Switzerland halts Saab Gripen E aircraft procurement, $3.5 billion in 2013 orders

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Switzerland halts Saab Gripen E aircraft procurement, $3.5 billion in 2013 orders
May 19, 2014
By Courtney Howard
Executive Editor

BERNE, Switzerland, 19 May 2014. Officials in Switzerland held a national referendum on the funding law to procure Gripen E light single-engine multirole fighter aircraft from Saab. In 2013, the Swiss Parliament elected to purchase 22 Gripen E aircraft at a cost of roughly $3.5 billion. Saab continues the Gripen E program according to plan, with development and production of 60 Gripen E for Sweden ongoing and deliveries scheduled for 2018, officials say.

Saab signed a framework agreement with the Swedish Defence Materiel Administration (FMV) in February 2013 for the development and production of 60 Gripen E to Sweden and potentially 22 to Switzerland. Today’s referendum result on the funding law for Gripen means that the Swiss procurement process of 22 Gripen E stops. The Swedish development and production orders placed in 2013 continue, with delivery of Gripen E to Sweden commencing in 2018. The negotiations regarding 36 Gripen NG to Brazil are ongoing; an agreement is expected to be signed in 2014.

“Our focus is helping countries protect their ways of life, which we do by serving the global market with world-leading products, including Gripen. We have seen in Switzerland support for Gripen, including through its evaluation and selection over competitors and in the votations in the Swiss Parliament last year,” says Saab President and CEO Håkan Buskhe.

“We respect the process in Switzerland and do not comment on today’s outcome in the referendum. Following selection in 2011, hundreds of business relationships in Switzerland have been created through the Swiss Industrial Participation program, which was created in relation to the Gripen E procurement. These are relationships we look forward to continuing as long as possible,” Buskhe adds.

More than 500 contracts with 125 Swiss businesses have been arranged under the industrial participation program. Some are with Saab; most are with partners and suppliers to Saab.

Gripen is used for air defense in Sweden, South Africa, Czech Republic, Hungary, and Thailand. In addition, The Empire Test Pilot School (ETPS) in the U.K. uses Gripen in its training program for future test pilots.

Switzerland halts Saab Gripen E aircraft procurement, $3.5 billion in 2013 orders - Avionics Intelligence

 

[King Wally]

Referendum you say.... who on earth hijacks their own vital defence procurement actions by tossing it to a referendum? This is clearly one of those times where I can only shudder and recall the wise words once said by the Simpsons Kent Brockman: "I've said it before, and I'll say it again: democracy simply doesn't work".

 

[StobieWan]

Thing is, Switzerland is *very* democratic - the country is split into cantonments such that four people sitting around a desk in the same office may be paying different rates of tax, receiving different arrangements from local government. It's a very alien arrangement to most observers but this is how Switzerland is.

 

[the concerned]

Would ex -usn/usmc hornets be an option as I'm sure a few are about to become available with jsf deliveries commencing. Does anyone have any details on any up-coming hornet upgrades as we are looking at a couple of hundred surplus machines that would be available within the next 5-10 yrs

 

[StobieWan]

Would ex -usn/usmc hornets be an option as I'm sure a few are about to become available with jsf deliveries commencing. Does anyone have any details on any up-coming hornet upgrades as we are looking at a couple of hundred surplus machines that would be available within the next 5-10 yrs

The USMC's entire fleet is either shagged or just refurbed and much needed. Ditto the USN I believe - there's not going to be anything useful that's not needed.

 

[Waylander]

Seriously, IMO Switzerland is a prime example of how to include the population into important decisions.

It is defenitely better than the usual backroom deals which are decided by politicions who are at least as clueless as the median population if not more.

If one is not able to convince the people it probably isn't such a good idea to begin with...

 

[King Wally]

Seriously, IMO Switzerland is a prime example of how to include the population into important decisions.

It is defenitely better than the usual backroom deals which are decided by politicions who are at least as clueless as the median population if not more.

If one is not able to convince the people it probably isn't such a good idea to begin with...

