud, the navy thrilled and the army jealous. The problem is that no one seems to know exactly what the ships are intended to do or how they will be paid for.

Wrong; they will provide fleet air defence, the same for British or allied landing forces, close air support for troops ashore, and a significant air strike capability, with secondary ASW, command and control and logistic roles. They are budgeted for in the defence equipment programme. That is a cheap criticism, though. If Kettle means that we won’t ever need the use of an aircraft carrier, or that they are morally appalling in all cases, why doesn’t he say so?

Nor is it clear what sort of plane, if any, will fly from their decks: the Joint Strike Aircraft, which they are designed to carry, will not be ready in time (and will cost a further £12bn), even if the United States goes ahead with the necessary vertical takeoff version, which is not certain. In the meantime the navy will have to make do with its ageing Harriers.

It’s perfectly clear. Harrier until the F-35 ISD in 2014, thereafter F-35. You’ve just said so yourself. Further, note that Kettle is complaining that the Fleet Air Arm’s Harriers are “ageing” and also complaining about replacing them, within the space of two sentences. Is he even aware, I wonder, that there are Harriers in the RAF as well? And that they are no newer? The argument that the cost of replacing Harrier is all the fault of the Navy is dishonest; the Harriers will wear out, whether they are flying from Illustrious and Ark Royal, the future Queen Elizabeths, or land bases.

And if you’re worried about the Army (they are “jealous”, remember), you should be aware that the Harrier force’s central mission is to support the infantry. The aircraft itself was designed back in 1969 as a specialised close support aircraft, a sturmovik as the Russians would say, one that would be small, manoeuvrable, with a lot of space for weapons, and no requirement for airfields at all. This was why the US Marines, probably the most CAS-minded air force in the world, bought them. Letting the Harrier force go isn’t an option – because we already cut half the RAF’s CAS aircraft two years ago when the Jaguars were decommissioned, and the press didn’t really notice.

For a government facing a tricky byelection in Glasgow, led by a prime minister from Fife, it is easy to understand the attractions of ships built partly in Govan and Rosyth. Last year’s Commons statement giving the go-ahead was greeted by MPs cheering news of work going to their constituencies. What was lacking – and has been since the 1998 strategic defence review set out plans for the vessels – was a discussion of why the ships are needed, or how they can be afforded

And you’re not going to get one here. Viz:

No one doubts the importance of carrier fleets in certain circumstances – Britain could not have fought the Falklands war without Hermes and Invincible. Floating off some future conflict zone or humanitarian disaster, the new ships will prove valuable. But so might many other forms of military resource, some of which will be sacrificed to pay for these aircraft carriers. The army lacks secure patrol vehicles and helicopters, but the Future Lynx helicopter programme looks likely to be scrapped in order to bail out a defence budget that is already overspent and must now fund naval gigantism.

Many other forms, eh. Fortunately the Matra-BAE Dynamics Ideological Handwave appears to be cheap and available off the shelf. The FLYNX project ought to be scrapped anyway, because it’s a procurement zombie – it’s been going on for ten years, not a single helicopter has been procured, but no less than three different sets of capability requirements have been written, at astonishing cost, and the current solution is to buy another lot of the same helicopters, which don’t actually cover the LIFT element of the requirement (which is the bit about racing to the succour of the wounded in Afghanistan, Minister), and are rather large and expensive for the FIND element, which is about sneaking about spying, and could better be done by robots, more smaller and cheaper helicopters, or by ones big enough to cover the LIFT requirement with the spooky gear bolted on.

Regarding the “secure patrol vehicle” thing, here’s Armchair Generalist. Sure, everyone would like to see more of them. But they are relatively cheap, and in fact the government keeps buying more of them. Which is a pity, because they are completely useless for anything other than Iraq and some missions in Afghanistan (the ones where you don’t need either heavy metal, or mobility). But politicians love them because they show We Care. As far as Army procurement goes, the generals are more concerned about the FRES project, which is costed at £14bn and has already spent hundreds of millions of pounds without building a single vehicle. Many people think it is actually physically impossible.

Further, the Invincible class lasted 30 years; HMS Fearless was laid down in 1964 and managed to launch Chinooks full of SBS men into Afghanistan in 2001. Will we be in Iraq or Afghanistan in 4 years, let alone 14 or 40?

So we didn’t get a serious discussion of why the ships are needed, did we? Oh well, space constraints. What about the solution?

This does not mean Britain should not have access to carriers; only that it cannot afford to build and support two new ships, three times the size of its current ones, without doing harm to other capabilities. The answer would have been to share the cost of construction and operation with France, which has just pulled back from expanding its own carrier fleet. Talk of this last month led to silly tabloid headlines about an EU navy. But a shared fleet and a capable military to back it up would do much more for global security than two big British ships and a cash-strapped army – even if it meant that the red ensign had to fly alongside the tricolour.

