A political charm offensive is taking place at full speed in Helsinki with lobbyists and consultants teeming around in the wings as Finland faces its most costly procurement ever: updating the jet fighter fleet.
During the depths of the 1992 recession, Finnish Prime Minister Esko Aho’s right-wing government decided to buy 64 American F/A-18 Hornets for FIM 18 billion. Taxpayers grumbled, but that was a price the government was prepared to pay in order to send a clear political signal to the outside world, especially to our neighbour in the East.
Now, the jet fighters have nearly outlived their technical lifespan. The estimated price tag for replacing the Hornet is €7–10 billion, plus an even larger sum for maintenance and service. After all, these aircraft will secure Finland’s defence capabilities for approximately the next 30 years.
If one is to believe an anonymous source quoted this week by Finland’s major business daily Kauppalehti, the government is leaning toward Swedish Saab Gripen. Nordic co-operation and a lower price tag than the competition can certainly play to Saab’s advantage when politicians (the current left-leaning government) are due to make a decision in 2021.
American Boeing F/A-18, European Eurofighter, French Dassault Rafale and American Lockheed Martin F-35 are all participating in the competitive bidding.
In June, the Gripen E-type jet fighter experienced a setback in Switzerland, where Saab hoped to sell up to 40 jets, and the chances of winning a Swiss order were reduced.
The defence industry is only partly about technology and money. Politicians in all countries naturally keep an eye out for defence solutions in neighbouring countries and consider defence systems that work well together. But like all other marketing, one should never underestimate abstract image issues, such as emotions and visions.
Within the defence sector, one usually speaks of holistic, or “total” solutions for each individual country. There is so much more at stake than individual products, in this case fighter types, or percentage points and billions for that matter. In order to win an order, it is by no means enough to offer a technically superior product at a reasonable price, since political dimensions matter. After all, politicians must satisfy the end users (the defence sector) and the buyers (the taxpayers) at the same time. Also, add domestic and foreign policy dimensions, shake or stir, and the cocktail is ready.
We should remember that in 2016, the Finnish government sold 49.9% of the defence group Patria to Norwegian Kongsberg Defense & Aerospace for €283.5 million. The Norwegians were already familiar through a jointly owned manufacturer of ammunition, rocket engines and space applications called Nammo (Nordic Ammunition Company).
It is also worth remembering that Norway ordered 52 Lockheed Martin F-35 jet fighters for €7.6 billion, plus estimated lifetime costs of €28.6 billion spread over some 30 years.
If Finland (theoretically) buys the same jet fighter at the same price, the cost will be at €9.35 billion, while lifetime expenses can easily exceed €35 billion. Would not it be justified for Patria and Kongsberg to focus maintenance work onto one single make of aircraft?
For this very reason, so-called synergy effects form a central part of the marketing message of all five companies who take part in the bidding. And even though defence procurements have a tendency to run over budget, politicians can always declare in retrospect that it is important to buy peace at all costs. Finally, one should note that the experts within the Armed Forces are preparing the procurement recommendations, and it would indeed be a radical move if the politicians – who make the final decision – go against those specialist verdicts.
This article by Torsten Fagerholm was originally published in Swedish by Hufvudstadsbladet (HBL), Finland’s leading Swedish-language newspaper, and can be found here at their website: https://www.hbl.fi/artikel/skonhetstavling-kring-jaktplan-imagen-kan-avgora/
Photos: Wikipedia Commons