UK MoD gives £30Bn discount to USMC
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Thread Starter
UK MoD gives ???? discount to USMC
Even allowing for the usual journalistic license of the Mail, this story of selling 72 Harriers to the USMC for £112M, shortly after a £600M upgrade appears to be the kind of Government thinking that gets us where we are today. Maybe there's a logical explanation for why you would give someone such a large discount...
MoD tried to cover up selling Harrier jets to Americans for knock-down price of £112m after £600m refit | Mail Online
MoD tried to cover up selling Harrier jets to Americans for knock-down price of £112m after £600m refit | Mail Online
The Ministry of Defence tried to cover up the fact its Harrier jump-jets were sold to the Americans for a knock-down price of £112million shortly after a £600million refit.
Secret correspondence seen by The Mail on Sunday shows that senior defence officials knew the move was likely to prove controversial, and they urged officials to stonewall awkward questions from the media.
Secret correspondence seen by The Mail on Sunday shows that senior defence officials knew the move was likely to prove controversial, and they urged officials to stonewall awkward questions from the media.
Last edited by Two's in; 25th Mar 2012 at 20:13. Reason: schoolboy maths
I'm not sure what the issue is here.
You update a fleet because you expect it to be in service for some time - simples!
Plans change, a defence review comes along and scraps that fleet - not ideal, but things like this happen, and the bean counters view of money is that once its spent (i.e. the money on the update) then that's history.
You now have a fleet of aircraft you no longer want. Do you:
a. Put them in storage for a rainy day - this actually costs you money, under the wonderful scheme introduced by a Mr G Brown.
b. Scrap them for pennies.
c. Sell them for what you can get - in this case £112M, which is at least more than pennies.
While option c might not go down too well with the tabloid readers, it is still preferable to options a and b!! A case of the best of the lesser of two (three) weevils!!
Edited to add that the article states that the £600M was spent over the last 5-10 years, when no doubt the fleet was thought to have a long term life!
You update a fleet because you expect it to be in service for some time - simples!
Plans change, a defence review comes along and scraps that fleet - not ideal, but things like this happen, and the bean counters view of money is that once its spent (i.e. the money on the update) then that's history.
You now have a fleet of aircraft you no longer want. Do you:
a. Put them in storage for a rainy day - this actually costs you money, under the wonderful scheme introduced by a Mr G Brown.
b. Scrap them for pennies.
c. Sell them for what you can get - in this case £112M, which is at least more than pennies.
While option c might not go down too well with the tabloid readers, it is still preferable to options a and b!! A case of the best of the lesser of two (three) weevils!!
Edited to add that the article states that the £600M was spent over the last 5-10 years, when no doubt the fleet was thought to have a long term life!
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Two's In
Thirty Billion Pounds, WTF?
From the Mail :
So.... not exactly "shortly after spending 600 million"
As for how any Harrier might fetch 112 Million quid, well, that's not much of a bargain for the Marine Corps.
Lastly, how did you lose two aircraft between reading the story in the Mail and typing it here?
Even allowing for the usual journalistic license of the Mail, this story of selling 72 Harriers to the USMC for £112M each, shortly after a £600M upgrade appears to be the kind of Government thinking that gets us where we are today. Maybe there's a logical explanation for why you would give someone a £30Bn discount...
From the Mail :
the aircraft were upgraded in the last ten years at a cost of £500million and a weapons system upgrade was carried out in the last five years at a cost of £100million.l
As for how any Harrier might fetch 112 Million quid, well, that's not much of a bargain for the Marine Corps.
Lastly, how did you lose two aircraft between reading the story in the Mail and typing it here?
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Thread Starter
It's not only the DM allowed journalistic license on the interwebs you know. OK, disregarding my schoolboy maths error, the only "issue" here for me (as a taxpayer) is where is the value for money? We can change any defence policy we choose on a whim, and have done, but having spent the money should we not try and get a reasonable and fair price? If the aircraft are upgraded isn't the price also upgraded?
