Cold War Among Allies

Britain’s Prime Minister Margaret Thatcher got a vote of confidence from Parliament on Monday, defusing--at least for now--the political crisis that grew from efforts to rescue a failing British helicopter company. The fate of the company is less clear.

The crisis began last year when Westland PLC, a small defense contractor, decided that it needed fresh capital and new technology to survive. United Technologies Corp. joined Fiat of Italy with a bail-out package under which the Sikorsky division of United Technologies would gain a major stake in Westland.

The offer appealed to both management and employees at Westland and, apparently, to Thatcher. But several defense firms on the Continent, anxious to preserve the policy under which only European-made military helicopters have been purchased since 1978, didn’t relish the prospect of an American firm buying into the European market. British Defense Minister Michael Heseltine sided with the Europeans.

The result was a politically charged bidding war between Sikorsky-Fiat and a five-nation European consortium. Members of the European group threatened to freeze Westland out of intraEuropean helicopter projects if it accepted the Sikorsky bid. The stand was cheered by the Western European Union and the dominant political parties in the European Parliament.

When the issue was put to a vote of Westland stockholders, with demonstrators for both sides marching outside, the Sikorsky bid won 65% approval--impressive, but short of the 75% required by company bylaws. Now Westland says that it has figured out a way in which the deal can be approved by a simple majority. This means that approval could come on Feb. 12. But, where politics is so heavily involved, anything can happen.

Heseltine, whose zeal for joint European defense projects is equaled only by his ambition to become prime minister someday, resigned on Jan. 9 because of what he considered outrageous pressures exerted in behalf of the American bid by Thatcher. Then last week Leon Brittan, minister of trade and industry, resigned because he had leaked a confidential government letter in order to thwart Heseltine’s support for the European bidders for Westland. Thatcher offered regrets on the leak, but defended her own role.

From the U.S. perspective, an important lesson to be drawn is the growing determination of European defense companies to diminish their technological dependence on the United States.

A strong European defense industry is in the long-term American interest because it would give U.S. allies both the ability and the incentive to become more equal partners in the Atlantic Alliance. As a result, we wouldn’t be terribly upset if the Sikorsky bid somehow fell through.

Based on present evidence, we do not take seriously the overtones of anti-Americanism perceived by some British supporters of the Sikorsky bid. But the decibel level of the controversy was a bit disturbing. Disagreements are inevitable as the allies move to develop and manufacture more of the high-technology weapons deployed for the defense of Europe. For the good of the alliance, however, such quarrels should be kept within the bounds of mutual respect and friendship.