Lessons for Industrial Resilience: The UK's Typhoon Export Conundrum

commentary

Feb 2, 2024

Typhoons at RAF Coningsby in Linconshire, United Kingdom, December 9, 2022, photo by Joe Giddens/Pool via Reuters

Typhoons at RAF Coningsby in Linconshire, United Kingdom, December 9, 2022

Photo by Joe Giddens/Pool via Reuters

The U.S. State Department's decision last week to conditionally approve sale of F-16 aircraft and upgrade kits to Turkey may have turned heads in boardrooms across Europe. At first impressions, it may have appeared as a prompt retort to Turkey's long-awaited ratification of Sweden's NATO membership. Could it have been a reasonable and measured diplomatic gesture, balanced in part by the simultaneous notification to Congress of the intended sale of 40 F-35A fifth-generation fighter aircraft to Greece? A story of military equipment acquisition as part of a delicate diplomatic balancing in the Mediterranean.

On closer inspection, however, the story might be cause for more introspection in Lancashire and Munich than in Ankara or Athens. Whilst a congressional veto on the sale remains a possibility, the U.S. decision to move so publicly appears at face value to close the open window that had prompted Turkey to actively consider the Eurofighter Typhoon. Turkey touted the Typhoon as a viable and attractive alternative during the restriction on the sale of F-16 upgrades, which they may yet still decide to proceed with, particularly given Greece's planned F-35A acquisition. The case for Typhoon in Turkey, though, is almost certainly less clear than it was a week ago.

If Turkey does step back from its pursuit of Typhoon, it would join India, South Korea, Finland, the UAE, and Switzerland on the list of countries to decline acquisition of the four-nation collaborative platform jointly exported by the United Kingdom, Germany, Italy, and Spain. The development of the Typhoon was the result of a complex workshare collaboration which sees industrial and economic benefit apportioned roughly in line with order commitments when the platform was first developed. The United Kingdom with its 33 percent share and Germany with 33 percent have the most to gain, or lose, from Typhoon's success.

For some, the United Kingdom included, the continued commercial success of Typhoon is a driving factor in the maintenance of a capable defence industrial base.

Share on Twitter

The experience with Typhoon—with its strong, but varying, interlinkages with defence industrial policy in its home markets—speaks to some of the defining challenges in industrial capability sustainment in a rapidly shifting defence market. For some, the United Kingdom included, the continued commercial success of Typhoon is a driving factor in the maintenance of a capable defence industrial base.

BAE Systems, in its role as the United Kingdom's national integrator for Typhoon, benefits most visibly when Typhoon secures success in export markets. At the same time, a typical sale also brings engines, RADAR, electronics, and potentially weapons, that could benefit many of the United Kingdom's major defence players including Rolls-Royce, Leonardo, and MBDA.

As recently as last year, prospects for Typhoon in export markets looked to be buoyant after the aforementioned run of disappointing commercial setbacks. Turkey appeared to be making public overtures of genuine interest in the platform and Saudi Arabia, the United Kingdom's defence export partner of choice, was preparing to replace its ageing Tornado fleet. Suggestions in the market were that Typhoon could soon look to benefit from as many as 100 or more replacement aircraft orders, not to mention the ongoing sustainment revenue that follows their use in the aftermarket. Defence exports can be notoriously fickle given their intrinsic links to shifting foreign policy priorities; in the long-term development and sustainment of an industrial base they can be a challenging policy tool to rely upon.

Last week's news that the United States now supports sale of new and upgraded F-16s to Turkey, then, will likely strike a chord of disappointment across the Eurofighter institutions and to varying degrees in national capitals. A varied approach to export control and a notoriously complex institutional framework, not to mention shifting degrees of importance placed on Typhoon's success in the export market across its core partner nations, adds an extra degree of difficulty to its prospects of success in the already competitive export market. Paired with media suggestions that Saudi Arabia may look to split its Tornado replacement aircraft order between the United Kingdom and France, Typhoon's order pipeline has gone in short order from rude health to in question. Whilst Germany recently shifted its longstanding objections to Saudi acquisition of additional Typhoon (it is already a significant operator), Riyadh will have taken note of the German reluctance to export and may be looking to reduce the risk of future constraints on spare parts.

The United Kingdom may look to consider the critical role that exportability has to play in sustaining capability and skills in its next-generation platforms.

Share on Twitter

In short, whilst the United Kingdom stands to gain industrial benefit from Typhoon's commercial success, it does not hold the levers of influence on a potential sale in a vacuum, given its partnered nature. For the United Kingdom this is likely to be particularly problematic. Whilst the United Kingdom's Tempest and Future Combat Air System (FCAS) partnerships are already up and running, laying the ground for next-generation platforms and technologies and giving commercial surety to key players in the industrial base, this 'priming of the pump' focuses on engineers in the development phase of the product lifecycle. Potentially as critical will be the United Kingdom's ability to similarly generate a demand signal which appropriately sustains skilled roles in the defence manufacturing sector, bridging the gap until FCAS technologies reach the production phase—likely 2030 onwards.

Strategically, then, the United Kingdom may look to consider the critical role that exportability has to play in sustaining capability and skills in its next-generation platforms; and the extent to which partnering in defence acquisition, whilst logical, presents inevitable challenges when foreign policy priorities are overlayed. Perhaps the decision points are closer than they might appear, whilst the United Kingdom still holds the relevant levers to influence design and industrial integration and can still define guiding principles and rules of the game with partners for export engagement upfront. Typhoon's challenges in the export market and their impacts at home might prove instructive for the next generation.


Stuart Dee is a research leader in defence and security at RAND Europe.