Fighter Flaws: Warplane Costs Soar amid Mismanagment
Defense contractor EADS appears to have cut corners in its construction of the Eurofighter jet for the German military. The government faces billions in additional costs, but it doesn't want taxpayers to find out until after federal election this fall.
It's an incident that the German military would rather have kept secret. On July 27, 2007, a Eurofighter was flying at low altitude above the Neuburg Air Base in Upper Bavaria when the pilot suddenly spotted a flock of birds in front of the plane.
Personnel in the control tower panicked as the jet sped towards them. Only at the last second did the pilot manage to regain control of the jet. The investigative report by the military, or Bundeswehr, referred to the incident as a "bank angle overshoot," noting drily that "the unexpected behavior" could have resulted in the "loss of the aircraft." In other words, the jet barely escaped going down in flames.
A software error was to blame, but it wasn't the only problem that would be found in Eurofighter jets. Together with European partners, the company that eventually became defense contractor EADS took 25 years to develop and produce the aircraft. Their aim was to prove that the Americans weren't the only ones capable of building high-tech fighter jets, but what has become Europe's largest defense project was ill-fated from the start.
The mere fact that the aircraft was once known as the "Jäger 90" (Hunter 90) in Germany reveals the extent of the project's failure. After dramatic delays in development, the jet was renamed "Eurofighter," and even today, all 180 jets originally ordered by the Bundeswehr still haven't been delivered.
'Another Debacle' Looms
Now internal documents show that the aircraft's problems are much more serious than previously known. In addition, SPIEGEL calculations indicate that, by the end of this year, the Bundeswehr will already have spent 14.5 billion ($18.6 billion) of the roughly 14.7 billion that the German parliament has approved for the program. But when the money is used up, only 108 of the 143 Eurofighters ordered to date, not to mention the 180 originally planned, will have been delivered. EADS will not continue making the planes for free, though.
Even the Bundeswehr estimates the cost of the program at 16.8 billion by 2018. But that represents only 143 delivered aircraft. The last jets, part of the so-called Tranche 3 B, will cost the government billions more.
It appears that German citizens will not be informed of the true costs of the Eurofighter before the national election on Sept. 22, at least according to the Defense Ministry's plan. The case is now closed and there is "currently no reason" for further discussion of the subject, officials there say.
EADS is also unwilling to make things difficult for the government at the moment, and currently has no plans to submit a new bid. The company has no interest in making even more trouble for Defense Minister Thomas de Maizière, who is already under fire. The opposition, on the other hand, wants clarity. "After the 'Euro Hawk,' this threatens to become yet another defense debacle at the taxpayers' expense," says Rainer Arnold, a defense policy expert with the center-left Social Democratic Party (SPD), in reference to the recent cancellation of the Euro Hawk surveillance drone program, which wasted some 500 million.
One reason behind the skyrocketing costs of the Eurofighter is the apparently unprecedented sloppiness in production. SPIEGEL has obtained documents from the Bundeswehr and EADS that provide an insight into the problems. There was so much mismanagement that, on Oct. 1, 2008, the military did not extend the license to remain a Bundeswehr aviation site for an EADS plant in the Bavarian town of Manching.
Costs Get Out of Hand
What seems like a straightforward administrative procedure may have serious consequences. Even after the loss of the license, aircraft were still put into service, and the Bundeswehr, as the purchaser of the aircraft, reportedly inspected them a little more carefully, only to issue its stamp of approval, after all. This is highly controversial from a legal standpoint. If a Eurofighter were to crash over Germany, courts could reach the conclusion that the planes should never have been allowed to take off in the first place.
The Eurofighter's story is one of broken promises. When the jet's predecessor was conceived in the 1980s, shortly after Helmut Kohl came into office as chancellor, the industry guaranteed that it could build the aircraft at a cost of 65 million deutsche marks apiece. But the costs continually increased after that.
The figure had gone up to 130 million deutsche marks by the early 1990s, and when the Bundestag budget committee finally decided to order the aircraft in 1997, it set a new price ceiling: 180 aircraft were to cost no more than 11.8 billion. The price took into account the fact that the planes had been technically downgraded, an effort by then Defense Minister Volker Rühe to prevent the price from continuing to rise.
But it didn't do any good. In 2004, the price cap on the total order was increased by another 250 million. By then, Chancellor Gerhard Schröder was in office. In the current draft budget for 2013, the costs are estimated at close to 17 billion.
But this is still an estimate based on the most favorable assumptions, which will not be sufficient, as Chancellor Angela Merkel knows all too well. That's because the last 37 aircraft the Bundestag will receive are among those with the most complex technology. They are jets with "multiple banking capability," which can both engage in air strikes and intercept enemy aircraft.
This version of the Eurofighter will also be the most expensive, which means that the Bundeswehr faces a dilemma. On the one hand, its budget is almost exhausted. On the other hand, it is determined not to do without the most state-of-the-art version of the Eurofighter. The Defense Ministry is now officially saying that a decision on the purchase of the tranche hasn't been reached yet. "We are currently reviewing the next steps," the ministry writes in a statement. But it was only at the end of June that the deputy department head in charge of procurement at the ministry presented puzzled industry executives with an old, new number: 180.
Who Is to Blame?
There is a plan to sell the aircraft that were initially delivered to the German air force, which would generate several hundred million euros in revenue. But the jets are now outdated, and NATO partners are only marginally interested.
Behind the scenes, finger-pointing has already begun over who is to blame for the upcoming debacle. Officials at EADS say costs increased because the German Air Force was constantly adding new, special requests. The defense minister denies all responsibility and blames the cost increase on inflation.
But both sides are trying to conceal the fact that there could be a very simple reason for the explosion in the cost of the Eurofighter -- sloppy production, for which both EADS and the Bundeswehr were responsible. While EADS was long unable to come to grips with problems at the Manching plant, the Bundeswehr tolerated the lax production standards for too long.
The Federal Office for Arms Technology and Procurement in the western city of Koblenz is in charge of supervising EADS. The Bundeswehr's largest agency, with some 9,600 employees, it maintains field offices at the major production plants of German defense contractors, including the Manching EADS plant.
Soon after the first Eurofighters left the plant, officials there encountered problems. On Aug. 23, 2004, they noted that the plant lacked specially trained employees to supervise each individual step in the production of the highly complex aircraft. Without functioning quality management, the plant's license as a recognized aviation operation for the Bundeswehr is no longer valid. At the time, inspectors threatened to extend the license only if a long list of deficiencies were corrected.
According to an insider, EADS did not report the incident at first. But the Air Force's flight supervision office was notified, and the entire Eurofighter fleet was grounded immediately. The cause of the problem was quickly determined: the bolt had been improperly installed. EADS was compelled to analyze the entire production process.
- Part 1: Warplane Costs Soar amid Mismanagment
- Part 2: Errors and Carelessness
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