What does “access” to carriers mean? I hate this “access to” meme – it’s a long standing government way of saying “something other than what you need”. Rather than poverty, unemployment, or a terrible diet, your problem is that you “struggle to access finance, employment, and fresh foods”. I fully expect to hear a government minister explain how they “are taking forward an initiative to improve our counter-terrorist capability’s access to ammunition”.

More seriously, how can we possibly “share the cost of construction and operation” with France when France has just “pulled back from expanding its own carrier fleet”? The French government wants to make some quite impressive cuts in its defence budget, and has decided to put off building a ship, so why would they give us money to work on ours? This “answer” is actually self-refuting.

In fact, the French are likely to get assurances of some sort of the use of the British ships for training when the Charles de Gaulle is in dock, and perhaps also of support if something comes up. Presumably they will offer something in return. This is roughly what Kettle is suggesting, but reversed; but it’s impossible for both Britain and France to do this, just as two people with no money cannot help each other out by lending to each other.

And on top of this, we finish with what sounds like a call to revive the European Defence Community of 1954, which is…different. After all, the Guardian’s policy is not actually to support the creation of a single European state, the last I heard. Nobody actually wants this, and there is no evidence the French do. How it would work, who would command it, who would task it…all this is handwaved away.

Worse, this is a common fault of much discussion of British defence policy. On the Right, the assumption is usually that we don’t need a policy because the Americans will provide. On the Left, it’s usually that we don’t because the Europeans will pay, as if there was a great pool of available funding or forces over there. It makes as much sense as assuming that “the Boche will pay” did in 1919.

Here, it’s driven by Kettle’s addiction to Neither-Nor Criticism. He wants to appear decently anti-militaristic and concerned – this is the Manchester Guardian, after all – but he also doesn’t want to accept the policy consequences of this. After all, he’s a sodding Decent! How can you be a fan of humanitarian intervention and the war in Iraq, but also be opposed to having a blue-water navy? If you don’t think we need a navy, or you think that we don’t need armed forces at all, go ahead and make a case. If you think we do, then please suggest a shape of the forces and a foreign policy that would reliably not need the carriers. But he refuses to go anywhere near either. So, what we get is a sort of tepid soup of unexamined assumptions, with the extra feature that he seems to be desperately underbriefed on the issue.

Alternatively, the reason why he dislikes the carrier project is that it might confer too much independence of the United States. Now, this would indeed be consistently Decent. Some sort of half-baked “access to carriers” would be far more likely to prevent independent British – or European – action, and far more likely to compel a future prime minister to march because some ally wanted it. George Orwell attacked the “shabby kind of pacifism common to countries with strong navies”, in a passage much quoted by the Decents. But how much worse is a shabby kind of militarism that doesn’t want to pay for the Navy?

So what is in the Memorandum of Understanding old Virus Drayson signed with the Pentagon and Lockheed-Martin? As far as I know, he says it guarantees that no USAF personnel would be necessary in the chain of command. This says very little in and of itself. No US personnel are necessary in the chain of command for Trident, nor for any US-made aircraft in foreign service I’ve heard of, though I am open to contradiction in the space provided. It would have been astonishing had the opposite even been suggested.

Of course, it wasn’t the chain of command we were arguing about. It was more the intellectual property rights, and specifically the ability to fiddle with the software ourselves (without necessarily telling LM, or the Pentagon), what we were doing. Secondarily, it was more the commercial terms under which UK IPR embedded in the Unified Control System (specifically the VAACS stuff, without which the F-35s wwe are ordering cannot fly) was supplied that we were worried about.

I have heard and seen nothing bearing on this.

Whilst we’re on the subject of dubious Anglo-American diplomacy, it looks like nothing at all has been done about the F-35 intellectual property question. The HOC Defence committee says, essentially, that the supposed agreement on this is worthless and urgent steps should be taken to prepare a plan B. There is still no word on the fate of the VAACS flight control system developed at Boscombe, which is apparently going to be licensed back to us at vast expense. (There’s a nice article on what VAACS is in Flight International, but nothing on the politricks.)

All together now: You can’t get these people to do a fucking thing/Oh, you can’t get these people to do a fucking thing.

The possible alternatives, you ask? I answer. Option 1 would be simple, if unpalatable. Rather than the JSF, we could order the Dassault Rafale from France, which is the aircraft the French will fly from the carriers we are building together. This would mean changes to the carrier design, as Rafale is a conventional take-off and landing type, but the good news is that this would just mean that all three ships would be identical. This would probably be the lowest-cost and lowest-risk option, as Rafales are already with at least one operational squadron.

It would, however, be very likely to suffer from “Not Invented Here Syndrome” to the Nth degree. French aeroplanes? The (US-encouraged and probably funded) jingo whingeing would be intolerable, as would the reaction at BAE. Never mind that quite a few of the Forces’ major systems are part-French.

The remaining options are a long way back. Navalise the Eurofighter? BAE has done design studies for this, but it would be yet another expensive design change and delay, and would also necessitate changes to the carrier design. However, if the Saudi deal fell through, it might be an attractive option to keep the Warton line running and get rid of one extra platform’s support costs.