I speak from experience in my home country of Australia, if taken to poll we'd loose our F-35A order instantly. The media has been bashing the thing relentlessly often with false info, and this would be what would kill the vote. Not that the people are stupid but because they have been fed wave after wave of media hype designed to spook people and get reaction rather then educate people in a balanced fashion.

Ultimately it would be factors such as this that would have more sway in such a result then true facts and calculated strategy for the nation. Why I think with these national security issues you need to leave them in the hands of a team of people who can turn off the TV and just sit down with accurate proposals and make a educated decision for the rest of us.

As for how Switzerland now retain a combat air force I don't know. The Gripen always was the low cost solution. They are left with legacy hornets with a finite life left or more expensive new jets like Eurofighter / F-35 etc that would scare the hell out of their voters with the price tag. It will just end in a loss of capability I guess. If you talk to people like New Zealand or the Philippines you'll see just how hard it is to regain lost capability like this. Once its gone its long gone, and could well be a 10 year effort to get it back even if the voters realise the need in the future and change their mind. Again democracy, great for some decisions but other times it really scares me.

 

[tonnyc]

Defense is one of the few things where democracy is not well-suited for it. You can determine its general direction democratically (and should), but the actual implementation is probably best left to a meritocracy. Mind you, not all military forces are meritocratic in practice, but in theory modern military forces are supposed to be.

In Switzerland's case, the democratic process should be asking "do you want an air force at all?" But if they say they do, then the selection of the aircraft should be left to people who understands what is needed and which aircraft(s) can fulfill the need. And once they do make a decision, don't try to override it.

What's going on right now is like a boss overriding an engineer's decision to buy equipment so the book will look good this quarter. Don't get me wrong, the people are the boss and legally they can override this. But if you hire an engineer to handle things you don't understand, then give the engineer what he needs and let him work.

 

[Bonza]

I speak from experience in my home country of Australia, if taken to poll we'd loose our F-35A order instantly. The media has been bashing the thing relentlessly often with false info, and this would be what would kill the vote. Not that the people are stupid but because they have been fed wave after wave of media hype designed to spook people and get reaction rather then educate people in a balanced fashion.

Ultimately it would be factors such as this that would have more sway in such a result then true facts and calculated strategy for the nation. Why I think with these national security issues you need to leave them in the hands of a team of people who can turn off the TV and just sit down with accurate proposals and make a educated decision for the rest of us.

As for how Switzerland now retain a combat air force I don't know. The Gripen always was the low cost solution. They are left with legacy hornets with a finite life left or more expensive new jets like Eurofighter / F-35 etc that would scare the hell out of their voters with the price tag. It will just end in a loss of capability I guess. If you talk to people like New Zealand or the Philippines you'll see just how hard it is to regain lost capability like this. Once its gone its long gone, and could well be a 10 year effort to get it back even if the voters realise the need in the future and change their mind. Again democracy, great for some decisions but other times it really scares me.

Is there a possibility they might opt for the Super Hornet? If they're already operating Hornets maybe it could be a potential selling point (despite the fact that the Super only has about ten percent commonality with the legacy Hornet). I imagine they'd come out cheaper than a Gripen E, due to the large fleet, good user base and existing production lines.

But then if it's put to a referendum, who knows? I just think the Super might be a bit more attractive due to their existing fleet.

 

[swerve]

The public has rejected the purchase of new jets to replace the F-5E, not just buying Gripen E. Buying F-18E instead would not be acceptable. It'd still be a purchase of new jets to replace the F-5E. The initial price would be unlikely to be less (twice as many of the same engines is cheaper?), & the operating cost would be considerably more. All those who campaigned against buying Gripen E would campaign against SH, & they'd have stronger arguments.

The problem Switzerland has now is what to do when the time comes to replace the F-18C/D. F-18E won't be in production then, so won't be an option.

 

[John Fedup]

I speak from experience in my home country of Australia, if taken to poll we'd loose our F-35A order instantly. The media has been bashing the thing relentlessly often with false info, and this would be what would kill the vote. Not that the people are stupid

The same outcome would happen in Canada and probably for any selected jet. Perhaps people in Australia are not stupid but in Canada people are stupid. Just look at how our country is falling apart due to people electing morons at the municipal, provincial, and federal level.

