LOOKING TO EUROPE FOR ARMS EXPERTISE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000100220001-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: December 14, 2011
• Sequence Number: 1
• Publication Date: July 5, 1985
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2011/12/14: CIA-RDP90-00965R000100220001 9TAT
ARTICLI! APPLRD
ON PAGNA
DEFENSE INC.
Another in an Occasional Series
WASHINGTON POST
5 July 1985
Looking to Europe
For Arms Expertise
By Rick Atkinson and Fred Hiatt
Waslungton Post Staff Wnters
LONDON-When the sun
threatened to set on the British
arms industry more than a dec-
ade ago, the government turned
to a man who knew more about
textiles than tactical missiles.
As one British officer put it,
Derek Rayner was dismissed by
the military as the "ladies' pant-
ies man": he was a shrewd man-
ager of Marks & Spencer de-
partment stores but an ignora-
mus when it came to weapons.
Unperturbed, Rayner cheer-
fully pounced on Britain's arms
makers in 1971 with missionary
zeal. For his gospel, he flou -
ished a commandment from the
prime minister: Shove the gen-
erals aside and drum some busi-
ness sense into Her Majesty's
Government's weapons buying,
at the time deadweighted with
cost overruns and inefficiency.
"I always remember the gen-
eral who said, 'It doesn't matter
what it costs, as long as we get
what we want,' " Rayner (now
Lord Rayner, for his troubles)
recalled with a chuckle. "And I
said, 'Oh, ho, it matters now.' "
As the United States wrestles
with its own cost and quality
gremlins, many would-be re-
formers of U.S. habits are cast-
ing abroad for solutions. It is
becoming conventional wisdom
that, in addition to the kind of
chipper common sense dis-
played by Rayner, the Euro-
peans are worth emulating for
their civilian control of arms
buying, efficient pennypinching
and tight rein on defense con-
tractors.
Congressional experts and
even President Rea an s Grace
commission have endorsed the
idea of an independent arms-
buying agency similar to that
launched by Rayner. flurry of
other studies laud the French
system, dubbed "perhaps e
world's most efficient" a re-
cent Central Intelligence Agen-
cy report. And the U.S. General
Accounting ice has investi-
gators traipsing from Tel Aviv
to Bonn 1- king for more clever
ways to buy arms.
In fact, the Europeans do
some things better than the
United States, but they also do
some things worse. Above all,
they do most things very differ-
ently: As seen from Europe's
defense ministries, the Amer-
ican war machine is clearly one
of a kind.
The native idiosyncracies of
American defense and democ-
racy raise questions about the
extent to which European ideas
could take root in Washington. For
one thing, there is nothing in the
rest of the West remotely ap-
proaching the U.S. military in mag-
nitude. The Pentagon spends more
in an afternoon than Whitehall
spends in a week.
Furthermore, regardless of how
Congress and the Pentagon appear
to coddle 'the U.S. defense industry,
no nation comes close to the Amer-
ican effort at injecting free enter-
prise and competition into the arms
business.
And no other nation subjects its
industry to the kind of relentless
spotlight turned on American con-
tractors by the public, press and
Congress, an inquisition that aston-
ishes the Europeans. "In the States,
you have a much more brutal, much
more violent relationship," saiii1 one
senior French official, contrasting
that to the "convivial" ties between
European defense firms and their
governments.
"I don't think it's as fashionable
to knock the industry here," a Brit-
ish official added. "If the $600 toilet
seat happened in Britain, there
wouldn't be the same to-do. Well, it
wouldn't come to light in the first
place. We're less open."
The Europeans also marvel at
the massive American bureaucra-
cies-in both government and in-
dustry-and the concomitant du-
plication among the military ser-
vices.
"You're really wasting enormous
amounts of money," Sir Raymond
Lygo, chief executive of British
Aerospace, said with a shake of his
head. "It's quite unbelievable."
"I had the worst opinion of our
procurement system while I was in
Germany," added Gerhard M.
Brauer, a West German arms spe-
cialist interviewed in his Washing-
ton office. "Then I came here."
The Tank Olympics
Last month, on the plains of Ber-
gen, West Germany, America's
$2.4 million MI Abrams tank was
finally going to prove itself.
Busloads of U.S. soldiers bar-
reled into Bergen from north and
south, determined to show in a
spectacle of smoke and gunfire that
their Ml was the finest tank in the
West. Even General Dynamics
Corp., M1's maker, sent a pit crew
to the Canadian Cup competition,
the olympics of tank gunnery, to
make sure nothing went wrong.
