AWACS Decision Deals Blow to British Industry
In a highly charged defense issue, Prime Minister Margaret Thatcher’s government Thursday decided to scrap development of a British airborne early warning defense system and instead spend $1.2 billion to purchase a proven American version.
For the Boeing Co., the U.S. producer of the airborne warning and control system (AWACS) planes, the lucrative British contract effectively eliminates a major competitor and brightens its chances to supply some of the 17 other nations reportedly interested in such a system.
For Britain, it ends a painful nine-year, $1.4-billion effort to produce a viable alternative, known as Nimrod, and rekindles apprehensions about the country’s role as a producer of quality high technology.
‘Sad Decision’
“Very reluctantly, I have decided that the time has now come to cancel the Nimrod program,” Defense Secretary George Younger told a crowded but hushed House of Commons. “Subject to satisfactory completion of contractual negotiations, we shall instead be ordering six E-3A aircraft from Boeing now, with the option of adding a further two within the next six months.
“This is a sad decision to have to take, but I have no doubt that it is the right one,” Younger added.
Younger said he was acting on the advice of technical advisers who concluded that it would take years for the British contractor, General Electric Co., to make Nimrod operational.
To help deflate political arguments that British technology would suffer if Nimrod were scrapped, Boeing had promised significant avionics subcontracts to British electronics companies such as Plessey Co. PLC, Racal PLC and Ferranti Ltd.
Including non-AWACS work, Boeing had also pledged to place contracts in Britain valued at 130% of the total AWACS deal. And a company vice president was quoted as saying that 50,000 jobs would be generated over the contract’s eight-year time span.
Opposition Critical
While such conditions made it easier for Thatcher to defend the selection of Boeing, it did little to silence many critics of the decision.
The opposition Labor Party’s shadow defense secretary, Denzil Davies, immediately charged that the decision was “not only sad but bad.”
“It is a bad decision because ultimately a country can only defend itself on the strength of its own industrial and technological base,” Davies said. “(Younger) has dealt a heavy blow to that industrial base in an area of high technology.
“The government has handed Boeing a worldwide monopoly in early warning systems,” he said.
In addition to sales to the U.S. Air Force, Boeing has sold 18 AWACS aircraft to European members of the Atlantic Alliance and five to Saudi Arabia.
Before Thursday’s decision, General Electric had claimed that 17 other countries, including France and China, had expressed interest in an airborne early warning system and estimated its own export potential from Nimrod at about $3.5 billion.
But failure to win the confidence of its own Ministry of Defense is likely to be the death knell of any Nimrod export potential.
Nimrod Begun in 1977
The Nimrod was first ordered by the Ministry of Defense in 1977 as a cheaper, home-grown alternative to AWACS. The aircraft was to be developed from the old Comet airframe, adapting radar-equipped aircraft previously used as part of Britain’s anti-submarine defense.
But initial cost estimates of $450 million and a five-year development period both proved overly optimistic as technical problems persisted.
Nimrod’s on-board radar malfunctioned, its computer hardware overloaded and the computer software had problems distinguishing targets. Nimrod, the plane that was supposed to track ballistic missiles and distinguish between different types of supersonic combat aircraft, confused coastal road traffic and North Sea oil tankers with airplanes and once reportedly picked up its own on-board stainless steel toilet as an enemy target.
Earlier this year, with Nimrod more than three years late and out of budgetary control, the Ministry of Defense reopened bidding. And earlier this month it became an open secret that Nimrod was doomed.
Last weekend, General Electric Chairman James Prior, who once served in Thatcher’s Cabinet, charged that Royal Air Force evaluations were biased against Nimrod and that the aircraft’s radar now worked most of the time.
4.5% of Defense Budget
He demanded an independent assessment of the two planes, but Thatcher flatly refused.
The cost of AWACS constitutes roughly 4.5% of Britain’s annual defense expenditure, but the size of the contract is only one element in the emotional political debate.
Coming after the controversial sale earlier this year of Westland PLC, Britain’s only producer of military helicopters, to the U.S.-based United Technologies Corp., and an aggressive General Motors bid two months later for a major chunk of the flagging British auto industry, the AWACS decision has added to concerns that the Thatcher government has allowed Britain to become an assembly-line subsidiary to American industry in key areas.
“Britain yet again will cease to be a prime contractor producing systems and will become a subcontractor producing components for the industries and factories of other countries,” Davies charged.
But above all, the decision has been a blow to the image of British technology. British scientists and commentators have been quick to point out that in the early days of radar, Britain was at the cutting edge of the developments in the field.
