There is a persistent myth that somehow we can get a Blackhawk for £8million, or ‘less than £10 million’ if you listen to Douglas Carswell MP.
Douglas is a Conservative MP with strong free market beliefs and of course there is nothing wrong with that, he argues that defence should be no different to any market and we should simply buy off the shelf from the cheapest supplier, if UK defence manufacturers can’t compete in an open competition they don’t deserve the business.
Given the roughly £27million per airframe cost of the Future Lynx programme it’s hard to argue against the logic. We must note that this is an overall programme cost, not the price of the aircraft and it also includes 2 versions, the naval variant will be more expensive that the Army version.
I have been commenting on Douglas’s blog for some time, I always make a point of reading it because there are often some great posts, except for the ones about gardening that is!
Whenever he posts on the MoD or Defence Industrial Strategy it always seems to come around to £8 million helicopters and despite repeatedly commenting on the basic inaccuracy of this he persists with repeating it.
I would like to think we have a small measure of credibility at Think Defence, we are not connected to the MoD or defence industry so have no axes to grind either way, our interest is to get more people talking about defence issues and no more.
It is one thing to put ones faith in the global free market for paperclips but the means of ones defence, I think, needs slightly different rules.
But promulgating the myth of the £8 million Blackhawk does no one any favours, so Douglas, just for you…
US Products are Always Better
NO THEY ARE NOT
Some are, some aren’t and it has nothing to do with what it costs. Many of our pieces of equipment are way better, many less so.
The Black Hawk is less than £10 million
NO IT IS NOT
Although it is a fine aircraft it is not cheaper, crucially the oft quoted prices simply do not reflect the reality of actual export sales. A helicopter is a very complex piece of equipment that needs a substantial support infrastructure of aircrew, maintenance, safety certification and others. The sticker price is a fraction of the actual cost, the through life cost is something we should always be more concerned with.
Pilots do not grow on trees, REME aviation technicians likewise, flight simulators are not cheap, fuel/consumables is a serious consideration, a new engine is no small undertaking and commonality with other UK equipment already in service like Defensive Aids is not an optional extra.
The utility version of the Black Hawk is is called the UH60M and we often see references to it costing $14million but what is the export price?
As we have said before, its almost impossible to get an accurate figure because of commercial issues and, equipment fit variation and other costs such as training or spares that are sometimes included and sometimes not.
The only thing we can do is look at indicators of other sales.
3 to Mexico, $35.2m or $11.75m each
4 to Egypt, $176m or $44.4m each
60 to Taiwan, $3,100m or $51.7m each
9 to Bahrain, $204m or $22.7m each
The huge difference in price (£8m to £33m) is because of equipment and logistics support, spares, training and documentation etc. Inserting an extra few airframes into an already mature and functioning support infrastructure is vastly different to introducing a new type. US prices also usually do not include so called Government Furnished Equipment, mainly electronic systems, that add significantly to the price.
Equipment fit, do we really want helicopters to be flying around in Afghanistan without the very latest and best equipment?
Some might complain that this is gold plating but the service personnel we ask to fly in them might see things a wee bit differently.
Its a fatuous analogy but the cheapest BMW 3 series costs £22k, the most expensive, with all the gucci extras, is £46k. Instead of a leather steering wheel and heated seats the optional extras on a helicopter include flare dispensers, self sealing fuel tanks, attack warning indicators, night vision compatible cockpit and armoured seats.
We should also factor in the tax revenues and other economic benefits of maintaining sovereign capabilities.
This is not an excuse me for the MoD or UK Defence Industry because at £27 million for Future Lynx is outrageous but merely a look at the complexities of obtaining and operating complex equipment.
The global free market in defence goods is a myth, if we opened up our already liberal in comparison to others defence markets, we would simply expose our manufacturers to other organisations that benefit from protectionist regimes in their home territories. US companies for example, enjoy just as much protectionism as any other, government funded research being a notable area that they benefit from. The same is true for other nations with defence industries, look at a German, French or Russian soldier and what equipment he has, then tell me they operate on an equal footing in an open free and fair market.
There is absolutely no doubt that we need serious acquisition reform, a review of the role of regional/national politics and an clear understanding the actual strategic and monetary value of ‘Buying British’ but reverting to the tired old one dimensional retort of £10m Blackhawks simply demonstrates a lack of understanding and advances the debate not one jot.
Sorry Douglas, but there it is.