Boeing has had enough of the American arms-export control regime

“Boeing, for the first time, has reached offshore to develop a military aircraft specifically intended for sale globally.” So starts Graham Warwick’s article on the “Loyal Wingman” drone this past week for Aviation Week & Space Technology. Robin Laird similarly covered the development for Breaking Defense. The program was announced at the biennial Avalon Airshow in Australia, but the company is not just currying local favor, and simply aiming to sell the new plane to the RAAF. That customer is discerning, but not big enough to absorb such a program on its own. Boeing is rather seeking, as Warwick writes, a “more flexible business model” that can produce a range of products “intended to be more easily and flexibly tailored to the needs of export customers than a U.S. system.” That Boeing needs to move offshore should be a wakeup call to the Congress that something is rotten in the American arms-export regime.

 

We should not understate this development. As Laird cites Shane Arnott, the director of Boeing’s Phantom Works, “this is the first time that Boeing has designed and developed an aircraft, an unmanned aircraft, outside the United States in our hundred-year history.” Will be, perhaps, as the Loyal Wingman is so far just a mock-up. To be fair, seeking the best engineering talent worldwide is a sensible pursuit for any engineering-intensive company, and Australia clearly has talent. Boeing is also leveraging its large (if relatively newly large) presence in Australia for industrial capacities, and the country’s vast, open airspace for testing and training. But most remarkably, Arnott specifically cited the Commonwealth’s new export policy as important “in shaping global opportunities.”

 

How so? Consider how challenging American arms exports can be, and for the most picayune of reasons. Every export of a minor upgrade or even a spare part must be tediously and recurrently approved by Foggy Bottom’s Office of Regional Security and Arms Transfers, the Pentagon’s Defense Security Cooperation Agency, and the various other inter-agency agencies of America’s arms-export bureaucracy. Ultimately, almost everything will be approved, but only after mysterious delays and a 4.7 percent carrying charge for the administration of the Foreign Military Sales (FMS) program. Almost, I note, for there are the occasional excesses, such as forbidding ally Israel from selling upgraded-but-second-hand fighter jets to NATO ally Croatia. Meanwhile, sales to loathsome regimes around the world may continue apace, and with the official endorsement of the FMS system. Because hey, “maybe he did and maybe he didn’t!”

 

Reflect on that for a moment, and behold the spectacle of the United States' largest aircraft manufacturer choosing to go overseas not just to build an airplane, but to develop one, and in its entirety, for a purely political reason.

Comments

[Dave Foster]

Jim,

Would you expect Congress to attempt to sanction Boeing somehow for spinning off an offshore business unit in order to transparently bypass the burdensome and somewhat arbitrary FMS path? Also, with all the hubbub about Turkey buying S-400/500(?), I haven't seen similar excitement about India buying/using both Russian (substantial decrease over the past few years, however) and US equipment. I can imagine the intrigue on flight lines and ports...The mitigation of US administrivia via setting offshore and mixing US and other nation's kit may well put US equipment in proximity to Russian (or Chinese) equipment in the future with plenty of tech transfer/intel implications.

[James Hasik]

I would not. I have heard few defenses of the FMS system from the Congress. Frankly, I have heard few defenses from anyone. It has mostly been Rose Gottemoeller (now the NATO deputy secretary general) who seems content with the pace and cost of the process. To the contrary, this might—and I am indeed hoping that this will—spur some serious effort at reform. Yes, this administration has an initiative underway to revise its Conventional Arms Transfer Policy (CATP). The Bush 43 and Obama Administrations had their reform efforts as well. For this reason, I don't know that another run at the interagency process by temporary political appointees will work any better.

[Dave Foster]

It seems that in cases where a firm attempts to extend the production run of originally US-used kit to other countries, that there is probably no way around FMS/DCS. But in cases where the US isn't buying, I can see where US firms are thus incentivized to try to avoid the constraints as Boeing is doing. Plenty of business abroad...