SCAF FCAS avion - PDG CEO Airbus Dirk Hoke au sénat

Mr. President, ladies and gentlemen senators. Ladies and gentlemen, I will speak in French, but I apologize that it is not my mother tongue. I hope it will be okay; I will also read, I will read a little, but I am unable to answer all the questions extemporaneously. Already, thank you for your invitation. I am very honored to speak before you today on behalf of Airbus, which represents in its area of expertise Germany and Spain within SCAF. As you recalled, the program is a major challenge for France, Germany, and Spain, for Europe, and for the future of its industry. To succeed in this ambitious project, to meet the needs of our European strategic autonomy, SCAF can only be conceived together, in a cooperation where each participates fully and to the level of its investments. That is really important for all three countries, I am sure we all agree. It is important to recall that SCAF is an innovative system structured around seven pillars: the integration of complete systems that, contrary to some opinions, will involve working with Dassault for 30 years on the future fighter, the NGF, its engine, and motorization under France's responsibility; the support drone and the combat cloud under Germany's responsibility; and sensors under Spain's responsibility. Just to remind you, we started this discussion in 2017 and we signed the high-level treaty in April 2018. In two years, we signed a first contract for joint studies; we signed, in March 2020, contracts for phase 1a. I don't think there exists a program of this size that has advanced with such speed; it's truly incredible what we have done together. A huge amount of work was accomplished in a very short time by the states and the industries. We have finalized five pillars of this set, including the combat cloud, with Thales and Indra; the remote carriers, with MBDA and Safran. Agreements have been reached between all these actors, showing that three-way cooperation with each at its place is possible. On the NGF, we must finalize with Dassault the principles of decision-making, governance, and find an agreement on the last packages of a more logical nature. It is not easy because, as Antoine explained well, we are very different; we come with completely different histories and project cultures. But now we must really find an agreement, and we know how to manage projects in the future. It is not easy, but we have advanced well.

On the NGF, two principles on which we agree: an efficient organization that allows the industrial partners to make the right decisions and meet their commitments to the clients, notably in terms of deadlines and costs. That is important for all industrial partners. We want to carry out a project within the budget and with all the specifications defined by the clients—the three states—and we will of course execute it together as partners. There is a need to have a responsible master contractor, i.e., a prime contractor with the levers to exercise its role. That is something Éric Trappier expressed as very important, and where there are doubts: can we do that within the structure we are defining now as a kind of command? We believe yes, now we must build trust that we can truly execute projects within the defined structure. We have different experiences with Dassault, but we do the same trade, and our objective is a common future, SCAF. However, we think the master contractor should not control everything and make all program decisions alone. That is truly the fear of the German and Spanish states, because they have invested for decades in capabilities; they want to be sure that these capabilities are used in the development path of SCAF. That is exactly what France also expects from the projects and from all industries. It is through a clear regulation among partners, not subcontractors, that each can build most efficiently, bringing its skills, participating in decision-making, and committing to the program's progress, while preserving know-how in certain critical areas. That is easy to say but not so easy to define in detail in the contract—how we will work together. That is exactly what we are doing with the teams: defining the details to give confidence between teams that we can execute projects in a structured manner without questioning Dassault's position at all, while also giving confidence to the states that we will use all the skills that exist in our states.

The proposal that is not new respects all these principles: a governance based on a common commitment of partners while giving Dassault as master contractor the capacity for arbitration and decision to ensure control of schedule, costs, and performance. Concretely, in case of disagreement, Dassault can arbitrate—we call that 'casting vote.' If there is a discussion between us and we cannot find a solution, Dassault has the right to continue so as not to lose time. We have a sharing of responsibilities that allows Dassault to control activities on the critical path to first flight, notably system integration, flight controls, and flight tests, and allows Airbus to exercise its responsibility as partner for certain key systems that will then be integrated into the aircraft under the master contractor's responsibility. In clear terms, on strategically sensitive subjects, Dassault retains control and exercises its authority, taking responsibility for each part of the work. That was the latest proposal from Airbus, and we think it is well balanced, even though it was not easy to convince Spain and Germany to follow these proposals because, as you know, we had discussions about 'catching' the work—we try to avoid that discussion because we really enter into the details to understand where the problem lies in the cooperation. Currently, the problems are really the two subjects I mentioned: governance to ensure that the master contractor can exercise its responsibility, and on the other side, how to ensure that with all the pressure we will have for schedule and budget, all the skills existing in the three countries are used to truly create the best product, the best possible systems. This principle of balanced return is what the nations demand in return for their investment in SCAF, and it was applied in other pillars under German or Spanish responsibility. Moreover, the DGA ensured that Thales is a strategic part of the combat cloud, for example. So it is well known.

