If you think the United States has problems with the constant price increase of new-generation programs like the Lockheed Martin F-35 Joint Strike Fighter (JSF), take a look at the situation with the four-nation consortium Eurofighter program. Several news reports, including a January 26 story in the Washington, D.C. based Defense News, state that the bill for the Eurofighter is going to now cost some €10 billion ($15 billion) more than the most recent cost estimates had previously projected. The main reason for the increase in the program's cost is that the ambitious plans for three production runs--referred to as Tranche 1, 2 and 3--may now have to be scaled back to the point where Tranche 3 will be cancelled all together. No official announcement has been made, but without the additional production of the third Tranche in order to help amortise the R&D costs of the aircraft, the costs for the first two batches must increase accordingly.
As far back as December 2006 the then-UK Defense Procurement Minister, Lord Drayson, said that he would sign no contract to build Tranche 3 airplanes until the program is reformed.
"The area which for 2007 is a big project for me to deliver is further changes in the Typhoon industrial structure," he told the parliamentary committee in testimony on the MoD's 2005 Defence Industrial Strategy. "Before we can go forward on a Tranche 3 decision--and we do not need to take that decision yet--I believe there needs to be a remodeling of the [Eurofighter] Typhoon structure."
But another real driver behind the woes of the airplane is the increasing conflict of interest between those Eurofighter consortium nations that are part of the F-35 program and those that are not. The UK and Italy are both heavily vested in the U.S. program and they now realize that they cannot afford to have the JSF as part of their air force and at the same time procure additional Eurofighters with the advanced systems originally called for in Tranche 3. But Eurofighter is the only new aircraft being procured by the other two partners, Germany and Spain, and they have to stay in to the end and fulfill all of their procurement plans in order to maintain their force levels and replace aging aircraft in their existing fleets.
This puts countries in both categories in a bad spot. The Eurofighter definitely needs all of the future growth capabilities listed above--particularly the AESA radar--in order to remain relevant in any future combat environment. This will come at considerable cost to those "Eurofighter only" nations. For those that are buying the Euro jet and the JSF as well, they are taking a gamble that the US program stays on schedule and that they can afford to stretch out retrofitting of the AESA and other technologies--technologies that the JSF will have on board from day one--sometime down the road.
At the end of the day both airplanes are primarily industrial base program in which the main underlying purpose is to preserve infrastructure and keep jobs from going offshore. The question is which industry is going to be the one that ultimately is "chosen" to survive in the long-term.