Foreign Relations of the United States, 1969–1976, Volume E-15, Part 2, Documents on Western Europe, 1973–1976, Second, Revised Edition

66. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Ford¹

Washington, February 17, 1975.

SUBJECT

• Status of F–104 Replacement Issue

Summary

When Denmark, the Netherlands, Norway and Belgium formed a consortium nearly a year ago to discuss a replacement for the aging F–104 Starfighter, its proponents hoped it would encourage the participants to select the same aircraft, thus achieving standardization in an area of defense vital to NATO. Instead, the replacement issue has created political tensions within the four governments and between them, and has led to Franco-American competition—with political overtones—for the lucrative contracts. In fact, the French have applied considerable pressure on the four countries to the effect that, as Europeans, they are obliged to purchase the French Mirage. In view of these political complications, the prospect that all four will choose the same plane is more uncertain than ever.

Each country is beset by conflicting economic, political and military pressures that are increasingly difficult to reconcile or balance as the time for a decision approaches. The most recent soundings indicate that the Belgians and the Dutch remain undecided but are leaning slightly toward the Mirage for political reasons, the Danes will choose the US F–16—if they decide to purchase a replacement aircraft before May, and only Norway is firmly committed to purchasing a U.S. fighter. The following paragraphs review the conflicting pressures on the four governments in making their decision and assess the prospects for choice of an American plane in each country.

The Pressures

The four countries presently are caught in a political-economic dilemma over their replacement choice. They must consider the following factors:

—The French are offering the four a chance to help create a European military aircraft industry, while contending that if the U.S. plane is chosen, the European companies will be nothing more than subcontractors.

—At the same time, the consortium recognizes that selecting the French fighter could cut them off from American technology, eventually facing them with the development of a superior American aircraft with which the European industry could not compete.

—The French are offering a government guarantee of a ceiling on price increases.

—The French argue that U.S. failure to guarantee a unit price could easily result in cost overruns, and that when the rate of inflation is considered, the cost of the F–16 will be considerably higher than that of the Mirage. (This argument was strengthened by Air Force Assistant Secretary Shrontz’ recent statement that the production price for the F–16 may rise to over $6 million per plane.)

—Air Force officials in all the countries continue to favor General Dynamics’ F–16 over the Mirage F1/E.

The consortium’s “steering committee”—a group of experts drawn from the military and defense establishments of each country—submitted its report to the respective Defense Ministers on February 1. The report avoided a recommendation and provided only comparative data—reportedly favorable to the U.S. competitor—on technical and economic-offset aspects of the sales offers. On February 17, the Defense Ministers will meet in Brussels for perhaps the final meeting of the consortium. After considering the steering committee’s report, at Dutch and Belgian behest they will probably suggest further study before making a final recommendation to the national governments.

The Current Situation

The present leanings of the four governments are as follows:

Belgium and the Netherlands: The Belgians attach considerable importance to having the same aircraft as the Dutch. For that reason, the foreign ministers and defense ministers of both countries met earlier this week to discuss the F–104 replacement issue. A deadlock developed, with both defense ministers pressing for selection of the Mirage and both foreign ministers preferring the U.S. plane. They reportedly did agree to explore further price guarantees on the competing aircraft and to request a further delay at the consortium Defense Ministers’ meeting on February 17 before the group makes a final recommendation to the national governments.

Meanwhile, there are reports that the Belgian ministries of defense, foreign affairs and economic affairs have prepared a joint paper for the Prime Minister analyzing the February 1 consortium report on the F–16 and the Mirage, but apparently not recommending any position. The military superiority and lower cost of the F–16 apparently emerge clearly from the report. The embassy in Brussels believes that no decision has yet been made and that the question of a viable European aircraft industry will play an important and perhaps decisive role. The latter point is reinforced by other reports that at least three of the five Belgian cabinet ministers support the Mirage, primarily for political reasons.

No firm consensus has developed on the replacement question in The Hague, with the cabinet remaining divided over the political consequences of choosing between a French and a U.S. plane. As confirmed at the bilateral meeting this week with the Belgians, Defense Minister Vredeling strongly favors buying the Mirage to encourage development of a European aircraft industry and for European political reasons, while Foreign Minister van der Stoel favors a U.S. plane. A number of reports point to the fact that the Netherlands’ final decision will be made on political grounds and will be strongly influenced, if not determined by Prime Minister den Uyl’s position. Den Uyl is sensitive to sentiment in his Labor Party against selection of a U.S. plane. Also, growing public annoyance at U.S. bargaining tactics in the KLM-Pan Am dispute has become another unsettling political factor. These considerations, together with the Dutch desire not to offend the U.S., lend weight to reports that a compromise might emerge in which the Dutch would buy the less expensive F–5E from the U.S. and a number of the new Mirages from the French.

If the Dutch Government does not make a decision by March 1, then the choice will be delayed until April, after the Labor Party conference. Such a delay, for political reasons, would be disadvantageous to the U.S.

Denmark: With Prime Minister Hartling’s resignation on January 28, and continuing political instability in Copenhagen, the Danes have major domestic political problems to sort out before a decision can be made. In fact, many leading political figures in Denmark are having second thoughts about buying any replacement aircraft. According to embassy sources, however, the extra-parliamentary Defense Committee (comprising the four parties backing the Defense Agreement) met on February 10 and decided to take the position at the consortium meeting on February 17 that “if the Danish Government and Parliament should decide to buy a replacement aircraft before the May deadline, it should be the F–16.” The decision would seem to rule out all other contending aircraft until May, but does not commit the Danes to buy a replacement. On the latter question, the Conservative and Liberal Parties are in favor of an early decision to buy, the Radicals are opposed, and the Social Democrats’ position is uncertain. U.S. prospects should be enhanced somewhat if Hartling is successful in again forming a minority government.

Norway: The Norwegians have favored a U.S. aircraft from the beginning. Key members of the Defense Minister’s staff have always opposed consideration of the Mirage for Norway. The Norwegians apparently feel that a U.S. aircraft is the best candidate for the defense of Norway’s extensive borders and the response to the U.S. Air Force’s choice of the F–16 has been enthusiastic. A decision can probably be expected by mid-March; parliamentary approval for purchase of the U.S. aircraft is not expected to be prolonged or difficult.

1. Summary: Kissinger reported on the status of the F–104 replacement issue.

   Source: Ford Library, National Security Adviser, Presidential Country Files for Europe and Canada, Box 1, Europe—General (1). Secret. Sent for information. Scowcroft initialed the memorandum on Kissinger’s behalf. A stamped notation on the memorandum indicates the President saw it. Ford initialed the memorandum.