N ° 7 Top 2021: Swiss F-35: Rising prices and falling industrial compensation

Article from November 30, 2021, N ° 8 of the TOP 2021 with 36.000 unique reads

Barely 5 months after the Lockheed-Martin F-35A was selected to replace the F-5 and F / A 18 of the Swiss air force, announcements and disillusions accumulate for manufacturers, but also for Swiss taxpayers, who will have to put their hands on the portfolio much more than initially announced to acquire the 36 American fighter jets. Indeed, on the occasion of the publication of the contractual data proposed by the United States in Bern within the framework of this contract, the first slippages are already apparent, and will very probably weigh heavily in the citizen vote which is emerging, as well as on the parliamentary inquiry launched a few days ago.

In the first place, it appeared that the budgetary envelope devoted to the acquisition of the 36 devices had known a significant increase between June and November, of nearly 20%, bringing the price requested by Lockheed-Martin to 6 billion Swiss francs, officially attributed to the inflation outlook by 2031. Surprisingly, however, the contract for the acquisition of the Patriot anti-aircraft missile batteries, he, remained the same at SF 1,9 billion. Obviously, the inflationary risk is very sectoral across the Atlantic. In addition, a murderous contractual clause has appeared in the contract proposed by Washington, according to which any additional operating costs, which were initially to be borne by the American seller, will only be borne until 2031. Knowing that the fleet acquired by Berne is expected to be in service for the next 50 years, and that delivery of the devices will not begin until 2026, the fiscal risk is minimal for the United States, and the obvious trap for the Swiss themselves .

For Norway, the prices announced by Lockheed-Martin during recent trade negotiations in Switzerland or Belgium do not represent the reality of the costs it is facing itself.

In addition to the additional billion Swiss francs that the 36 F-35A will cost, Swiss manufacturers had the unpleasant surprise to note that the industrial compensation linked to the contract, which was initially supposed to represent 3,6 billion Swiss francs, of which 1,1 billion Swiss francs in French-speaking Switzerland , had been reduced to only CHF 2,9 billion. While they had to, contractually, represent 60% of the value of the final contract, they now represent only 48% of this amount, without taking into account the maintenance costs, that is to say a shortfall of 700 million Swiss francs. Not only will this lead to a social deficit in terms of employment and industrial activity for the Swiss economy, but with an average levy rate of 43%, the shortfall for Swiss public finances will rise in terms of him to 300 million Swiss francs, to which must be added the additional 1 billion Swiss francs of the contract. Compared to some 2,2 million Swiss tax households, this increase will represent an additional cost of almost CHF 600 per household. Unfortunately, however, this only concerns the acquisition component, and other unpleasant surprises await Swiss taxpayers in the months to come.

These announcements also undermine the credibility of the evaluations carried out by Armasuisse in the competition which is the basis of the success of the F-35. Indeed, according to the group responsible for this selection, the choice of the F-35 allowed Switzerland to save SF 2 billion over the 30 years of commissioning of the devices, compared to the second best value. However, in 5 months of time, it is already 1,3 billion SF which evaporated, and this only on the file of the acquisitions. Knowing that Lockheed and Washington will no longer compensate for the additional operating costs beyond 2031, once the fleet is fully delivered and operational, there is now no doubt that the budgetary aspect of the contract has been knowingly manipulated by American negotiators. In addition, there is little doubt that this could not have been done without the complicity, at best passive, of the Swiss authorities, so as to present figures supporting the choice sought.

The replacement of the F / A 18 and F-5 of the Swiss Air Force could be postponed again if the planned vote were to break the contract with Lockheed-Martin

We can therefore understand the opinions expressed in this case, according to which the Swiss authorities like Armasuisse would not have lied so much to the other participants in the competition, that they would have knowingly lied to the Swiss themselves. And the elements that emerge today, barely a few months after the arbitration, clearly support this thesis. An objective study published on the basis of the values ​​observed by Norway on its fleet of F-35A, believes moreover that the figures announced in the Swiss contract are "fanciful", and especially that the contract itself is not at all revealing of the real costs of acquisition as of maintenance of the devices. In particular, the package of services, ammunition and spare parts necessary for the operational implementation of the devices would have been largely undervalued in Switzerland, but also in Belgium and the UAE, so as to present a "public face" price much more attractive. This same analysis specifies, moreover, that the cost of owning the F-35A would be of the order of $ 20 million per year (i.e. double that of a Rafale F4 editor's note), and that the price per hour Theft, announced at $ 25.000 by Lockheed-Martin, would actually be at least twice as much according to the Norwegian authorities themselves.

In the end, it now seems more than likely that the choice in favor of the F-35A was biased on the basis of “non-honest” numerical values ​​provided by the United States, and above all accepted as such by the Swiss authorities, of any evidence after the meeting between Joe Biden and his Swiss counterpart Guy Parmelin which appears as the turning point of this business in the making. The announcements of this type, which will not fail to multiply in the months to come, will undoubtedly generate great distrust of the Swiss themselves towards this contract, with the very real risk of seeing the vote in preparation breaking the OK, as it did in 2014 with regard to Swedish Gripens, on surprisingly similar bases. Unfortunately for the Swiss air forces, it seems likely that the replacement of their combat aircraft will once again be postponed, even as the needs continue to grow. Moreover, it should be noted that the Swiss authorities now seem to have taken as a defensive argument the absence of "Plan B" to get the Swiss themselves to swallow the pill.

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