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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.
His first instinct was to quickly pull his plane, with the registration number 30+39, to the side to avoid hitting the birds. But then, unexpectedly, the aircraft spontaneously rolled to the side by 90 degrees.
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.
Despite the warnings, little happened. On March 31, 2006, a Eurofighter with the registration number 98+03 took off on a flight bound for Jever Air Base in northern Germany. What the pilot didn't know was that the bolt holding the nose landing gear in its bracket was not properly secured, causing it to loosen during the flight. When the unsuspecting pilot landed, the landing gear was already hanging at an angle underneath the jet. He was lucky the landing gear didn't collapse.
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.
Errors and Carelessness
In a memorandum dated April 27, 2006, the company was forced to make the rueful confession that the problem was the result of production errors and carelessness. The incident had far-reaching consequences. Production had to be stopped, and all aircraft produced until then had to be inspected for similar assembly errors.
German taxpayers paid the costs of two employees' careless work. Not surprisingly, the EADS inspectors found no evidence of gross negligence. This saved their company a lot of money, because the Eurofighter contract stipulated that the manufacturer was only liable for production defects in such a case.
Relations between EADS and the Bundeswehr soured over time. The company complained to the Defense Ministry in Berlin about the fastidious inspectors at the Bundeswehr procurement office. The inspectors, for their part, complained that they had to inspect defective aircraft up to three times. Sometimes there were leaks in the tanks, and sometimes the aircraft behaved in unexpected ways, such as a cockpit canopy opening on its own while the plane was taxiing for takeoff.
An internal list from Austria reveals the poor quality of the Eurofighters at the time. Between 2007 and 2009, the Austrian Air Force took delivery of 15 first-generation Eurofighters, most of which had been intended for the Bundeswehr. By May 2011, an employee had chronicled 68 defects in the aircraft that had led to emergencies.
For example, it turned out that the altimeter was off by up to 60 meters (197 feet), which could be fatal for the pilot in an emergency. The Austrians requested an F-4 Phantom from the German Air Force, so that it could accompany two defective Eurofighters for a comparison of altimeter displays. But something happened before the test could be done: The electronic system of one of the Eurofighters was pumping kerosene incorrectly, throwing the plane dangerously off balance, which could have caused it to crash. When SPIEGEL contacted EADS, the company denied that it had found any quality defects in its own product.
On the Fringes of Legality
But the German inspectors are well aware of the reported defects in the Austrian planes, because the Defense Ministry in Berlin compelled them to handle routine testing for the Austrians.
Officials at the Bundeswehr procurement office gradually decided to bare their teeth to EADS for the first time. On Sept. 30, 2008, the Bundeswehr allowed the Manching plant's license as a recognized aviation operation to expire. In a March 2008 letter addressed to Bernhard Gerwert, the head of EADS Deutschland Military Air Systems, the Koblenz office cited "substantial mistakes and defects in the quality management system."
Speaking notes for the agency head contain concrete figures and state that "35 defects in the production process were discovered and documented during the final inspection." The documents also note that quality management found 49 defects within seven months.
This is why, in the letter to Gerwert, the Koblenz inspectors also noted: "From the standpoint of aviation, liability and licensing laws, the current state is no longer acceptable by the customer."
But by withdrawing the license, the inspectors also placed themselves in a delicate position, because they were acting on the fringes of legality. They had certified a number of Eurofighters for service in the Air Force, even though the manufacturer no longer held the necessary license.
The fighter jets were given regular registration numbers, like 30+45, 30+15 and 31+22. This allowed them to fly in German air space, and they were even sent to an air show in Hungary. Fortunately, there were no incidents, or else court judges would probably have taken a very close look at the circumstances of their licensing.
Unlimited Liability
The inspectors at the Bundeswehr procurement office are aware of the sensitive legal situation. They are personally liable for the signatures on the documents after the final test of each Eurofighter. Some threatened to withhold their approval. There is also a significant risk for the government, because the Bundeswehr, unlike civil aviation authorities, has unlimited liability for losses resulting from an accident. Commenting on this in an internal memo, a concerned official wrote: "If a Bundeswehr plane crashes and causes substantial damage to third parties that can be attributed to the withdrawal of certification, the federal government will be fully liable."
The supervisors at the procurement office and the Defense Ministry ignored the memo, because the ministry was determined to get the plane no matter what. Pilots at German air bases were already waiting anxiously for the Eurofighter, which was supposed to replace the more than 30-year-old Phantom jets made by American defense contractor McDonnell Douglas.
Orders were given to inspect the aircraft somewhat more carefully and then approve them. According to the documents in SPIEGEL's possession, this condition lasted until April 6, 2011, which both the Bundeswehr and EADS deny.
The relationship between EADS and the German Defense Ministry is poisoned, partly because EADS knows how to circumvent the rules and provoke officials.
Some time ago, say officials in Koblenz, a potential foreign buyer paid a visit to the Manching plant. Unfortunately, there was only one Bundeswehr aircraft in the hangar on that day, and it also lacked the licensing stamp. When the Bundeswehr test pilots refused to fly the plane, an EADS pilot promptly took the plane out on a short demonstration flight.
Translated from the German by Christopher Sultan
URL:
http://www.spiegel.de/international/eur ... 10231.html
to read 1990s mindset and 
- read up.
Intuitively I felt it was a bad deal for our nation. Especially mms and money take ahluwalia, I don't think can do anything good for the nation.
