Attempts to get manufacturers in the UK, France and Italy to work together to create a common European warship finally hit the rocks this week, with the announcement that the Horizon pan-European frigate project would be dropped. Instead, British Aerospace, through its newly acquired Marconi Electronic Systems, looks set to develop and build the ships for the Royal Navy.
While the project is already five years late, the outcome should be acceptable for the Ministry of Defence. At least it will get its ships. But it is a setback to the Government’s wider ambition of getting more pan-European alliances going for the defence industry.
The project failed in the end because of irreconcilable disputes over workshare, cost and delivery guarantees – in short, cultural differences. It is not just about long lunches or extended summer holidays (though even these were factors in Horizon’s downfall). What British defence contractors have learned over the past twenty years is that survival depends on adopting the kind of business rigour and cost effectiveness that would apply if the end customer was not the defence ministry, but some private enterprise.
On this front, many companies in France and Italy are lagging behind, and are not helped by governments that favour national suppliers and tolerate cost overruns. Naval suppliers, on the whole, have been heavily cosseted – hence the problems over Horizon. The French and Italians were taking up to four and six ships respectively, compared with the UK’s 12. This disparity alone was a stumbling block, and their view of what was a `fair share’ of the jobs and commercial benefits of the project did not match that of the harder-headed UK players.
This is not the end for pan-European defence projects, but it shows there has to be enough in it for all parties to make it worth doing. The Eurofighter aircraft project eventually worked (after lengthy political in-fighting) because all participants saw they could get something out of it.
The biggest failure of the Horizon project is that it has taken five years to face up to the fact that it can’t work.