U.S., UK Defense Officials on Joint Strike Fighter Jet

Department of Defense News Briefing
Deputy Secretary of Defense Rudy de Leon
Wednesday, January 17, 2001 - 7:45 a.m. EST

SIGNING OF U.S.-U.K. MEMORANDUM OF UNDERSTANDING ON THE JOINT STRIKE
FIGHTER WITH BARONESS SYMONS OF VERNHAM DEAN, MINISTER OF STATE FOR
DEFENCE PROCUREMENT

DE LEON: Good morning, everyone. Baroness Symons, welcome to you and
the members of your delegation for this most important milestone in
the special relationship that long has existed between our two
nations.

Dr. Jack Gansler, our acquisition czar emeritus. (Laughter) We only
have one position in the U.S. government that comes with the title
czar - our acquisition czar emeritus, who left the department just
last Friday [clarification: Jan. 5, 2001], but also left us, among
many of his other achievements, this milestone in the Joint Strike
Fighter [JSF] program.

In very great measure, this signing is his success, part of his
legacy, and the ceremony would not be complete without his presence.
So Jack, thank you for being here today.

Principal Deputy Under Secretary Dave Oliver; our policy team leader,
Under Secretary Walt Slocombe - Walt, thank you; Principal Deputy
Under Secretary Jim Bodner - Jim; and Acting Assistant Secretary
Sukin representing our State Department colleagues; General Mike
Hough, the JSF program manager and his negotiating team; distinguished
guests, including our leaders from industry; ladies and gentlemen.

Achievement of this great team represents the flexibility and
foresight that will characterize the Joint Strike Fighter. The
aircraft program poised to meet the strategic environment of the
future, the Joint Strike Fighter program, the largest defense
procurement program ever conceived, represents our joint vision of a
mutual security. An environment that will foster coalition engagements
and it represents our joint requirement that the United States, the
United Kingdom and our allies not only be able to fight together, but
work together to develop weapons systems and equipment that are fully
interoperable, more effective than ever before in dominating the field
of battle that will, I think, that will symbolize our partnership, and
that indeed several other coalition partners may soon enter into
agreements today.

This signing represents a further commitment on the part of the United
States to effect a fundamental change in the way we cooperate --
equally important to the future of both the British defense industry
and the American defense industrial base. By improving and enhancing
our export control process, our disclosure process and security
requirements, and by promoting projects like the Joint Strike Fighter,
we will provide significant benefits for the defense industries of
both the United States and the United Kingdom.

Our goal is to maintain a strong transatlantic industrial base,
enhanced interoperability within the NATO alliance, ensure access to
the best American and European technology to meet common requirements,
and greater access to the American and European markets that will help
build economic strength on both sides of the Atlantic.

Easing restraints creates greater sharing of technology, more jobs,
more competition, more innovation, and greater private industry
involvement. The bottom line: we forge relationships that solidify and
strengthen our military and political alliance.

We also realize, however, that increased cooperation in developing
systems such as the JSF increases potential security risk with regard
to military technology. It requires governments and firms to agree to
tighter external controls and to embrace a new security environment.

Both of our nations can benefit by increased cooperation in developing
these systems. But more importantly, our strong alliance will more
effectively ensure our mutual security in a dangerous and
unpredictable world.

The signing today recalls the fervent desire of Winston Churchill that
the United States and the United Kingdom themselves remain united in
their mutual commitment to freedom.

At the dawn of another rapidly changing era, he called us to a
fraternal association, free and voluntary. "I have no doubt," he said,
"it will come to pass as surely as the sun will rise tomorrow."

Today we once again fulfill his optimism for our two nations and find
as constant as the sun our partnerships in the closest of free and
voluntary fraternal associations.

Thank you very much.

Baroness?

SYMONS: Thank you.

May I thank you, Rudy, for your very warm welcome and the support
given to the U.K./U.S. relationship in your opening words, and may I
also add my enthusiastic congratulations to the whole team that has
made this possible. I've come to know some of you over the last 18
months or so, and I must say I've been very impressed by the
extraordinary degree of knowledge and the commitment that the team has
shown - teams from both sides of the Atlantic - in bringing us to
this point today.

If I may say so, it's also extremely nice to see some of my colleagues
from the United Kingdom, United Kingdom industry here today. It's
great to see that, and thank you for coming to support us in doing
this.

Because, of course, the United Kingdom also sees the signature of the
MOU for the engineering manufacturing development phase of the JSF
program as a very important step forward in the relationship between
our two countries.

