(Bloomberg) -- Japan, the UK and Italy are close to announcing a political agreement on a new jet fighter, joining forces to fund a multi-billion dollar program capable of competing with the next generation of warplanes from the US and elsewhere.
The accord on the project, to be called the Global Combat Air Program, is expected next week, according to people familiar with the issue. Parties involved had said in July, when Japan’s likely involvement was announced, that the aim was to seal an agreement by year-end. The date could slip to later in the month, one of the people said.
Britain and Italy have been developing the Tempest warplane to rival France and Germany’s so-called Future Combat Air System plane for some years. London and Rome have been working on bringing Japan into the group, with Sweden another prospective partner.
Joining a major defense development project with a partner other than the US is a break with tradition for Japan, which is in the process of bolstering its military budget and upgrading its national security strategy after being spooked by Russia’s attack on Ukraine. The move is partly prompted by the US’s reluctance to share technology.
Adding Japan to the British-Italian alliance that’s working on the Tempest fighter plane would bring an international dimension to what’s been an all-European project, potentially aiding worldwide sales, while bolstering funding after Germany chose to partner with France on the rival aircraft.
Further agreements will be needed next year to iron out the structure of the program developed by Japan, the UK and Italy, as well as division of labor and ownership rights, two of the people said. Participants are currently working on a split with each country taking a third of ownership, but negotiations are ongoing and the stakes have not yet been finalized.
The main contractors are Mitsubishi Heavy Industries for Japan, BAE Systems Plc for the UK, and Leonardo SpA for Italy. Saab AB of Sweden, which currently makes the Gripen fighter, is regarded as a further potential recruit.
The full extent of financial investments by each side has yet to be finalized, one of the people said. Previous reports have suggested the UK has pledged to invest more than £2 billion over the next three years, while Italy committed £2 billion over several years as part of defense spending plans agreed last year.
A BAE spokesperson said that alongside its industry allies, the company continues to support government-led discussions with international partners as they explore potential options on Tempest. A spokesperson for Leonardo declined to comment. Mitsubishi could not be immediately reached for comment.
The Franco-German program has taken a step forward in the past few days after a long hiatus, with Berlin and Paris reaching an industrial and political agreement on how to move forward with a demonstrator aircraft. Germany has previously been a member of the Eurofighter consortium with BAE and Leonardo.
What’s not apparent is how the Tempest plan and Japan’s F-X program can be integrated, though BAE said in July that a number of options were being examined and that early cooperation with Mitsubishi Heavy Industries, which is leading F-X development, has been very positive.
Both fighters will take many years of development, with service entry for the Tempest pitched as somewhere around 2035, the FCAS about five years later.
--With assistance from Alex Wickham and Christopher Jasper.
©2022 Bloomberg L.P.
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