One of the most powerful figures in the US defence industry believes that 2005 may in future be considered the breakthrough year in transatlantic co-operation. But potential obstacles could undo much of the progress and make further co-operation extremely difficult.

Speaking at a media dinner on the eve of the show, Bob Stevens, Lockheed Martin's chairman, president and chief executive, said that a risk of Europe turning in on itself and a lifting of the arms embargo on China could sour relations with the US.

The health of the industry demands further integration and open markets, with BAE Systems' increasing presence in the US and the selection of a Lockheed Martin/AgustaWestland/Bell Helicopter team to build the next generation of helicopter transport for the US president providing good examples of this.

On the programme front, insists Stevens, "genuine transatlantic co-operation is not another label for US exports - it means truly co-operative, global products with multi-national technology content.


"To me, this suggests that we have now reached a point in the development of new programmes where the global supply chain is a necessary part of the industrial package, where the best available technology at an affordable price is the dominant criterion for inclusion, and where multi-national teams are the norm for new programme starts."

However, there are clouds on the horizon.

While there have been welcome moves toward European integration, care has to be taken that this process does not tip over into a closed and protected European market.

"At the same time, there is a trend among some European governments to increase the requirements for industrial participation, or offset.

"Offset is an outmoded and inefficient aspect of defence trade, but is often seen as a political imperative or necessary aspect of the overall deal. In some countries, the demands in these offset requirements are approaching levels that will make the risks unacceptable to private-sector companies."

An additional worry, he says, are recent European calls to lift the current arms embargo on China.

"We have seen an extraordinarily strong reaction in the US Congress to such proposals. The potential for further action by the US Congress should be taken seriously, as it could take the form of restricting the flow of technology from the United States to Europe.

"This action would have very serious implications for transatlantic defence industrial co-operation."

Many of his European industrial colleagues share his concerns, he says.

Source: Flight Daily News