I'm sure most of you know that the United Kingdom has been working
with the United States on the JSF program as a full collaborative
partner since 1996, and we've said publicly for some time now that the
JSF was a strong contender to meet the United Kingdom's requirement to
replace our Royal Navy and Royal Air Force Harrier aircraft which are
now working together as the joint force Harrier organization.

Our commitment today to the JSF program shows that we continue to
consider the JSF supersonic aircraft with all its stealth technology,
its multi-role capability, as the most cost effective means to meet
our requirements. It will be, we believe, the best aircraft of its
type in the world. And I'm pleased that British industry as well as
the British government are committed to working through our United
States counterparts to fulfill that end.

But of course we recognize that a number of key decisions remain to be
taken about the JSF program. Signature of the MOU today allows the
United Kingdom to take part in the selection of the prime contractor
for the next phase. We also recognize, of course, that the incoming
administration will wish to look at the program in parallel with many
other United States programs, and we look forward to continuing the
constructive dialogue that we have on a broad range of military
issues.

I think history has shown that administrations have changed in both
our countries, and that our relationship has continued to grow. It's
continued to grow in the breadth of our cooperation and in the depth
of our commitment, and nobody knows that better than our armed forces
where, as Rudy de Leon has said, through NATO, the transatlantic
relationship has grown and continues to grow. And I've been hugely
impressed in the way that our armed forces work together not only on
projects such as this, the forward planning projects, but of course as
well at an operational level, and the confidence that they have in
each other.

Participation in the JSF program has been and continues to be a
tremendous opportunity for United Kingdom and United States industry,
and I'm very pleased, as I've said, to see so many representatives
from the United Kingdom, key companies involved here today.

The cooperation between the United Kingdom and U.S. companies is not
only welcome, it is of course in breaking new ground in this
memorandum that we have signed. The U.K. and U.S. governments have
taken steps to ensure that those relationships go on to greater
strengths. Last year as many of you well know, the Secretary of State
for Defence, Jeff Hoon, the Secretary for Defense, Bill Cohen, signed
the Declaration of Principles for defense equipment and industrial
equipment which sets out our view of successful cooperation for joint
programs - a very important commitment that was.

The JSF and the Defense Secretaries have decreed a set of principles
that provide a framework for our involvement in the program in the
longer term, safeguarding the nation's national interests and ensuring
that military and industrial capabilities of the aircraft are properly
managed and are maintained throughout the lifetime of the aircraft.

As I said, we believe, as Mr. de Leon said, that the program is very
good for NATO and our transatlantic ties. I believe that it's also
very good for the European defense capabilities and a number, as many
of you well know, of our European partners have been keeping a very
close eye on our progress in this respect.

But fundamentally, of course, it is wonderful for the capability of
our armed forces.

So the United Kingdom is very pleased, indeed we are delighted to
confirm our strong commitment to the JSF program. We welcome the
closer links that it signifies between the United States and the
United Kingdom industry, and we look forward to working with the new
administration as we have enjoyed our very close working relationships
with this administration, not only on JSF but of course on a number of
programs across the board.

Thank you very much.

STAFF: Ladies and gentlemen, the Baroness and Secretary de Leon do
have a few minutes to take a couple of your questions. Please address
your questions to the topic of the ceremony, the Joint Strike Fighter.

Q: Is the United Kingdom by signing this MOU saying that the Joint
Strike Fighter will be the solution to its search for a future
carrier-borne aircraft?

SYMONS: We are saying that at the moment we think it has the best
potential. We haven't signed a contract, a final contract. It's
obviously the United States with an incoming administration is going
to have to consider its own position on JSF. As you know, there is a
competition in progress as well.

But what we are saying is that we are committing ourselves to the next
crucial phase, the EMD phase, and that we have believed now for some
time that it was a very strong contender. And I think that what we
have done here today is confirm that belief in writing and to say that
we do believe that the potential is there for this being the aircraft
that we will eventually choose.

Q: Baroness, can you flesh out the size and scope of your commitment
in the $2 billion U.S. range, and when actually would you put the
dollars on contract? Is it contingent on a full-scale development
contract being signed in the U.S.?

SYMONS: We are talking here about, I think it's two billion pounds
sterling rather than two billion... It means a little bit more money
than...

VOICE: Two billion dollars.

SYMONS: Two billion dollars. I beg your pardon, I thought it was two
billion bar sterling [sic], it's always a confusing moment.