Irresponsible. And that is exactly what we are asking for in the NGF. That is important to me. It is not that we have already reached an agreement with the French and Spanish partners for the cloud combat. We gave 33% each for the web share, but also for the lichees, because we want to work as partners. We want to ensure that everyone working on the approach truly has a win-win feeling. Because ultimately, we are talking about a technological demonstrator. If we don't work well together, neither you nor the other countries will accelerate the development and production programs. Our objective is not to create a social demand. We want to create a system of systems that will be ready when needed. We must demonstrate to you, to Spain, and to Germany that we are true partners, that we work for the good of the three states and for Europe, and that we can use all the capabilities that exist in the three countries to succeed. We need to get to know each other better, we need to trust each other. And as has been well explained, it's not easy because we are very different. And I believe that is an advantage: being different, because if we are all the same, we will not create differentiation, we will not create innovation. Here we are talking about a product that will go into series production in the microwave era. That means we cannot use, as we did in previous projects, the technologies of 2010. We have seen our world change in the last fifteen years, especially with smartphones, iPods, and all that, with all the IT systems, we have accelerated change infinitely. That means if we want to go into operation with a system that is based on 2010-2020 technology, it's not worth it. That means we will change how we work together, how we develop software. It means we must be agile, and that is very important for all of us to understand. The demonstrator is really to see if there are programs within the development and production programs that will be completely different. It will be a blank slate. We really need to see if we are partners and how we can create a system that will be competitive in the 2040s.

Learning takes time, especially when we are in a negotiation phase. Moreover, in some areas we are in competition, so it is normal that we do not know well what the other does. For example, on flight controls, we have been working with a team of about 150 engineers for more than 50 years across two generations of fighter aircraft: the Tornado and the Eurofighter, within a dedicated center of excellence where we also train engineers from BP and from Indre. We must come together as the best team, each in their role, to build the best aircraft, the best system. For that, we are stronger as three with Spain. Spain makes SCAF even more European. It allows reducing costs for France and for Germany. As has been explained, we are talking about a system that will be the largest investment in the history of European defense. It allows reducing costs for France and for Germany. It brings recognized skills and expertise in many areas. Spain is, for example, a principal partner in their area. There is a unique future military capability in many programs, including strategic ones for France, such as the Rafale and tactical transport aircraft.

In conclusion, I say today to the French Senate what I will say to the German Bundestag and to the Spanish Parliament: SCAF is our common future. It is a historic opportunity. We will succeed, and I am confident we are close to an agreement. Even if it is complicated, even if we are different, I believe there is no other chance. As has been said, we are not working on a Plan B because Plan B is not a real option. It must work. We must be capable of working together. It is important for European strategic autonomy. It is important for France, for Germany, for Spain. And we have demonstrated in the last three years that we are advancing faster than other teams. We have also changed the way we look at defense strategy. Because it has been three years since the agreement between Chancellor Merkel and President Macron was signed in July 2017. That is only three and a half years, and we have already shown that we can change the way we work together, the way we develop systems of systems that did not exist before. And now we see in the world that others are developing similar systems, but it was we who created this idea. In conclusion, I ask for your confidence and support. I will be happy to answer your questions, which I imagine will be numerous. And I thank you for being here today, because I know it is not normal, but I believe it is important if we want to work together, if we want to create the trust necessary to execute this important project. To answer questions, to talk about perceptions. And I am sure that today we will answer all your questions, and we will continue the negotiation. Because we have no alternative, we have no Plan B. We will succeed together, and we will create this session. Thank you for your attention.