 

[colay]

Raised this earlier..,anyone know if the referendum result invalidates leasing the Gripens?

 

[tonnyc]

Technically, no. The referendum cancels the method of funding intended for buying the Gripen, which in turn invalidates the purchase. So if Switzerland wants to lease the Gripen, they can. However, right now that's political suicide. The public thinks they don't need fighter jets and will get pissed if the politicians try to sidestep the referendum's result. The original naysayers will have a field day.

It's probably safe to try that in a few years though. Especially if they can sell it as a cheaper solution. It's not actually cheaper long term and the missed industrial participation is not going to be regained, but one can spin it as cheaper.

 

[kato]

From a legal perspective, nothing stops the Swiss defence ministry from even buying the Gripen outright. They'd just need to buy it from their general defence budget. Ahead of the referendum they made a public statement that they would not countervene the referendum in this way.

What was downvoted was to create a special government fonds from which the VBS could buy the Gripens outside their regular budget. The fonds was to have received 300 million CHF per year which Swiss politicians are now squabbling over.

 

[AegisFC]

Is there a possibility they might opt for the Super Hornet? If they're already operating Hornets maybe it could be a potential selling point (despite the fact that the Super only has about ten percent commonality with the legacy Hornet). I imagine they'd come out cheaper than a Gripen E, due to the large fleet, good user base and existing production lines.

But then if it's put to a referendum, who knows? I just think the Super might be a bit more attractive due to their existing fleet.

The SHornet was never in the original competition.

 

[A4kscooter]

Playing devils advocate if I was Swiss voter living in a country surrounded by friendly nations that hasn't been to war in living memory - I'd ask myself why do we need any fighter aircraft.
Personnally I feel we live in uncertain times - problems with some Islamic factions, Russia flexing it military might and I'd argue one of the reasons Switzerland has remained a safe country is its ability to defend it self - at least unlike the UK rightly or wrongly it has a government that listens to the population.

 

[John Fedup]

The SHornet was never in the original competition.

The Swiss likely have the same problem as Canada would in opting for Superhornets. The amount of time required for getting funding in place, issuing a RFQ, and getting an actual order off will occur after the SH production line closes down. A USN purchase of more Growlers between now and early 2015 is the only way this line can last long enough for a possible order for Superhornets from Canada as no formal order for SHs or F-35s will come until after our 2016 election.

 

[Bonza]

The public has rejected the purchase of new jets to replace the F-5E, not just buying Gripen E. Buying F-18E instead would not be acceptable. It'd still be a purchase of new jets to replace the F-5E. The initial price would be unlikely to be less (twice as many of the same engines is cheaper?), & the operating cost would be considerably more. All those who campaigned against buying Gripen E would campaign against SH, & they'd have stronger arguments.

The problem Switzerland has now is what to do when the time comes to replace the F-18C/D. F-18E won't be in production then, so won't be an option.

Sorry I should have been more clear - I was thinking the Super might be cheaper in terms of cost per platform given the fleet size. You're right though, I should have considered engines/operating cost/etc.

 

[King Wally]

Technically, no. The referendum cancels the method of funding intended for buying the Gripen, which in turn invalidates the purchase. So if Switzerland wants to lease the Gripen, they can. However, right now that's political suicide. The public thinks they don't need fighter jets and will get pissed if the politicians try to sidestep the referendum's result. The original naysayers will have a field day.

It's probably safe to try that in a few years though. Especially if they can sell it as a cheaper solution. It's not actually cheaper long term and the missed industrial participation is not going to be regained, but one can spin it as cheaper.

The leasing approach, given the corner they backed themselves into politically is now likely they only hope now of retaining capability & skills once the classic hornets give up on them (which I expect in a few years even with upgrades). There are several other Air Forces that lease small numbers of Gripens and seemingly are happy with the arrangement.

There will certainly be someone back in the Airforce HQ with this in his presentation folder as the hail Mary solution.

 

[colay]

Just curious but how did the Swiss public react to their AF not being able to respond to the recent hijacking incident? Was there any concern,expressed at all?