But something did. After a week
of shooting-and-scooting before in-
ternational judges, a German tank
snared the gold.
The Germans, of course, have
always been skilled tank makers,
and their triumph in Bergen in no
way undercut the M1, which also
scored well. But the story of their
Leopard 2, which the U.S. Army
shunned several years ago as not
quite good enough, says much about
what the Europeans do right.
The M1 was 20 years in the
makng, with its revolutionary en-
gine, fire control and night sights.
The Germans, whose arms industry
began to rise from the ashes of
World War II only in the late 1950s,
Continued
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built their Leopard 1 in five years,
the Leopard 2 in six, and emerged
with a tank as good as, if not better
than, the Abrams.
"We don't have as much money,
and therefore we have to settle for
something less," one British official
said of Western Europe. "Some-
times that's the best thing, because
your [U.S.[ weapons are sometimes
too sophisticated."
Turning bare pockets into a vir-
tue, many ores a ense minis-
tries excel at refining, improvin ,
incrementally a vancins a
study concluded, relatively meager
resources in Israel and uro have
"forced those systems to do the
most with what they have."
Among European arms buyers, it
is the French who usually draw the
most kudos, a tribute to the re-
forms of Charles de Gaulle. In
1961, hearing the familiar refrain of
rising costs, the French president
trampled the objections of his offi-
cers and created an "armaments
directorate," known by its French
initials, DGA.
This fourth branch of military
service, outfitted with special uni-
forms to distinguish its officer in-
genieurs, buys the military's weap-
ons without being a slave to any
army general or navy admiral. With
most ingenieurs educated at the
French equivalent of the Massachu-
setts Institute of Technology, the
DGA is a formidable force in
France, answerable only to the de-
fense minister and savvy enough to
butt heads with the nation's mono-
polistic arms merchants.
"You control monopolies with
smart buyers," Pierre Marais, a re-
tired French general, said in Paris.
"The engineers have training and
qualifications as good as anyone in
the company. They can say, 'I am at
least as competent as you are.' "
By restraining soldiers from ask-
ing too much of a weapon and by
bullying manufacturers into deliv-
ering on their promises, the DGA is
seen as an effective brake on the
kind of "goldplating" that afflicts
many U.S. weapons, which are or-
dered and paid for by the officers
who will use them.
"The army will say, 'This is what
I want,' " Marais continued. "The
DGA will say, 'This is what tech-
nologv can offer you.' But the im-
portant thing is, it's not the indus-
try saying this-it's another branch
of the military."
While France's uniformed buyers
may be one of a kind, the idea of
one centralized weapons-buying
icy is not.
Great Britain, West Germany,
Sweden and Canada have moved to-
ward central and civilian control
over arms purchases.
Only Norway, Turkey and the
United States have resisted the
trend, permitting their armies, na-
vies and air forces to buy their own
equipment, according to a recent
Congressional Research Service
study.
Not everyone in Europe endorses
centralized control. For one thing,
even in Lord Rayner's ministry, the
services retain a prominent role in
purchasing, setting weapons re-
quirements and cultivating informal
contacts with industry.
But the European model has
proved seductive to many critics of
the U.S. system.
"Adopting the French system
would free at least 50,000 people in
the Washington area to look for
honest work, and would greatly im-
prove the procurement process,"
Air Force analyst Thomas S. Amlie
wrote. "However, it would devas-
tate the local economy, particularly
the real estate market, so it's not
about to happen."
Problems of Their Own
In military warehouses, huge
bags of sugar were found congealed
"under the weight of tattered tar-
paulins and the pigeon droppings
that have come through gaping
roofs," according to a newspaper
account.
The culprit was not the U.S. De-
fense Logistics Agency but the Brit-
ish supply system, as described by
The Financial Times. The Euro-
peans, in other words, have trou-
bles, too, many of which give pause
to anyone looking for lessons over-
seas.
The West Germans, for example,
decided not to buy the American
Apache attack helicopter, vowing
instead to build one at home for half
the cost, according to a U.S. mil-
itary officer in Bonn. "Now they find
themselves with a helicopter that
looks like it will cost twice what the
Apache does," the officer added,
"and have half the capability."
The Germans are not alone. The
British opted to build "Nimrod" as a
competitor to Boeing's Airborne
Warning and Control System
(AWACS) planes. Years later, Nim-
rod is millions of pounds over bud-
get and still not airborne.
