FSX: It's a Good Deal For America and Japan

A LANDMARK agreement between Japan and the US to co-develop an advanced jet fighter is in trouble. Critics in Washington have gained support with chilling accusations that the deal is the first step in a Japanese plot to take over the world aerospace market, driving America out of its last high-tech bastion. These techno-nationalists portray themselves as tough warriors exposing clever Japanese negotiators who have outwitted their soft-minded counterparts in the State and Defense Departments. But if the opponents are successful in derailing the deal, it will only serve the interests of those Japanese most intent on building a world-class aerospace industry.

The agreement is the result of a hard-won battle to prevent the Japanese from trying to build the plane alone. The critics threaten to drive the Japanese inexorably back to that position. Already right-wing nationalist Japanese politicians, pointing to the recent events in Washington, are calling for just that.

If the Japanese go for home-grown development, they will gain critical design and manufacturing experience. As US officials repeatedly argued, domestic development would be a waste of defense resources, would sacrifice defense interoperability, and would lose a valuable opportunity for allied cooperation in developing weapons systems.

Under the proposed deal, the FSX will be based on the General Dynamics' F-16, modified and improved with advanced Japanese technology. Mitsubishi Heavy Industries (MHI), Japan's largest defense company, will be the prime contractor, with General Dynamics as the main subcontractor. The Americans will get a 35 to 45 percent share of the work and access to all the technology.

Critics say the Americans are giving away the best of American fighter-plane technology in exchange for too little work and for technology of little value. Rather than helping Japan develop its industry, the US should insist on selling its own planes, they argue.

These charges do not correspond with the facts. Even American manufacturers who bid for the project say the option of buying an existing plane was never realistic. No such plane meets the FSX requirements. To insist otherwise promotes the nonsensical idea that Japan's defense budget is no more than a shopping list to improve the trade imbalance, bearing no relation to meeting Japan's defense needs.

When Japan began serious planning for the FSX program in the mid-1980s, three options were considered: to modify the F-4 Phantom jets in its Air Force; use a new foreign aircraft; or develop and produce the plane totally within Japan. From the beginning, Japanese government and industry clearly preferred domestic development.

In the fall of 1985, the Japan Defense Agency's R&D institute produced a study, with MHI's help, concluding that Japan could produce a world-class fighter for use from the mid-1990s into the next century. Japanese aerospace officials said domestic development was the essential next step for their industry.

Japanese industry had already been building modern aircraft under license from American companies - since the 1950s - including McDonnell Douglas's F-15 Eagle, the most advanced US interceptor. So Japanese executives were eager to take the leap of designing and building an advanced aircraft from scratch. American aerospace industry experts agree that without that experience, the Japanese have no hope of competitiveness.

Throughout the three years of negotiations that followed, the Japanese fought to preserve their goal of domestic development. They aimed countless maneuvers at blocking the options being presented by foreign manufacturers - the European consortium Panavia and two US companies, McDonnell Douglas and General Dynamics, were competing. At one point, for example, the Defense Agency unveiled the aircraft's specifications to the foreign companies and gave them only days to present their design plans.

These twists and turns were met by a surprisingly tough US negotiating team, composed of Pentagon officials who gained through bitter experience an appreciation of the wiles of their counterparts. Initially the Americans pushed the options of license production in Japan of the F-16 or the McDonnell Douglas F-18. Neither aircraft, however, could meet the requirements of the Japan Defense Agency without substantial modification.

Critics suggest that the Japanese rigged those requirements to block the option of buying an off-the-shelf model. There is evidence that in part the requirements were tilted in favor of the domestic option, but it is also true that they properly fitted the defense mission of the plane. The principal role of the plane is to attack ships, key to defense of the vital sea lanes around Japan. That requires a range and missile load that neither aircraft could fulfill.

It was the US side that first suggested the idea of co-development as a compromise to keep Japan from going it alone. The American concept meant that Japan would jointly modify one of the American planes. The Japanese again tried various ploys, this time to redefine co-development as using the Japanese design with some American parts added.

As pressure mounted from Washington, other voices in Japan gain ground - those more concerned with preserving relations with the US than satisfying narrow industrial interests. What finally emerged as the FSX agreement is essentially what the US wanted. Indeed it goes beyond expectations of industry and government negotiators in both work share and technology transfer.

The work share is equal to the license production arrangement for the F-15, for example. The agreement covers only the first phase of the project, producing the prototypes. But American negotiators are confident that they have an understanding to carry the share over into production.

It's possible that Japan will try to grab more work - the US will have to keep the pressure on to ensure its share. It is true that Japanese defense technology is generally inferior to what US companies have. But there are two items that will be used in the FSX which are of interest - an active phased-array radar and wings made from lightweight composite materials.

The radar being developed by Mitsubishi Electric Company is similar to one being developed by Westinghouse and Texas Instruments for the Advanced Tactical Fighter program of the US Air Force. Westinghouse officials said privately that they were eager for access to Japanese production technology for the key electronic part of the radar. Mitsubishi, throughout the talks, resisted sharing its technology but now will have to do so.

As for the wing, critics are correct in saying that American composite-materials technology is equal to or ahead of that of the Japanese. But what American companies want is Japan's production process for creating the larger wing in a single piece. Mastering that craft requires experience, which is why General Dynamics insisted on - and won - the right to build wings of 2 of 6 prototype aircraft.

The FSX will be a modified F-16 with specifications - a much larger (and lighter) wing, stretched-out fuselage, higher-powered engine, more compact and powerful avionics - that also fit the requirements for an advanced F-16X, which is being sought for use by NATO and the Air Force. General Dynamics officials privately admit that the Japanese will, in effect, be paying for R&D for these projects.

If this is nothing more than a giveaway to Japan, then the critics must answer why the Japanese resisted it so strongly. And why American manufacturers, keenly aware of competitive threats, are so pleased. What Japan sought was not American technology but a chance to develop its own.

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