But of that, 1.3 billion is - I'm looking now because... Where are my
people? Steven, tell me if I'm getting this completely right, but as
far as I know we're talking about 1.36 billion to the program and
another 600 million in terms of the sort of modifications we'd have to
make in the United Kingdom. So I think that 1.3 equals your two
billion dollars, and the extra 600 million which is... So I was right
in talking about the total commitment that we are putting in, for us
it is two billion pounds. But the commitment to the joint program is
1.3 billion pounds, i.e. two billion dollars.

Is that clear?

Q: No.

(Laughter)

SYMONS: Okay, let me do this again.

We've got two lots of two billion here. The one you're interested in
are the two billion dollars to the joint program. In addition, we in
the United Kingdom have to produce more money because we are looking
at ways in which, because we're talking about our aircraft carriers
and modifications that might have to be made. So we actually in terms
of our own commitments from our own treasury, need another 600 million
pounds, which goes back to my two billion pounds in total, in terms of
the commitment from the United Kingdom treasury.

So it's 1.3 billion pounds, it's two billion dollars. But taken all
together for us, it's two billion pounds.

I have really got that right, this time. It's a great deal of money.

Q: Which is...

(Laughter)

SYMONS: Of course it's not nearly as much money as if we do in the end
go ahead with the entire projects, which taking us up to the year 2040
will mean that in current prices we'll be talking nearer ten billion
pounds sterling overall.

So the United Kingdom does I think have to have a good deal of
confidence, a good deal of commitment to have committed ourselves in
this way. Now you say, well when do you actually start spending it?
Well, of course to some extent we've been involved already. We've been
involved, as we said, since 1996, so a certain amount of money's been
spent already. But the actual money starts to get spent in a serious
way from about autumn of this year.

Q: Thank you.

Q: How exactly will you take part in the choice of the prime
contractor? What weight will Britain's say have in the decision?

SYMONS: Well, I think that may be one for Mr. de Leon. (Laughter) We
would like to think a very great deal indeed, but of course we are
full collaborative partners, but of course the lion's share of the
budget lies with the United States, although I think the United States
is being very fair to us in the way that we've conducted business so
far. But Rudy, perhaps...

DE LEON: I have no doubt that the source selection board will, as a
precept, find a way to have appropriate linkage with - we're going to
[be] doing it between the Air Force, Marine Corps and Navy to boot. So
our collaboration with our allies I think will be easy compared to the
more complicated collaboration in the Pentagon.

(Laughter)

Q: Will there - do you have in mind some kind of a proportional say,
proportional to the amount of Britain's investment in the program as a
part of the whole?

DE LEON: I wouldn't say that it will be a formulaic approach where it
will be percentages. I think we'll find a way to make sure that input
is secured and that the data in terms of the source selection
authorities, that the data flows into the source selection authorities
in terms of the interests of all of our parties.

Q: What is the correct portion, then, of Britain's investment in terms
of the whole? Compared with the U.S. investment?

DE LEON: We'll run some numbers and give you that for the record. This
is our largest procurement. I think we're looking at the...

Q: Do you think about eight percent?

DE LEON: Is that FSD [Full Scale Development] or EMD?

Q: EMD.

Q: One last thing...

DE LEON: But just on that, eight percent at the EMD period. As this
program unfolds, depending upon the number of aircraft to be procured,
the rate of participation among the United Kingdom and other allies
who may choose to be participants in the program may obviously be
considerably larger.

Q: Okay, fine.

The other thing was, we noticed that one of the MOU findings that you
signed was marked secret. Is there a secret annex to your agreement
then? What did that cover?

(Laughter)

SYMONS: It will cover - I'm sorry we don't know each other because I
can see that if we did we would have an awful lot to talk about.
(Laughter) But it will cover the sort of security issues that you guys
always want us to talk about and that we don't talk about. Okay?

Q: It's a long time between now and when the airplane goes into
service. In the contract which you'll sign with the U.S. government on
EMD, will there be any provision in there for the U.K. to get its
money back in the event that sometime between now and 2008, 2010 this
program is scrapped or doesn't come to fruition?

And secondly, the 600 million pounds you're talking about spending
over and above EMD, could you elaborate on what that's being spent on,
please?