"One thing can be said right
away," German procurement official
Georg A. Kuenhold acknowledged.
"Cost overruns and complicated
procedures are everywhere."
But from an American vantage
point, there are traits beyond the
occasional overrun that may be less
attractive to those lured by the Eu-
ropean systems.
For example, parliaments in
Western Europe rarely intrude.
They approve or reject proposed
budgets, but lack authority to comb
through proposals line by line, the
kind of sifting that lends clout to
congressional staff members in
Washington.
Sir Frank Cooper, for five years
Britain's permanent undersecretary
of defense, said he appeared before
parliamentary committees about
five times a year. In France, de-
fense officials can refuse to answer
queries from the National Assem-
bly.
By contrast, Lawrence J. Korb,
an assistant U.S. defense secretary,
spent 36 hours testifying at 18
hearings during the first half of
1985.
Nor is the European press much
of a watchdog, despite The Finan-
cial Times' sugar anecdote. Like
parliamentarians, journalists tend to
focus on strategic questions-such
as how much of the defense budget
should go toward nuclear weap-
ons-more than defense manage-
ment.
"The [$6001 ashtray would have
never been in the press," Marais
said. "A French reporter, even if he
knew, wouldn't print it."
That dearth of scrutiny means
less haggling over minutiae but it
also obscures inefficiency and cor-
ruption. Excerpts surfaced in 1976
from a secret French finance min-
istry report alleging overseas
bribes and an "extraordinary waste
of money" in the arms industry; but
c4abAW
40.
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the full report was never released
and public interest quickly ebbed.
"Having no information about
scandals doesn't mean there are no
scandals," a U.S. Embassy official in
Paris said.
In many ways, parliament and
press represent European public
opinion in their attitude of benign
neglect.
"I would think you'd have to hunt
very hard in this country to find
people overworried about the influ-
ence of the defense industry," Sir
Frank said. "It's not like the
States."
One British Aerospace official
recalled the behavior of U.S. offi-
cers at the Farnsborough Air Show,
of 1976, when Washington had
cracked down on generals accepting
entertainment from contractors.
British Aerospace had to indulge
American officers with a box in
front of its hospitality chalet for
"voluntary contributions" and an
improvised receipt system using
coat-check stubs. "We thought it
was the craziest thing we'd ever
seen," the Britisher said.
Furthermore, with fighters wear-
ing $50 million price tags and tac-
tical missiles costing $1 million and
up, no European budget can support
more than one major aircraft, mis-
sile or helicopter firm. Despite the
Pentagon's much-berated tendency
to stifle competition at times, Eu-
ropeans envy the free enterprise
that does exist in the American
arms business.
As the number of prime contrac-
tors dwindles, Eufopean nations
tend to protect their defense indus-
tries as national assets, whether
they are government-owned, as in
France, or partially government-
owned, as in West Germany, or
once government-owned and re-
cently returned to the private sec-
tor, as in Great Britain. "There's no
choice for us," West Germany's
Kuenhold said. "We need these
companies."
So the Europeans aid and subsi-
dize their contractors more freely
than the Pentagon, complicating
cost comparisons. U.S. officials con-
tend, for example, that the true
cost of the European-built Tornado
fighter is $40 to $50 million, as
much as the U.S. Air Force's F15;
Europeans say the price is less.
U.S. officials also contend that
their military technology outshines
Europe's. "The F15 is by far a bet-
ter aircraft than anything the
French could hope to produce," said
a U.S. official in Paris.
The vast difference in scale be-
tween the U.S. effort and any na-
tion but the Soviet Union makes all
comparisons suspect.
"Trying to draw lessons from
armed forces that are the size of
our Coast Guard is more likely to
lead to error than insight," said U.S.
Navy Secretary John F. Lehman Jr.
"We buy, just in the Navy Depart-
ment, five to 10 times as many
kinds of things as any country ex-
cept the Soviet Union."
Or, as Pierre Marais put it with
Gallic flair, comparing the French
system with the American would be
"comparing peanuts and truffles."
Staff researcher James Schwartz
contributed to this report.
DEFENSE SPENDING PER CAPITA
Continue(;
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TOTAL DEFENSE BUDGETS
IN FISCAL 1983; IN 1983 EXCHANGE RATES
-- UNITED
= STATES
$213.63 billion
UNITED
$24.01 billion
KINGDOM
WEST
GERMANY $22.13 billion
$21.65 billion
$0
SOURCE: U.S Department of Defense
55 110 165 220
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