Chapter 23

Transatlantic Defense Industrial Cooperation:
Can It Occur?

Ralph D. Crosby, Jr.
Northrop Grumman

One cannot overstate the enormity of change that has affected and will continue to affect NATO and the transatlantic alliance. As contributors to the international security system, we in the industry appreciate the opportunity to participate and contribute to the intellectual framework that must address this complex, uncharted change and with the rapidly evolving security environment. Thank you for acknowledging our role by creating this panel.

There are a number of key questions we must ask as we look at the issue of transatlantic defense-industrial cooperation. These include:

1. Should transatlantic cooperation occur?

2. Why isn’t it occurring—or, at least, why is it being significantly hindered?

3. What must be done to enable transatlantic cooperation to occur?

4. What is industry’s role, particularly since the industry has become greatly consolidated?

Let us look at these questions one at a time.

SHOULD EFFECTIVE TRANSATLANTIC DEFENSE-INDUSTRIAL COOPERATION OCCUR AND, IF SO, WHY?

The easy answer to that question is yes. Such cooperation is critical in the current security environment for a number of reasons:

• First, it is affordable. Given our scarce resources, it is the only path to a broader market and larger production runs.
• Second, it requires fewer investment dollars and can prevent redundancy. It will also reduce the likelihood of disputes over investment equity.
• Third, we must close the capability gap.
• Fourth, it will enable technology transfer, particularly co-development.
• Fifth, it will aid interoperability, the problems of which were clearly displayed in the Kosovo operations. Information-based warfare and systems demand transparency, and we simply cannot function without procedure and equipment commonality.
• Sixth, transatlantic cooperation can enable ESDI. It can also contribute greatly to surveillance, C3, and lift. But cooperation is more than a technical term—the challenges are almost staggering. We need to do whatever we can to promote transatlantic solidarity and to build confidence.
• Seventh, such cooperation can also enable true transatlantic defense consolidation. Just look at Europe—cooperation came first, consolidation later.

In sum, transatlantic defense-industrial cooperation seems like an excellent idea—the mandate is there.

WHY ISN’T TRANSATLANTIC INDUSTRIAL COOPERATION OCCURRING? WHAT ARE THE IMPEDIMENTS?

There are many impediments to transatlantic cooperation, and most have already been discussed at this Workshop. There is little new to add, and that in itself is important. The truth is that the forces that are pulling against the Alliance are also working against this sort of cooperation. Let me review them quickly:

• The loss of a common threat—the nature of NATO is changing
• The unwillingness of many to sacrifice national goals for the sake of greater efficiency and military capability
• An unwillingness to create dependency
• Technology transfer policies
• Unequal burden-sharing
• A fear of American, U.K., and European “fortresses” as markets and production capabilities coalesce
• The inability to break down the barriers to cross-Atlantic industrial consolidation
• ESDI—not regarding policy, but practicality

To sum up, there are many influences hindering cooperation, and from an industry perspective the challenges are great.

WHAT MUST BE DONE TO ENABLE COOPERATION TO OCCUR?

The simple answer is that we must do something—we cannot afford to do nothing. In a rather interesting way, transatlantic armaments cooperation is a barometer of the health of the transatlantic partnership. An alliance demands that sacrifices be made for the common good. The current impasse seems to say that sacrifices are not being made because of impediments and parochial interests. Unless this changes, a fundamental dislocation in the transatlantic relationship may be uncovered.

In my view, the rhetoric surrounding this issue needs to be replaced with action. We need examples of success—not the continuing search for the perfect policy framework. Success will breed change. We need to stop carping publicly about technology transfer guidelines and negotiate them privately.

On the western side of the ocean, we need to recognize that in an era of information revolution, we do not need to protect technology that will be two generations old by the time it is deployed. On the eastern side of the Atlantic, we must not focus on the 10% or 15% of the technology glass that is empty, but see the 85% that is full and work to make it 95% or 100%. We also need to acknowledge that technical strength creates an advantage for the Alliance rather than complain or create problems in collaboration. In short, we need a major example of success. I offer NATO AGS as a very potent, potential example. Rapidly executed, it will meet priority Defense Capabilities Initiative goals, transfer critical technology, and serve as a paradigm for future cooperation.

INDUSTRY’S ROLE

Part of this set of challenges resides at the feet of government policy makers. A fair share of it belongs to us in industry because we are not politically inept technologists who know only how to take military requirements and turn them into perfectly performing hardware. Here is where industry consolidation can pay off. And here is where we can encourage change. We need to influence policy—which is the reason that so many of us from industry are here. We can do that on both sides of the Atlantic. Indeed, we are in a world where John Weston or Rainer Hertrich are as likely to be in Washington in Jacques Gansler’s office as I or my boss Kent Kresa are likely to be.

To sum up, industry and government must take action now on both sides of the Atlantic to move cooperation back on track.

CONCLUDING REMARKS

In the words of the great sage Pogo, when it comes to problems of transatlantic defense-industrial cooperation, we have found the enemy and it is us. But I believe that the priority assigned to the issue by the Chairman of the Military Committee, Admiral Venturoni, and by our Deputy Secretary of Defense, Rudy de Leon, will provide the opportunity for success that the transatlantic relationship dearly needs. Without industry’s help, cooperation will continue to flounder because of scarce investment dollars and technology transfer restrictions and concerns. But with our committed assistance, transatlantic defense-industrial cooperation can occur, merging parallel paths and providing critical military capability. It is up to our communities.

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