I'll round down my thread title by an order of magnitude and a few billion and await a job offer from George Osborne. Thank you all for paying attention, I shall endeavor to do the same.
I'll round down my thread title by an order of magnitude and a few billion and await a job offer from George Osborne. Thank you all for paying attention, I shall endeavor to do the same.
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Biggus is correct. We got the best price anyone was prepared to offer. If we had held out for more they would still be sitting in expensive storage waiting to be scrapped. Damn shame all the same.
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Concur with Biggus. Once you decided not to use it, spending money on storage is an additional expense for nil return. We were never going to get top $ for Harrier as the number of potential buyers were limited, so a competitive auction unlikely. All the more so as I understand that there was significant US technology incorporated which they would have had issues with the UK transferring to other foreign buyers.
So we were not in a strong selling position as the US was probably the only viable customer.
If you turn the story around, so that we had decided the US were getting too much of a good deal, but we couldn't sell elsewhere because of technology transfer issues, then the Mail's story in two year's time would have gone along the lines of:
'£millions spent on preserving Harriers to stand idle for the last two years! We're paying to keep these airframes in good condition despite the fact they will never be used again. A golden opportunity to sell them to the US was missed two years ago, and relieve us of the burden and at the same time receive a cash boost. An MoD spokesman said the price offered by the American's 'did not reflect a fair value for the airframes given upgrade expenditure which had been invested in them'. And so we spend more taxpayers' money on keeping these planes in controlled conditions until we eventually sell them for scrap and get peanuts in return!'
Any jobs going for a defence correspondent at the DM?
So we were not in a strong selling position as the US was probably the only viable customer.
If you turn the story around, so that we had decided the US were getting too much of a good deal, but we couldn't sell elsewhere because of technology transfer issues, then the Mail's story in two year's time would have gone along the lines of:
'£millions spent on preserving Harriers to stand idle for the last two years! We're paying to keep these airframes in good condition despite the fact they will never be used again. A golden opportunity to sell them to the US was missed two years ago, and relieve us of the burden and at the same time receive a cash boost. An MoD spokesman said the price offered by the American's 'did not reflect a fair value for the airframes given upgrade expenditure which had been invested in them'. And so we spend more taxpayers' money on keeping these planes in controlled conditions until we eventually sell them for scrap and get peanuts in return!'
Any jobs going for a defence correspondent at the DM?
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If you turn the story around, so that we had decided the US were getting too much of a good deal, but we couldn't sell elsewhere because of technology transfer issues, then the Mail's story in two year's time would have gone along the lines of:
'£millions spent on preserving Harriers to stand idle for the last two years! We're paying to keep these airframes in good condition despite the fact they will never be used again. A golden opportunity to sell them to the US was missed two years ago, and relieve us of the burden and at the same time receive a cash boost. An MoD spokesman said the price offered by the American's 'did not reflect a fair value for the airframes given upgrade expenditure which had been invested in them'. And so we spend more taxpayers' money on keeping these planes in controlled conditions until we eventually sell them for scrap and get peanuts in return!'
'£millions spent on preserving Harriers to stand idle for the last two years! We're paying to keep these airframes in good condition despite the fact they will never be used again. A golden opportunity to sell them to the US was missed two years ago, and relieve us of the burden and at the same time receive a cash boost. An MoD spokesman said the price offered by the American's 'did not reflect a fair value for the airframes given upgrade expenditure which had been invested in them'. And so we spend more taxpayers' money on keeping these planes in controlled conditions until we eventually sell them for scrap and get peanuts in return!'
Pious,
pretty much a bellend suggestion.
The folk who have C130 and Chinooks to sell want hard cash, not 2nd hand jet spares...
Price was a goodun.
pretty much a bellend suggestion.
The folk who have C130 and Chinooks to sell want hard cash, not 2nd hand jet spares...
Price was a goodun.
To commit money to the "Mid Life Upgrade" quite a few very senior people would have had to sign up to there being five years useful life left in the aircraft, post MLU completion. That's a basic Treasury rule - I imagine the projected life would have been much more.