Well, it is of course difficult for me to say how it went in the fall. It was not completely a surprise. There is a change of opinion in the population due to the management of COVID-19, and we see that it can create situations where we don't know how it will go in the national elections. And for that, I don't feel in a position to say how it will go, because I believe no one can say that. Is there a risk of a complete change? Yes, I think so. We cannot ignore it. Could it have an impact on the SCAF project? Yes, also because we don't know how, after the formation of a new government, it will go. That was exactly the reason why we accelerated projects for Phase 1b and Phase 2. Because if we look at the original plans, we had a plan to finalize before the yellow concept? Actually, to finalize Phase 1a and then enter Phase 1b and 2. But no, we are still in Phase 1a? No, it is already Phase 1b. We did that to avoid problems next year, to be sure we can already densify? And now everything necessary to avoid this discussion. That was the reason why we made enormous industrial efforts to make an offer. If you recall, the RFP was launched at the beginning of October last year, and we responded already at the end. We had only four weeks to complete offers for the seven pillars. Then we had time to modify and adapt because the budget was not large enough. We adapted and made a step forward in mid-January. And now we are in a process to adapt and finalize the contracts for the seven pillars. And I believe that for a few billion euros, we have already made offers in this context. And for that, we are making enormous efforts to succeed, especially to enter into a contract before the elections. And as you know, the process is a bit complicated in Germany because it is not only the approval of the ministries but also the Ministry of Finance, and then also the point of the Bundestag. There is enormous preparation, three months of preparation to pass through parliament. If we look at that, we estimate that from a certain point it becomes more and more difficult to realize projects that exceed 25 million. In July, in my opinion, it is not possible. It is already very late. The original plan was to enter parliament in May, meaning we had to finish all negotiations in February to enter. That means we are already very, very late in the process. Is it still feasible? Yes, I believe in this case maybe yes. It is not guaranteed, because everyone wants it, we see support from the chancellery and the government, but it requires efforts. We also have a lot of pressure to finish negotiations, not only with the states because we still need to create an agreement on prices and on the work share with the nations, and finalize contracts. And we have a few days to do it. So there is a lot of pressure. But my opponents? Can it create an impact? Yes, that is why it is even more important that we can finish now.

But what will the government be at this moment? I don't have a feeling of what it could give in the coming years, in the coming months, for these projects but also for the goal of SCAF. Of course, we have a Bundestag that is harder, it also becomes part of our history. I believe it is clear why we constituted ourselves in this way. And it is not a guarantee, even if we have all the support, that if we cannot answer all the questions of parliament, it is not guaranteed that we can pass. But for that, one of the first steps is that the industry says, and not only us but also all our suppliers and partners, that they are happy with the structures we have created. If someone says no, we don't want, we lose a few weeks, a few months, and that could already be too late to finalize an important gap. And we have made a lot of efforts in parallel. We go with the German industrialists every week, every month, we do a lot of information tours for the deputies, because there are of course different political strategies. They need to understand the real detail behind. And if you see what was written in the press, it is not much for this process, because I hope that you have our view that we have not made much noise in Germany, because we want to pass through parliament and we do not want to create additional emotions. For that, we also want to explain what is happening, we need to create trust. But then we have a few weeks to finalize, to receive the agreement of the Bundestag. There is still a lot of work to do to show that what we describe in a few words is really what they expect from us. And there is work to do for the choice of technologies.

As Antoine explained well, that is exactly why we launched together the idea of a system of systems, SCAF. Because if we had not done that, the risk that many European countries would buy American products and systems is obvious. We have made real efforts because ultimately we need a strategy of strategic autonomy in Europe. We also need to protect the capabilities and capacities we have invested in for about ten years, because that will guarantee that we are autonomous, that we have the innovations in our countries that we need in the coming years. Is there really an alternative? No. We must also stop and take the decision for the drones. I know it was a huge effort for the four countries, but if we had not done that, we would not have the means to keep the capabilities in Europe in the coming years, because it becomes more and more difficult to compete with the large systems. If we want to create SCAF, we need these capabilities because they are part of the roadmap. And for SCAF, we cannot do it alone. We must look at them together with SCAF. It makes a lot of sense to develop this roadmap, even if it may be a bit more expensive, but it will pay off in the coming years. We will have the capabilities to develop the skills and to develop engines that we need for SCAF. And I believe it is a good decision, a decision for strategic autonomy. I am 100% sure it was the right decision. For us, it was also important because, as Airbus, we have invested in the last ten years, we have invested 1 billion of our own money in the capabilities of the drone? But we also have to say that if we don't have a project now, we stop. And after that, it was really important to stabilize these capabilities and develop them for the future. I fully agree that for SCAF we need this roadmap for the drone and for the engine. We will develop these skills together with Airbus and with NVIDIA, and you know better than I the capabilities of the media? They are very strong, and I am confident we will develop good solutions for SCAF. I believe I have published, but perhaps for the 6.1 strategy, and I do it freely for the Toulouse region. Thank you.

