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Japanese choices in aviation market reveal overreliance on U.S.

by Jochen Legewie

For decades, Japan’s military partner of choice has been the United States. The reasons are well known: The influence of the Occupation after World War II and the adoption of an American-style Constitution that put strong restrictions on Japan’s ability to maintain any kind of martial force.

Hand in hand with this, Japan has come to depend heavily on the U.S. for protection and support in foreign affairs. Indeed, it is difficult to imagine closer allies in military terms than Japan and the United States. Despite some opposition, this alliance has served Japan well over the past 60 years.

Recently, however, the Defense Agency was upgraded to a full-fledged ministry. This long overdue step in recognizing the size and status of Japan’s modern military signals the rise of a more independent Japan.

Despite this act of “growing up,” Japan’s dependence on the U.S. still seems to carry the day. One case in point is the Air Self-Defense Force.

The ASDF has traditionally relied on U.S. aircraft, and a look at its inventory shows that, with the exception of one British-supplied search-and-rescue plane, all its aircraft, including F-15 Eagles, are “Made in U.S.A.” or built in Japan using U.S. technology.

But one plane in particular, the old F-4 Phantom, is still in use and long overdue for replacement. Japan’s preferred purchase would be the next-generation F-22 Raptor, a stealth jet fighter produced by Lockheed Martin that represents the latest generation of radar-evading technology.

But there’s an obstacle to the deal: Congress has vetoed export of the F-22 to keep the technology within the U.S., and it remains to be seen whether the ban will be lifted in the future. This prompted Japan to postpone its purchase plans until its next five-year defense buildup program starting in fiscal 2010, although it originally planned to buy the first seven planes in the current buildup phase. In other words, it is hoping for the ban to be lifted.

What is missing to many observers’ eyes is an in-depth examination of alternatives. Actually, the Defense Ministry has short-listed six replacement planes, including the French Rafale and the Eurofighter Typhoon, which is built by a consortium of manufacturers from four European countries.

However, it seems these alternatives are not being taken seriously even though they offer some clear benefits over the F-22. The Eurofighter, for example, is not only readily available but also costs half the price of the F-22 and is cheaper to maintain.

More importantly, the Eurofighter doesn’t take the black-box approach of the F-22 but offers technology transfer. It provides Japanese industry a significant package of work, including the potential for licensed production.

A similar situation exists in civil aviation, where a bias toward U.S. products also prevails. European aircraft builder Airbus is a good example.

Airbus is the global market leader in planes with over 100 seats and had a commanding 54 percent share of the market for these types of aircraft as of 2008. Globally, the company is running neck and neck with America’s Boeing but generally has the upper hand.

Except in Japan, that is.

In Japan, Airbus only has a market share of 4 percent, despite high hopes several years ago of capturing half the domestic market for large planes. Indeed, All Nippon Airways recently postponed its decision on ordering Airbus’ new flagship, the A380, although it continues to be frustrated by Boeing’s inability to deliver the 787 Dreamliner on time.

So it appears the U.S. stranglehold on military planes also extends to the peaceful end of the aviation spectrum. The favoritism is thick and even appears to be supported by elements of the Japanese media.

This favoritism was evident at a BAE Systems press conference last month in Tokyo. BAE, the British member of the Eurofighter consortium, held the conference to explain the advantages the Eurofighter has over its rivals. But on the next day, only the daily Asahi Shimbun, the Nikkei and The Japan Times reported on the event.

At the same time, the Yomiuri Shimbun, Japan’s largest newspaper in terms of circulation, ran an editorial June 10 supporting a proposal to relax the rules on Japanese arms exports. The daily argued that Japan should have joined the U.S.-led consortium for development of the F-35 Lightning, another replacement candidate on the ASDF’s short list.

The editorial went on to urge the Japanese government to grow up and review its decade-old principles for arms exports. Pointing to the deteriorating finances of the Japanese defense industry, the Yomiuri stated: “The security of the nation could be undermined if specialized companies and skilled workers involved in the manufacturing of primary weapons are no longer available in Japan and the country has to rely on other nations.”

What is striking about this argument is that the Yomiuri is clearly ignoring the opportunity being presented by the Eurofighter proposal, which offers a solution to the very problem it describes. Indeed, the editorial makes no reference at all to the European alternative.

As a European who favors free and transparent markets, the author believes that the Japanese media should do its utmost to help the defense sector — and the public — understand what options are available and to select from within these options the best solutions to its aviation needs.

Japan is strongly lobbying for an economic partnership agreement with the EU. Opening its aviation markets could be a good first step in convincing it that Japan is ready and willing to offer reciprocal benefits to both sides.

Jochen Legewie is president of German communications consultancy CNC Japan K.K.