That being so, the Services, and those who signed, have every right to feel let down because the decision to scrap the aircraft wouldn't have been so sudden that some money couldn't have been saved. I suspect there are those who had been planning this for years and knew very well that the £600M was to be wasted.
Not entirely dissimilar from the RAF supplier's decision to chop certain Sea Harrier capability in the early 90s, by the simple expedient of scrapping the necessary kit without telling the RN. I always thought that the beginning of the end for SHAR, because the RN (their Aircraft Support Executive) rolled over and didn't complain. But thereafter they could not claim to have that capability, which weakened any Board Submission for funding. (Not wishing to start a light/dark bunfight here - the same AMSO policy decision rendered Chinook, Nimrod, C130 etc unairworthy - you don't have to take my word, see the RAF's own various ART reports - so, arguably, they suffered more from their own Chief Engineer's decisions).
You always get back to that AMSO policy that wasted Billions. It was the first determined attempt to create the "Black Hole" we have today.
That being so, the Services, and those who signed, have every right to feel let down because the decision to scrap the aircraft wouldn't have been so sudden that some money couldn't have been saved. I suspect there are those who had been planning this for years and knew very well that the £600M was to be wasted.
Not entirely dissimilar from the RAF supplier's decision to chop certain Sea Harrier capability in the early 90s, by the simple expedient of scrapping the necessary kit without telling the RN. I always thought that the beginning of the end for SHAR, because the RN (their Aircraft Support Executive) rolled over and didn't complain. But thereafter they could not claim to have that capability, which weakened any Board Submission for funding. (Not wishing to start a light/dark bunfight here - the same AMSO policy decision rendered Chinook, Nimrod, C130 etc unairworthy - you don't have to take my word, see the RAF's own various ART reports - so, arguably, they suffered more from their own Chief Engineer's decisions).
You always get back to that AMSO policy that wasted Billions. It was the first determined attempt to create the "Black Hole" we have today.
tuc:
Not only Billions, but lives as well. At least 62 of which were lost in Airworthiness related Military Air Accidents that stemmed directly from that very same AMSO Policy change.
You always get back to that AMSO policy that wasted Billions.
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How much did we really pay in total for those 14 Chinook helicopters, was it in excess of £1bn? We have the Americans that are desperate for more Harrier jets to either act as replacements for aircraft or in other cases to use as spares. The huge problem they face is one of availability. Are there readily available new spare parts or replacement aircraft to keep the US fleet operational?
To add to the woes of the USMC the replacement for the Harrier has significant issues which means the current aircraft will have to remain in service far longer than planned. Are they possibly desperate for our Harriers just as we are\were desperate for their Chinook. 14 Chinook plus possibly some spares for £1bn and we sell the Harrier jets plus spare parts for just pennies.
I do not accept the US is the only user of this aircraft, and are we fooling ourselves when we claim we will get preferential treatment when it comes to buying hardware from the USA if we 'give' them our Harrier fleet? We are dealing with private companies that are answerable to shareholders regarding profit margins and they are certainly not going to give equipment away.
The American government can veto military sales but have they a more co-operative ally? Have they anyone that will stand alongside them as quickly and as firmly as Great Britain? The two issues should not be put into the same basket and we should NOT give away an asset that was in my opinion worth far more than what the USA paid just to make sure we do not upset our ally.
Yes it is daft to horde unwanted spare parts or aircraft in hangers when there is no chance of either using them, or selling these aircraft but that was NEVER going to be the case with the Harrier, we were and still are FULLY aware of the ongoing issues with the 35B and every year of delay is a year longer the USMC will have to operate their Harrier fleet.
My own thoughts are that a shed load of brand new spares for the Harrier is possibly a mini gold mine whose value is very quickly going to soar. To have hangers full of brand new spares is a gold mine of unimaginable wealth. To have refurbished, low mileage aircraft as well as these spares is something that needs serious thought and definitely should not be rushed in to before agreeing any sale. I do not have a degree in economics so I will ask, 'Are we certain the selling of our aircraft was good value?' The MoD must surely have a duty to ensure we ALWAYS get good value for our money and no matter what anyone writes here, I am not convinced this disposal got the best possible return, in fact may I respectfully suggest we got pennies for something that was worth pounds.