There’s also the Saab-BAE Gripen, which is considerably cheaper per aircraft than either Eurofighter, Rafale or F35, and doesn’t involve the French or Germans but does involve BAE, hence politically palatable. Gripen is a lightweight aircraft and might be technically easier to navalise than Eurofighter/Typhoon, and the Saab line is currently going begging as the export sales have not been great. This, though, would be a step off the map and must therefore be discounted. One thing that speaks for it is that going either to Rafale or “Sea Typhoon” (perhaps Neddy as in Seagoon?) would definitively end the RAF and Fleet Air Arm’s ability to operate without prepared bases-since 2000, the Harrier force has operated as a single outfit, JF Harrier, across carriers and land bases in support of the Army and Royal Marines. Like most Saab designs, Gripen can operate off unprepared strips, roads and such, although it isn’t VTOL. Even the monster Viggen, for example, could fly off roads, and the Swedish air force regularly practised this. (The RAF’s Jaguar, now going out of service, had a similar “rough CTOL” capability which was tested on the new M55 motorway outside Blackpool before the road, and the plane, went into service.)

Finally, there is option 4, an entirely new design or a rework of the Harrier so drastic as to be equivalent to a new design. This would delight BAE and lobby precisely because it would be fearsomely expensive, and would entail an entirely new support base – loads o’pork! It’s fair to say that this one is a nonstarter, as much from the time factor as the cost. To avoid the HOCDC nightmare scenario of carriers without aeroplanes, they need to be here by 2012, and to avoid the end of the Harrier CAS capability, by 2010 (as the Harrier’s out-of-service date is the end of 2009). Designing a new combat aircraft in this timeframe is not really an option, certainly not with BAE in charge.

Old “Virus” Grayson really needs to get his finger out. Alternatively, we could give the job to one of these cocktail robots.

Update: Reuters reporting that a Memorandum of Understanding has been signed. Document was last seen crumpled and sailing off into the wild blue from the window of Lockheed Martin CEO’s Cadillac.

You may remember this story from March on how the British-designed VAAC control system for the JSF project was being used by the Americans without any apparent return. Well, Sir Digby Jones, the outgoing director of the CBI, has weighed in.

Link.

“One of the most shocking and worrying aspects of loss of independence has been a refusal to stand up to the United States in so many areas,” he will argue in a speech called “I want my country back”.

Sir Digby will say he is not talking about Iran, Afghanistan or Lebanon, but about areas where “our country could have and should have stood up and fought a protectionist, bullying America – in the fields of trade, investment and the rule of law”.

The former CBI director-general will criticise the government for standing by while the US financial watchdog, the Securities and exchange commission, imposed onerous and expensive disclosure conditions on UK companies, and when the US authorities demanded the extradition of British subjects without sufficient evidence to bring them to trial.

“We stand meekly by whilst America takes our intellectual property in military hardware, uses it and refuses to hand it back..”

He goes on to bash the Americans over airline route access and ownership (a traditional bitch, this – which Labour MP was it who said “We are not fighting the war for Pan-American Airways” back in the 1940s?) before rounding off the evening with some bash directed at the EU. So far so routine on that score. But why am I not pleased? Because he says this in his first speech after leaving the CBI, i.e. exactly when he represents no-one but himself. As usual, most things that matter in British politics are considered off-limits for public discussion.

Well, those of you who are taking part in today’s protest against the Serious and Organised Crime & Police Act, aka the Brian Haw Act, may get to meet…me, as I’m quite likely to come over to the camp at Runnymede from the TYR operations centre in fabulous Egham. Beware.

200 years ago this week, Isambard Kingdom Brunel was born. This week, this blog’s favourite pig-incompetent, corrupt arms manufacturer BAE Systems decided to sell its 20% share of Airbus Industrie, including the Filton plant and design centre just three miles or so from Brunel’s Clifton suspension bridge. BAE is apparently trying to make “bolt-on acquisitions” (read=pissant deals that don’t change anything but do use up capital that could otherwise be squandered on innovation) in the US, perhaps including Level 3…no, not the big internet backbone operator, the firm that makes airport X-ray machines. After all, the US Department of Homeland Security is certain to keep spending at its current clip, right?

The real agenda, though, is pretty clear. Throughout first Dick Evans’ tenure and now Mike Turner’s, BAE has been frantically liquidating everything it designed indigenously. Regional jets? Shut down, just before Canadair and Embraer made a killing out of the RJ boom. Bizjets? Sold to Raytheon, just before they started going like hot cakes. Concorde? Stop. I’m feeling so snarky today I nearly convinced myself it made money! But the principle holds. Get rid of all that stuff so we can sell the firm to Boeing or Lockheed Martin, and then we’ll have monster share options just like Dennis Kozlowski!

Just sack a few more engineers, and we’ll make it to “Giant ice sculpture of Michelangelo’s David pissing vodka” status…