Alphen,
Netherlands. 21 September. Sixty-eight years ago just up the road from
here the British 1st Airborne Division was fighting to the death at
Arnhem Bridge – A Bridge Too Far. Four
days before British paratroopers had been dropped behind German lines to
capture the bridge over the Rhine which would have opened the door to Germany. Brilliantly conceived it was an operation that
was tragically beyond the capability of the forces asked to carry it out and
reflective more of Allied politics than sound strategy. Much the same can be said of the proposed takeover
of British defence contractor BAE Systems by the Franco-German giant EADS – flawed
strategy at far too high a price.
Since last week’s blog I
have been digging and it is becoming ever clearer that the British Government
is up to its neck in this decision. Sadly,
it is a decision that reveals yet again the complete inability of London to
understand let alone craft sound strategy.
London simply does not understand that this takeover will leave the
British having to reconcile a defence–strategy embedded in the American-led
Anglosphere with a defence-industrial strategy firmly embedded in the coming
Eurosphere. It is at best
irresponsibility and at worst strategic negligence that will see Britain and
its armed forces paying far too high a price.
Yes, the British
defence budget is clearly too small these days to support BAE Systems. However, why hitch BAE Systems to a European
defence market that has fallen some 30% since 2008 and is still falling. If BAE Systems is looking for increased volumes
it should project partner an Asian company where there is double-digit year-on-year
defence investment growth. Or, if it is
seeking to be a technology leader it should tie-up with one of the big American
contractors as the US is determined maintain its defence-technology lead. All the British will get from this deal are
low volumes and questionable technology at high cost. All the proposed new company’s shareholders
will get are low returns on investment if any at all.
EADS wants BAE Systems
because of its reasonably successful American business, but even this strategy is flawed. The US business exists partly
because BAE Systems is seen as a British company. The moment BAE Systems becomes EADS (in
whatever guise the new company adopts) then Washington will downgrade the
company’s access to sensitive US defence contracts and technology.
Furthermore, the impact
on British technology, industry and of course jobs will be profound to say the
least. This Franco-German dominated giant would close down any British
facilities which compete with French and German production, no doubt after
assurances to the contrary. In future
Britain’s warships, nuclear submarines and warplanes will be
designed and built in France, with some metal-bashing sub-assembly plants left
in Britain for the sake of political politesse. This is not a rebalancing of Britain’s defence
economy this is the eradication of it.
Having
been taken over the board members of both BAE Systems and EADS would make a lot
of money, which is clearly helping to drive this deal. BAE Systems has long got used to hidden subsidies
and gross over-payment at the British taxpayer's expense and may see a takeover
by EADS as an opportunity to get a kind of European ‘bail out’.
Sadly, this whole deal reveals
yet again the two contending diseases at the heart of government in Britain – short-termism
and the enemy within. There is the sheer
strategic incompetence of a government that simply does not understand the
difference between value and cost and which now subjects everything (even the
defence of the realm) to its endemic short-termism in an increasingly desperate
effort to get re-elected. Second, too many
senior civil servants and their political fellow-travellers no longer believe that
Britain should have a national interest. Rather these soft
power warriors seek an end to a strong British military because it leads to too
many foreign adventures and gets in the way of their 'successful'(not) management of
Britain’s decline.
This is by and large the same Whitehall group that wants to ‘integrate’ Britain into Europe at almost any price – the surrender
lobby. Last Monday the so-called Future
of Europe group of foreign ministers met and called not only for an integrated
European foreign policy, but also a European Army, supported by an integrated
European defence industry. Coincidence?
It is time the sovereign power in the land, Parliament,
got a grip. The BAE Systems takeover
must be stopped. Parliament must examine
properly the defence-procurement fiasco that has led to this desperate,
defence-destroying move, the murky motives and individuals behind it and
once and for all hold to proper account an increasingly apathetic British Government.
What hope the 2015 Strategic Defence and
Security Review?
BAE Systems; a deal too far.
Julian Lindley-French