To add to the woes of the USMC the replacement for the Harrier has significant issues which means the current aircraft will have to remain in service far longer than planned. Are they possibly desperate for our Harriers just as we are\were desperate for their Chinook. 14 Chinook plus possibly some spares for £1bn and we sell the Harrier jets plus spare parts for just pennies.
I do not accept the US is the only user of this aircraft, and are we fooling ourselves when we claim we will get preferential treatment when it comes to buying hardware from the USA if we 'give' them our Harrier fleet? We are dealing with private companies that are answerable to shareholders regarding profit margins and they are certainly not going to give equipment away.
The American government can veto military sales but have they a more co-operative ally? Have they anyone that will stand alongside them as quickly and as firmly as Great Britain? The two issues should not be put into the same basket and we should NOT give away an asset that was in my opinion worth far more than what the USA paid just to make sure we do not upset our ally.
Yes it is daft to horde unwanted spare parts or aircraft in hangers when there is no chance of either using them, or selling these aircraft but that was NEVER going to be the case with the Harrier, we were and still are FULLY aware of the ongoing issues with the 35B and every year of delay is a year longer the USMC will have to operate their Harrier fleet.
My own thoughts are that a shed load of brand new spares for the Harrier is possibly a mini gold mine whose value is very quickly going to soar. To have hangers full of brand new spares is a gold mine of unimaginable wealth. To have refurbished, low mileage aircraft as well as these spares is something that needs serious thought and definitely should not be rushed in to before agreeing any sale. I do not have a degree in economics so I will ask, 'Are we certain the selling of our aircraft was good value?' The MoD must surely have a duty to ensure we ALWAYS get good value for our money and no matter what anyone writes here, I am not convinced this disposal got the best possible return, in fact may I respectfully suggest we got pennies for something that was worth pounds.
The only other users of the AV8B are the Spanish & Italian navies. Neither of which are flush with cash, in fact the exact opposite. As the aircraft is a joint US/UK design, export control issues prevent sale to anyone the UK or US don't like.
The unpalatable truth is that we got for them what the market was prepared to pay. Do we (the UK) think they were worth more? Subjectively, yes, objectively, no. As others have pointed out, due to the vagaries of Resource Account Budgetting as introducted by The Great Financial Genius, holding on to them actually costs money - money that the MoD doesn't have. You can argue the toss as to whether it is real money until the cows come home, but that will not prevent your budget taking a hit.
Lets not have this thread turn into another "Decision to axe Harrier is bonkers..." thread with no end. It's done, all have to live with the consequences.
The unpalatable truth is that we got for them what the market was prepared to pay. Do we (the UK) think they were worth more? Subjectively, yes, objectively, no. As others have pointed out, due to the vagaries of Resource Account Budgetting as introducted by The Great Financial Genius, holding on to them actually costs money - money that the MoD doesn't have. You can argue the toss as to whether it is real money until the cows come home, but that will not prevent your budget taking a hit.
Lets not have this thread turn into another "Decision to axe Harrier is bonkers..." thread with no end. It's done, all have to live with the consequences.
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I hope Evalu8ter doesn't see this
glojo said
It's clear that you don't know much about the UK Chinook programme. The UK version (Mk6) is very, very, very different to the US Army CH-47F. Furthermore, the UK is buying the aircraft from Boeing not the US Government, the spares will be included within the UK TLCS contract - but I'm sure that this will cost yet more money. I do hope Evalu8ter doesn't read your post, because he would really enjoy 'educating you' about the UK Chinook programme.
CWD
Are they possibly desperate for our Harriers just as we are\were desperate for their Chinook. 14 Chinook plus possibly some spares for £1bn and we sell the Harrier jets plus spare parts for just pennies.
