F-35 Joint Strike Fighter: next Dubai ports deal?

The Financial Times reports that the new concerns have arisen due to the pending investigation of the purchase of Doncasters, a privately held British aerospace manufacturer, by the UAE-owned Dubai International Capital in a deal worth $1.2 billion.

Although the proposed transaction has not yet drawn much attention in Congress, the first signs of unease emerged on Tuesday when John Barrow, a Democratic lawmaker, released a letter demanding a tour of Doncasters' Georgia facility.

"It is reported that your facility produces turbine engine parts critical to tanks and military aircraft...one must assume [it] plays a necessary and substantial role in the nation's ongoing military efforts in Iraq and Afghanistan," Mr Barrow wrote....

The review comes as officials from Dubai work to ease tensions in Washington after protests forced DP World, also a state-owned company, to agree to divest five US port terminals acquired from the UK's P&O.

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The F-35 Joint Strike Fighter (JSF) project is a $250 billion program, spearheaded by the United States, to develop a next-generation stealth jet fighter. While the bulk of the fighters produced will be bought and used by the various branches of the Pentagon, several US allies are participants in the project with the intent of purchasing jets: Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark, and Norway.

A possible repeat of the Dubai ports debacle is only the latest turbulence in the JSF's development. The program has also led to clashes between longstanding allies US and Britain. The Guardian reports that last week, the British defense procurement minister, Lord Peter Drayson, told the US Senate that Britain would withdraw from the program if the White House and Pentagon did not agree to share technology so that Britain could maintain and adapt its own JSF fleet.

Britain is contributing $2bn to the project and has opted to buy 150 fighters out of the potential 2,600 on order for the US air force, navy and marines. But ministers are annoyed that President George Bush has cancelled plans for a second engine – to be jointly built by Rolls-Royce and GE – alongside one being developed by Pratt & Whitney. The F-35, worth a potential $400bn when export orders are included, would be built by BAE Systems in Britain and other firms, including Finmeccanica, in Italy, Holland, Turkey, Canada, Australia, Denmark and Norway. BAE would get 20% of the work in Britain.

Lord Drayson told the Senate armed services committee: "Without the technology transfer to give us the confidence to deliver an aircraft fit to fight on our terms, we will not be able to buy these aircraft." He is the latest in a string of ministers, including Tony Blair, to demand a quid pro quo from the Americans for the support the UK has given the Bush administration over Iraq, Afghanistan and other military campaigns.

Reuters reports that since last week, Lord Drayson has held " extremely constructive" talks with US officials over the transfer of technology, and that "progress had been made." A US Defense Department official expressed similar optimism, saying that the US had "provided more information on technology issues 'than ever before' to Britain, given its large role in funding development of the new fighter."

The White House's decision to cancel the development and construction of a second JSF engine, a project to have been undertaken jointly by Britain's Rolls-Royce and General Electric of the US, may yet prove a problem. Proponents of the second engine line argue that the competition created by developing two engines would drive down JSF engine costs and result in better engines. However, Reuters reports that in hearings with the Senate Armed Services Committee last week, the Defense Department disagreed.

[US Deputy Secretary of Defense] Gordon England told the hearing the Pentagon had concluded "it would be nice to have a second engine, (but) it is not necessary and not affordable."

Contrary to the argument made by the second engine's backers, the Defence Department had found that having a second engine would never yield savings in the "most realistic scenario," he said.

In addition, he said engine reliability and safety factors had jumped tenfold in the last 30 years. The decision to kill the interchangeable engine was backed at the hearing by the second-ranking leaders of the U.S. Navy, Air Force and Marine Corps, each of which is to get its own F-35 variant....

But Democratic panel member Sen. Edward Kennedy from Massachusetts – which is home to a GE facility that does fighter engine work – said: "We need to consider the long-term effects on the industry and our national security, not just the $1.8 billion that will be saved over the next five years," a point echoed by Susan Collins, Republican of Maine.

Dr. Liam Fox, a member of Parliament and the Conservative Party's shadow secretary of state for defense, weighed in with British concerns over the cancellation of the second engine line in a Washington Times commentary, warning that the decision may undermine US-British ties.

There is already growing concern across the British political spectrum that even after our substantial support in Afghanistan, Iraq and the war on terror, the U.S. has not been more forthcoming in allowing us access to vital technology for a project in which we are a major investor and partner.

Without doubt, cancellation of the program would play into the hands of those in Europe who are even now all too willing to suggest the U.S. cannot be relied on and that Britain should look instead to France and European institutions on defense.

One goal of the Europe-firsters is to use defense procurement to lock Britain into an exclusively European defense force, one in which the U.S. has no role. It's no secret there are many in Europe who see this as an effective way to slowly but surely sunder the special relationship between America and Britain.

Britain is not the only country with concerns over American handling of the distribution of technology and development, reports The New York Times. The US may soon face complaints from other members of the JSF project as well.

Meanwhile, five other nations that are partners in the project ��� Norway, Italy, Turkey, Denmark and the Netherlands ��� met last Friday in the Netherlands to lay the groundwork for a united front to deal with the Pentagon. While much of the complaining seems aimed at better working terms with the United States, the new government in Norway is questioning whether the country should remain in the program....

Norway had planned to invest more than $100 million in the program, but the new left-of-center coalition government is questioning whether the country is getting enough return on its investment....

Another big participant, Italy, has invested more than $1 billion in the program and is seeking more electronic and avionics work, on top of its contracts for fuselage work. Giorgio Zappa, chief operating officer of Finmeccanica, the Italian aerospace company, said that his country's planned purchase of 130 fighter jets could be cut, should additional work not materialize.

In addition to criticism from foreign JSF investors, the project is also receiving criticism domestically. The Associated Press writes that a recent Government Accountability Office (GAO) report cites the Pentagon for investing too heavily in the JSF project before knowing if it will work properly.

GAO says the department is scheduled to spend $49 billion on 424 fighters before full testing on the stealth planes is completed in 2013.

"Starting production before ensuring the design is mature through flight testing significantly increases the risk of costly design changes that will push the program over budget and behind schedule," the report says....

It said a single 12-year commitment has increased development costs by 84 percent, delayed final production by five years and reduced the number of aircraft the department had planned to purchase by 535.

The report recommended that the Defense Department should "adopt more cautious, step-by-step contracts for development work" instead.

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• Feedback appreciated. E-mail Arthur Bright.