No, I think the maritime patrol news that just came out is not going in the right direction either, since it was a project we were very attached to together. Up to now, it was not an F-18 purchase; it was only a decision in progress. It's not a purchase like Antoine expressed. I think it was very important because in this case, we also have to consider the F-35. Ultimately, it was really a decision against the F-35 for collaboration with France for SCAF, and that is truly necessary. After that, we also have to consider the needs of the air forces. They looked at all the capabilities they need, and we are discussing that the Tornado is becoming more and more expensive for their operations. That was the vision: how we can replace the Tornado, how we can replace functions that the Tornado represents today. That was the government's desire to choose a compromise. We believe in it, and I think it's important to see that it is truly a compromise for other systems. I believe the main system, the decision, was for the Tornado, for SCAF, etc. It is truly the collaboration with France. This was also declared in July 2007 between France and Germany, where the SCAF programs were declared and chosen together. I think I have never heard that others are going behind this strategy. We will continue to work on this. One point: is there a risk that we will have three different aircraft? No, not at all. And there I believe everyone, the nations and the dossier, agree. We have already learned that fragmentation does not work. The idea of SCAF is to work against fragmentation, to create a platform that is truly European, that represents a common solution. Of course, that was also the case for the A400M. There we saw we had completely different parachutes, even the parachutes are different. That is not something that works if we want to work together. It is not an efficient solution. I am sure we will have one aircraft. The discussion, and I think there was confusion in Germany, because there was confusion about whether we will have a second demonstrator based on the Rafael? Of course, that is not a question. Just to explain how the specifications work: we developed the architecture together between the partners. The chiefs of the air forces together chose not us, the clients. They chose five? They are discussing the specifications. Each can evaluate which is the best for their demand, and they will choose which specifications and which attitude they want. It will not be a Rafale, it will not be a Eurofighter, because it was clearly said that the three states are not ready to pay billions of euros for a Rafale plus. We want to use this demonstrator program to define the technology, but also to create the path for a development and production program that will realize new technologies. If we want to do that, it could be a political and strategic question to build three examples of the same demonstrator. Because we see there is a great entry into the population. It is also not easy to explain. But it is a question of financing. Will they be different? No, they will be the same prototype with the same specification, perhaps produced three times. That is something we must avoid: this fragmentation. Today I have not seen an interest from industry or the nations to repeat errors made in the past.

I think everyone, the nations and the dossier, agree. We have already learned that fragmentation does not work. The idea of SCAF is to work against fragmentation, to create a platform that is truly European, that represents a common solution. Of course, that was also the case for the A400M. There we saw we had completely different parachutes, even the parachutes are different. That is not something that works if we want to work together. It is not an efficient solution. I am sure we will have one aircraft. The discussion, and I think there was confusion in Germany, because there was confusion about whether we will have a second demonstrator based on the Rafael? Of course, that is not a question. Just to explain how the specifications work: we developed the architecture together between the partners. The chiefs of the air forces together chose not us, the clients. They chose five? They are discussing the specifications. Each can evaluate which is the best for their demand, and they will choose which specifications and which attitude they want. It will not be a Rafale, it will not be a Eurofighter, because it was clearly said that the three states are not ready to pay billions of euros for a Rafale plus. We want to use this demonstrator program to define the technology, but also to create the path for a development and production program that will realize new technologies. If we want to do that, it could be a political and strategic question to build three examples of the same demonstrator. Because we see there is a great entry into the population. It is also not easy to explain. But it is a question of financing. Will they be different? No, they will be the same prototype with the same specification, perhaps produced three times. That is something we must avoid: this fragmentation. Today I have not seen an interest from industry or the nations to repeat errors made in the past.

