The UAE speaks — and slaps Dassault

The UAE is to the Arab world what George Harrison was to The Beatles: Usually quiet, but always worth listening to when they do have something to say. Despite all of Dubai’s commercial bluster, weapons decisions get made in the richer, neighbouring emirate of Abu Dhabi. And Abu Dhabi almost never speaks about their weapons systems.

But now comes a seemingly routine news report — innocuous headline: “Mohammed bin Zayed tours Dubai Airshow 2011” –by the UAE’s official news agency. It carriers a bombshell of a statement attributed to Crown Prince Mohammed:

“Thanks to French President Sarkozy, France could not have done more diplomatically or politically to secure the Rafale deal. Bi-lateral relations have never been stronger and his constant personal intervention in this process has sustained Dassault at the forefront of our considerations. Regrettably Dassault seems unaware that all the diplomatic and political will in the World cannot overcome uncompetitive and unworkable commercial terms.”

Surely, Sarkozy’s re-election campaign will send the Crown Prince a “thank you” note for throwing Dassault under the proverbial bus.

If Dassault still doubted the UAE’s message after the Eurofighter Typhoon suddenly emerged on Saturday as a competitor, the Crown Prince apparently wanted to make the point as clearly as possible.  

So what happens now?

Eurofighter still might be playing the role of useful bargaining chip in the UAE’s campaign to extract a better price from Dassault. Eurofighter’s bid is being led by the UK. If the UAE’s goal is to hedge against a US monopoly of its weapons invenstory, the UK may be a questionable partner. Dassault knows that and may be prepared to stake perhaps its future as a fighter aircraft manufacturer on that bet.

Dassault’s track record on fighter deals is not comforting. In eight international competitions over the last decade, it has four losses (Netherlands, South Korea, Singapore and Morocco), one indecision (Brazil) and three still in competition (UAE, India and Switzerland). In both South Korea and Morocco, the Rafale enjoyed being perceived as the favourite but lost anyway.

Mohammed’s statement may indicate that Dassault has not learned the lesson from the Morocco fiasco. It emerged after the Lockheed Martin was selected that the US offered 36 F-16s for less than $2 billion, while Dassault’s bid proposed 18 Rafales for $3.2 billion. Talk about “uncompetitive and unworkable”.


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