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Europe, U.S. approaching Japan for fighter development

  • March 22, 2019
  • , Asahi , p. 4
  • JMH Translation

By Tsuneo Sasai

 

In November 2018, the U.K. Embassy in Tokyo invited officials from 11 major Japanese companies tasked with developing Japan’s fighter jet models. Among them were those from Mitsubishi Heavy Industries and Kawasaki Heavy Industries. At the embassy, senior executives from four leading European defense equipment manufacturers, which form the backbone of Europe’s defense industry, were waiting for the Japanese officials. 

 

The Japanese and British governments organized the event for those gathering there to introduce each other, but it was in fact a venue for the European firms to pitch their fighter jet development knowhow and other technologies.

 

Andy Latham, a senior vice president of BAE Systems, briefed the Japanese audience there on Britain’s plan to develop a next-generation fighter model, which is a state-of-the-art fighter designed to fly in sync with unmanned aircraft with artificial intelligence. The screen showed cutting-edge functions that the firm is looking to develop, featuring a pilot with wearable devices and other technologies like in science fiction movies. He proposed allying with Japanese firms. “We want to pursue joint development with Japan and use that knowhow to develop our countries’ next-generation fighter jets,” he said.

 

The U.K. side is looking to participate in the development of a next-generation fighter jet, which the Japanese government aims to introduce in the 2030s. If that is materialized, it will be able to access the project worth trillions of yen. As this is going to present a huge business opportunity, other international players are also approaching Japan.

 

Lockheed Martin and Boeing, the world’s No. 1 and 2 defense gear makers, respectively, presented their proposals for the development of next-generation fighter jets to the Ministry of Defense last year. Their plans featured upgrading the U.S. military’s mainstay fighter jets for Japan.

 

European and U.S. defense hardware makers once took a direct hit from reductions in their governments’ defense spending following the end of the Cold War and financial crises in the late 2000s. They have since shifted their focus to Japan and other countries to broaden their market reach beyond their countries.

 

Of late, U.S. President Donald Trump, the proponent of a “buy American” policy, has been also making a top sales pitch. At his meeting with Prime Minister Shinzo Abe, he called on Japan for the procurement of U.S. military hardware. “The U.S. government identifies the export of military equipment as a key component of its national security strategy and is accelerating a market push together with the U.S. military,” said a Japanese government official.

 

This sales approach is producing clear results. Japan’s imports of defense equipment accounted for 7.4% of the total defense budget for fiscal 2011, but the percentage is projected to jump to 27.6% in fiscal 2019. Japan’s procurements from the alliance partner via a foreign military sales (FMS) program surged over 16-fold during this period.

 

Japanese firms are growing nervous about their foreign rivals. Even Mitsubishi Heavy Industries, which has a solid track record in Japan’s development of fighter jets, including the “Zero” Fighter, is no exception.

 

“The situation facing the domestic industry is severe,” said Naohiko Abe, senior vice president in charge of the firm’s military hardware development, at the company’s strategy presentation meeting held in June last year. “If the government’s procurements via FMS increase beyond expectations, suppliers will be forced to close shop.”

 

Japanese defense contractors want to take the lead in Japan’s development of a next-generation fighter jet, but their rivals are European and U.S. companies. These rivals generate sales of about two to four trillion yen from defense equipment operations annually on average whereas Japanese firms generate up to some hundreds of billions of yen. They have an overwhelming edge in funding and can allocate more money to the development.

 

Against the backdrop of the hardship Japan’s defense sector is currently experiencing, the MOD once adopted a “convoy” system to have multiple domestic contractors develop equipment on Japan’s own, 

 

This system consequently made Japan’s domestic development costly. “Who will take the responsibility for this diversion of investment? The approach proves no effective at all.” With this, Yojiro Uchino, director-general of the budget bureau at the Ministry of Finance, voiced his dissatisfaction at a MOF council meeting held in April 2018.

 

In the Japanese defense equipment sector, Mitsubishi Heavy Industries has traditionally been tasked with manufacturing fighter planes whereas Kawasaki Heavy Industries has manufactured transport aircraft. With production equipment facilities and technology knowhow diversified, the price of Japan’s C-2 transport aircraft, which is domestically produced by Kawasaki Heavy and other suppliers, is twice as high as the F-35 aircraft, the U.S.’ advanced fighter jet model.

 

With Japan’s defense industry struggling to find a way out, senior executives of ten defense equipment makers in Japan met in Tokyo on Feb. 22. (Slightly abridged)

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