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Gripen E not reliant on Swiss referendum

The Swedish government is fully committed to the Saab Gripen E combat aircraft programme, irrespective of the outcome of a Swiss national referendum on the planned procurement of the type, company officials said on 11 March.

Speaking at the company's Linköping production facility near Stockholm, Saab's Swiss campaign leader for the Gripen E, Richard Smith, said that the contract signed with the Swedish Defence Materiel Administration (Försvarets materielverk - FMV) to deliver 60 Gripen E aircraft to the Swedish Air Force (SwAF) will continue regardless of how the Swiss vote in the referendum scheduled for mid-May.

"[If there is a 'no' vote], the Swedish programme continues unaffected," he said. Smith's comments provide an increased level of security for the Gripen E programme, which had originally been dependent on Saab securing a strategic partner to help fund development.

Should the Swiss vote against the Gripen (the referendum itself is actually on the Gripen Fund Law, rather than on the 22 aircraft themselves), Saab can still secure that strategic partner through Brazil, which has selected the Gripen E to fulfil its F-X2 requirement. Negotiations for that 36-aircraft contract are expected to be concluded at the end of 2014, but Smith suggested that not even that deal was now needed to secure the SwAF's order.

Even so, Saab will be desperate to sign Switzerland up as the first export customer for the Gripen E when the voters cast their ballots on 18 May. The Swiss Fighter Replacement programme has been a long and drawn out process, and one which Saab has not found easy despite emerging as the winning contender in November 2011.

"The campaign has been quite a roller-coaster of a ride," noted Smith. "The Gripen has been called the IKEA fighter in Switzerland - it's funny, but all these small hits can hurt you and force you to be reactive all the time. That takes energy and resources."

When the competition first started back in 2007, Saab at that time submitted its Gripen C/D to compete against the Boeing F/A-18E/F Super Hornet (which dropped out in 2008), Dassault Rafale, and Eurofighter Typhoon. In 2009, Saab threw the developmental Gripen NG (later to become Gripen E) into the mix, which it offered alongside the Gripen C/D. The competition stalled in 2010, but was resurrected in mid-2011 following intense lobbying by Swiss industry, which eagerly anticipated the 100% offset package worth some CHF2.2 billion (USD2.5 billion).

According to Smith, this offering of two differently designated aircraft muddied the waters somewhat and led to confusion in the minds of many in Switzerland and beyond. "The branding of Gripen E has got us into a difficult position, with people able to accuse it of being a 'paper airplane'," he said. "The same can be said for the Tranche 3 Typhoon or the Batch 2 or Batch 3 Rafale, but no one ever does. If we had just called it Gripen, I think we would have got away with a lot of the problems we have been having in the media. We gave the 'no' side ammunition to use against us."

Despite being widely anticipated to lose out to either the Rafale or Typhoon, the Gripen E was eventually selected by Switzerland with deliveries of 22 aircraft set to run from 2018 through to 2021 (in addition, an interim solution of eight Gripen C and three Gripen D aircraft were to be delivered in 2016).

For most competitions, subject to contract negotiations this would have been the end of the story. However, Switzerland has a system whereby if 50,000 citizens sign a petition the government must hold a referendum, and that is precisely what has happened with the Gripen E procurement. As Smith noted though, the Swiss are especially security conscious (as demonstrated by the nearly 70% vote to retain conscription in a recent referendum), and so a vote on the matter need not be such a bad thing.

Unfortunately for Saab, the Gripen has come up against a concerted attempt to thwart the procurement, as demonstrated by a series of misfortunes that have befallen the 'yes' campaign recently, and going back to even before when the referendum was called.

As Smith explained: "A critical Swiss Air Force evaluation report that was leaked in February 2012 certainly didn't help. The problem was that the aircraft in the report was a Gripen [at] MS 18 [standard]. The interim Gripen C aircraft will be MS 20, and the Gripen Es will be MS 21. The media started to make mixed-up comparisons. The report had 98 improvement points, some of which were very minor and a lot of which were resolved in MS 19 and implemented in MS 20. The remaining 46% would be included in MS 21."

This leaked report was followed by a Saab analysis of the probable parliamentary voting intentions on the Gripen that was leaked to the Swiss media. Such an analysis is a normal thing to do, Smith said, but it was spun in the media reports to be something altogether more sinister. In February 2014, a report by the Swedish ambassador to Switzerland, Per Thöresson, concerning plans to influence the national vote on the Gripen was again leaked, further compounding the problems already being faced by the Gripen team and forcing Saab to withdraw from any and all promotion of the Gripen in Switzerland in the run up to the vote.

As Smith noted, these events were not all that important in themselves, but have fed into the 'drip-drip' of negativity surrounding the programme in parts of the Swiss media. "Despite this though, the Swiss parliament blessed the overall procurement with an enormous majority [of] 113 to 68 votes. The vote on raising the spending ceiling to commit to CHF3.126 billion [the total value of the contract] passed by 114 to 70 votes, and Gripen Fund Law [which is what the referendum will be on] again passed with an 118 to 67 majority."

This glowing endorsement of the Gripen E procurement from Switzerland's ruling class will, Smith anticipates, be carried through to the referendum and result in getting the Swiss Air Force the right aircraft for its needs.

"The Gripen provides the right balance - it's an extremely capable aircraft but with procurement costs in line with the Swiss defence budget," he said. Perhaps of greater benefit to Switzerland is the offset package that will accompany the deal, should it be signed. "The industrial package played an important part [in the Gripen's original selection], as Swiss industry was really driving this.

"As of December 2013, Saab has delivered CHF330 million (over 500 contracts) in business to Swiss firms," Smith noted, adding: "It is important for Swiss businesses as once they are in the supply chain it opens up the potential to be a long-term partner with Saab.

"We want to put the tailcone, air brakes, rear fuselage, and pylons into Switzerland. In February 2014 we placed a CHF68 million contract with Ruag for the development and production of Gripen E pylons."

Saab hope and expect that the combination of the Gripen's suitability for the Swiss Air Force and the benefits it offers for Swiss industry will carry the referendum vote in its favour. If that does happen, then work on the contract can begin in earnest. "If it is a yes, all the agreements are all set up and in place and it's straight to contract. That's when the business really starts," Smith said.

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