CWD
Last edited by Canadian WokkaDoctor; 27th Mar 2012 at 00:17. Reason: typo
Toward the end of the SHAR Mk1 > Mk2 conversion programme, AMSO initiated a 15 year spares buy for Mk1-peculiar spares.
As the funding was allocated to "SHAR" (whatever Mark it may be), this left Mk2 potless, explaining most spares shortages throughout its short life. I wonder if these unused spares are still around. Must be worth a few bob.
Again, not just a pop at AMSO (they fielded a 2 Star - DGSM - to jump on the PE staff who highlighted the deliberate waste to auditors). The same ASE **** who agreed to avionics being scrapped (see previous post) agreed this was a good way to spend Mk2 money, and didn't say a word.
As they say, take aim at foot, volley fire. Sort out failures such as this and watch capability grow.
As the funding was allocated to "SHAR" (whatever Mark it may be), this left Mk2 potless, explaining most spares shortages throughout its short life. I wonder if these unused spares are still around. Must be worth a few bob.
Again, not just a pop at AMSO (they fielded a 2 Star - DGSM - to jump on the PE staff who highlighted the deliberate waste to auditors). The same ASE **** who agreed to avionics being scrapped (see previous post) agreed this was a good way to spend Mk2 money, and didn't say a word.
As they say, take aim at foot, volley fire. Sort out failures such as this and watch capability grow.
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Hi CWD,
I was most certainly NOT in any way having a 'pop' at any other program including that of the Chinook, plus I also made it clear we purchase aircraft from private companies and NOT the US government. Are you possibly reading something that I have not wrote or even suggested?
Please do not assume I am being critical of any other purchase deals, I am simply critical of the way we have disposed of the Harrier and YES just like any other reasonable person I fully accept the age of the UK Harrier is over.
Not a Boffin. Does India still have Harriers? I accept the US have the AV8B but I was not aware we ever operated that version of the aircraft.
Bottom line to my questions though is that if we got the best price possible for those new spares and aircraft then so be it..
I was most certainly NOT in any way having a 'pop' at any other program including that of the Chinook, plus I also made it clear we purchase aircraft from private companies and NOT the US government. Are you possibly reading something that I have not wrote or even suggested?
Originally Posted by glojo
We are dealing with private companies that are answerable to shareholders
Not a Boffin. Does India still have Harriers? I accept the US have the AV8B but I was not aware we ever operated that version of the aircraft.
Bottom line to my questions though is that if we got the best price possible for those new spares and aircraft then so be it..
Glojo
The Indians retain a handful of Sea Harriers. Unfortunately, these are completely different to the GR7/GR9 which is the Harrier II (or AV8B) design.
One of the reasons the SHAR was disposed of was that it was a different airframe to the GR5 (as was), latterly GR7/GR9 Harrier and that there was only enough bunce to do one airframe upgrade to Pegasus (107?).
The Indians would need a fleet air defender, which GR7/GR9 ain't. Upgrading the aircraft with the APG65 radar (which is what the USMC, Spanish and Italian aircraft have) for about another 6 years of Hermes would be a very expensive way of doing things.
And that's if the latest Pegasus and some of the avionics got clearance to India. We wouldn't give them Blue Vixen when they enquired about our SHARs.
The Indians retain a handful of Sea Harriers. Unfortunately, these are completely different to the GR7/GR9 which is the Harrier II (or AV8B) design.
One of the reasons the SHAR was disposed of was that it was a different airframe to the GR5 (as was), latterly GR7/GR9 Harrier and that there was only enough bunce to do one airframe upgrade to Pegasus (107?).
The Indians would need a fleet air defender, which GR7/GR9 ain't. Upgrading the aircraft with the APG65 radar (which is what the USMC, Spanish and Italian aircraft have) for about another 6 years of Hermes would be a very expensive way of doing things.
And that's if the latest Pegasus and some of the avionics got clearance to India. We wouldn't give them Blue Vixen when they enquired about our SHARs.