Picking over the bones of the UK government’s recent bickering with Boeing, Sir Chris Coville, chair of the British Helicopter Association, makes one thing very clear: the issuing of threats to potentially end helicopter defence contracts are not in the least credible.
He’s unmoved and less than convinced the episode will have any lasting impact on current business arrangements between the two parties.
‘I think you should only issue a threat if you’re prepared to carry it out and in this case, neither side can honestly say they’re prepared to cut business ties with the other,’ he said.
To recap, relations between the opposing sides began to sour following the US Department of Commerce’s decision to place a preliminary 219% trade tariff on Bombardier.
That decision, as Shephard reported, centered on Bombardier’s 2016 deal with Delta Air Lines, as Boeing’s complaint alleged such a deal was improper and made possible by virtue of Canadian government subsidies.
Since the original ruling, the UK government has criticised Boeing for its role in the affair, holding the company accountable for instigating proceedings in order to push construction costs of C-series aircraft to $61 million per aircraft, a figure three times higher than Delta received them for.
Adding to the UK government’s opposition is the fact that 1,000 jobs at Bombardier’s Belfast base would be jeopardised in the event that the tariff was imposed long-term.
Only last year the UK completed a $2.9 billion deal for the manufacturer to deliver 50 Boeing AH-64E Apache attack helicopters to bolster UK defence capabilities.
Beyond the ramifications of any future problems between Boeing and the UK government, however, Coville is insistent that the more immediate concern for the BHA is overcoming a distinct lack of research and development domestically.
‘We must sustain a design and development capability of combat aircraft,’ he explains.
‘One of the problems we are currently having after following the [Lockheed Martin] F-35B route is that although we are going to build 15% of the global requirement, we are doing it the same way French and Japanese cars are made in the UK. In other words, the parts arrive and we put them together.’
He sees an inherent problem to working this way – falling victim to market forces.
The assembly of parts can be carried out anywhere and once another plant lowers its prices, there’s very little to stop contractors moving their business to a new base.
‘Think of it like building cars in Detroit. Once it becomes too expensive to do so you move production to Mexico City,’ Coville says.
‘When that becomes too expensive you move again to Caracas and gradually – as happened in Detroit – you’re eventually at the bottom of the pile and out of business.’
The logic seems watertight. Leave yourself without the capacity to design products independently and sooner rather than later, you’ll be left treading water.
It’s for this reason as well as developing sustainable revenue streams that he wants to establish a meaningful dialogue with France and Germany, who he sees as the leaders in European attack aircraft platforms.
Even within the context of Brexit – the UK’s pending withdrawal from the EU – he envisions a venture where the UK can ally with France and Germany to create a collaboration of mutual benefit.
‘I don’t see why a working partnership couldn’t be successful post-Brexit. Mainly because we have gone down the F-35 route, the French have turned to Germany and together they will probably be developing some kind of first-class platform in the future,’ he explains.
‘I see no reason why the UK shouldn’t be part of that. The ability to make things with partners is essential – ideally with European partners – otherwise, you are overwhelmed by the United States and making sure those capabilities have an attraction to the export market.’
Cynics will assume such an approach to be a precocious one – as political and economic links between the UK and the rest of Europe remain frosty at best – but the astute judgment of the BHA in determining that conventional and current strategies are not always having desired outcomes, clearly shows they are attempting to reshape the defence helicopter agenda through creativity and guile.