I know that I have no problem in our discussions with Eric Trappier. The balance has changed because of Spain, but as you know, it was not a decision of industry to integrate the Spanish; it was a national decision between France and Germany. Now industry must adapt. Of course, if we look at how we started in 2018, when the high-level contract was signed between the two ministries, we signed at the same time the industrial cooperation document between Dassault and Airbus. It was signed by Eric Trappier and me, and it was well defined: a 50-50 share, Dassault would do the Next Generation Fighter (NGF), and we would do the system of systems. But with the integration of Spain, the context has changed. We have to adapt. It was not the joy of Airbus or Dassault. Now we need to find a solution that corresponds to the necessities of the three countries because we have exploitation behind. How can we realize this in cooperation? I understand completely that if we start from where we began, it is very difficult to accept and now realize a common solution. But I believe we have good discussions with all respects for the positions. I think we can create a common solution, and we will continue to work on it from today. Because as I said before, for us there is no plan B. We want it to work. We will make compromises from both sides, from all three sides, because otherwise we don't have a project. But is it ultimately good for France? I am 100% sure we will not do stupid things. We will not realize a project unless all three countries and all industries agree. We have confidence that we can realize this project. Don't forget, this is not a decision for a small project; it is a decision for decades. We will be together for the demonstrator, and afterwards for production until 2040. That means we will work together for decades. I will be in retirement when it becomes operational. I think it is normal that we still have discussions because we have done something in a very short time. Of course, there are still open questions, but I am very optimistic we will find solutions. For the A400M, I think the difference is what we are doing differently now. We have considered all the lessons. We made many errors in the process. We accepted very demanding specifications. We accepted to develop a European engine not with one supplier but with four. We accepted subcontractors, including an Italian one responsible for the most complex gearbox in the world. We learned from that. We are also doing demonstrators to de-risk technology and ensure we are ready. We started with two countries with very strict specifications, and now with the integration of Spain, they are also very strict with specifications to avoid the problems we had with specifications that nobody could realize. I believe with the demonstrator we will demonstrate that we are capable, and then we will do development with agile planning, with rolling waves, to avoid errors made in other programs. I am 100% sure we have the right partners at the table, and we will realize this project with all the expectations of the three clients but also with reasonable specifications.

Yes, I will answer that. I know that Eric Trappier said we will not do it at all costs. But no one has ever accepted to do something at all costs. There can be things that are essential that we do not do at any cost. Thank you, senators. There are things that are essential, and I said in my introduction: not under any conditions, neither in France, nor in Spain, nor in Germany. So it is up to us to ensure that if things are essential, the conditions are met. So the question is not to do something at any cost; the question is to find the conditions so that something essential can be realized.

No, we accept the Dassault leadership. There is no doubt. I don't know where that comes from. I think it's also on Paris that we read many things because we don't really have the vision of you seeing each other, and it's an excellent thing that you are here. The work packages at 50% are shared, joint, so there is no leader. And 50% with a distribution of one third each. It seems that there was some contestation on the third of these? I can explain perhaps in more detail. We talk about six, not NGF, we talk about about 200 work packages. There is a practice that there are coordinators who coordinate what each does and how to realize the packages in time. There is a budget passed by the three countries. Normally, the exploitation of Spain and Germany and that we wait too much present in each? That means for the packages that are joint, can we have a compromise? Yes, that was exactly related to what I explained at the beginning. Germany and Spain want to have confidence that we work as partners, and that if there is a decision on architecture and systems to make, we don't forget the investments made in Spain and Germany over decades before. That is perhaps also the complexity of how projects have been executed in France or Germany. There is a difference, that's clear. But just to explain: if we look at what Eric Trappier emphasized, he wants to be sure to be the master of the project. That should not be a problem because the way Germany always blocks decisions? Yes, I know. We are looking at how we can give more confidence that it's not another objective. If we enter into penalties, it's 33% for Spain and 30-60? That would mean we pay 66% of penalties. We don't want to do that. Secondly, we are creating rules to show Dassault that we accept the idea and we don't want to enter into escalation. It is also our part. We need rules now. If we are under time pressure because there is a deadline to meet, a budget to respect, how can we avoid that the Dassault team only takes solutions they know without looking at other options that exist in Spain or Germany because it takes time? That is something we need to show there are governance mechanisms. There was an excellent question from Bruno earlier about the A400M. I made a good demonstration of the experience you have acquired and the errors not to repeat. I have the feeling, and I don't want to be misunderstood, that each of the three countries says: 'My state has participated in innovation in my company by financing a number of innovations, so it is out of the question that we abandon these innovations.' We saw on the A400M, I won't repeat the history, but there were a number of technology lots that were not necessarily the best. Isn't the interest rather to seek the best technology in the country rather than to seek technologies at all costs, which ultimately will not be the best? We have to make compromises, as always, because we have a budget to respect, a time to respect. But we also have to be realistic about what the best technological options are. We have exactly the same question in the A400M. We did it a bit differently: we did contracting for the architecture definition, and then we didn't know. But here we must ensure that the technological options that exist are considered, they are the best, they are realized within the defined budget. There are budget constraints, and we have to make compromises. Yes, I am very optimistic that the engineers working between the teams speak the same language and we are advancing well. We need to define the mechanisms for how much time we have to do analyses and make a decision. If it is done transparently, I don't think we will have a problem. We have to respect time and budget, that will be hard, that's clear. But we must avoid emotional escalation because an industry feels that we have lost a solution that was good.