SYMONS: Well, let's deal with the first one. It's not recoverable
costs, but there are clauses that cover either side which would wish
to back away from what we've been doing. That's pretty standard. It
isn't that one would say please give us all our money back, but there
would be provision for covering the position of a party that wished to
continue with the program in those circumstances. We can give you, I
think we're publishing the details so we'll be able to show you the
exact way in which that is covered.

I'm sorry. Your second point was?

Q: You talked about the 600 million pounds being spent over and above
what's being spent in the EMD phase, and that money's being spent in
the U.K. I --

SYMONS: That would be to cover - there are sorts of ways in which we
will want to integrate the JSF into the United Kingdom's armed forces.
It's not just a question, is it, of buying a new capability. There's a
question of then integrating the way in which it will operate. That is
the sort of contingency money that would be necessary and for us to
budget for, saying answering the question that your colleague asked
earlier.

What I was trying to indicate was the scale of the commitment that we
are entering into, and that is money that we have also had to say to
the treasury that we believe that we will need in the Ministry of
Defence in order to do this properly, and it's to cover those sorts of
exigencies.

DE LEON: Let me just add, this program as a measure, one only need to
go to Edwards Air Force Base to see the reality of the Joint Strike
Fighter program today. There are three hangars, three contiguous
hangars, and in there you'll find the heart of aviation modernization
for the future. Because the F-22 is in one undergoing its flight
testing. Then the Lockheed and Boeing teams in their respective
hangars working vigorously on the aircraft, moving toward the DemEval
[demonstration and evaluation] phase and a vigorous flying of the
prototypes.

So there is hardware on the ramp, and I think that is real, that is
measurable, and I think it reflects the commitment that this
administration, Secretary Cohen in particular, having a viable program
to turn over to a successor, but it's something that you can measure
out there on the ramp at Edwards Air Force Base.

Q: Why did you feel that it was necessary to make this commitment now?
Why not wait until after the new administration makes its review of
the programs of the Pentagon? Wouldn't that have made more sense?

SYMONS: The reason was that the down-selection starts next month, and
I think it's perfectly reasonable, the United States government was
very clear, that if we were to take part in that down-selection they
wanted us to commit in the way that we have today. And we understood
that and we've been very happy to do it. So that's the reason for
doing it.

Q: Secretary de Leon, one final on the joint, on the flyer itself.
There's been a cottage industry of speculation in Washington here that
once the Clinton administration leaves town, the Air Force and the
Navy will try to cut this program out of their respective budgets and
kill it.

As you leave office can you give us a reality check on the strength
that you see various services have had to the program? Will that
support last when you leave here?

DE LEON: I think, one, the administration is leaving a vigorous Joint
Strike Fighter program to its successor. They have every right to
examine this program and every other element of the Department of
Defense budget.

But the critical point is that for our Air Force and Navy and Marine
Corps to continue the air superiority that we have enjoyed, they are
going to have to field a new aircraft. We are really in the binds of a
dilemma - either moving forward with vigorous modernization of which
the JSF has the greatest promise to be the affordable fighter of the
future to supplement the F-22 in particular, that we move forward on
that. Otherwise we will need to continue to put more dollars into O&M
to keep our existing inventory of aircraft up and flying.

The critical piece is the Joint Strike Fighter, allows us to modernize
the force structure.

The F-22 gives us a unique capability at the high end. It will
dominate the skies. But what the Joint Strike Fighter promises is the
ability to modernize our entire force structure, which I think is
critical to the projection of U.S. power around the world. So I
think...

Q: What about just buying more F-16s...

DE LEON: I'm not finished.

Q: Okay.

DE LEON: So I think we're leaving our successor a healthy program. I
think they will have a range of options. But indeed, the critical
issue is to modernize your warfighting force structure in terms of
tactical aviation.

Now hypothetically you could buy upgraded variants of existing
aircraft and that may give you some utility in the short term, and
even in a longer term, but the JSF is really an investment to continue
to what we have taken for granted, which is the ability that we will
be able to dominate the sky under all scenarios against upgraded air
defenses for the future.

It's got to be affordable, it's got to be maintainable, and it's got
to be effective. I think that's why the program that is at Edwards Air
Force Base right now, it will involve some very vigorous testing.

But I think we have two excellent prototypes out there flying. We are
all going to be tracking with interest the demonstration of the
aircraft in all three variants. But I think we leave the next
administration a vigorous Joint Strike Fighter program and we are on
the path to the modernization of our tactical aircraft that is going
to be critical if we are going to continue to have the air superiority
that we have taken for granted these last decades.

Thank you.

SYMONS: Thank you very much.