This historical description of the Gripen is provided to give the reader an understanding of the difficulties that were involved in making a crucial decision on Sweden's future air combat capabilities.
A description is provided in this section of the political manoeuvring that took place during the 1970s and 1980s in Sweden when the decision was to be made regarding the renewal of defence capabilities for military combat aircraft. A description is also provided of the political and industrial challenges.
This chapter describes how the Swedish Parliament, government, government agencies and the Swedish Armed Forces were persuaded to make the decision to develop a new aircraft system after the Viggen.
At the end of February 1979, the Liberal Party minority government made the decision to terminate the B3LA project. Barely more than three years later, in June 1982, Parliament made the decision to develop the multi-role JAS 39 Gripen.
This was the beginning of an exciting and exceedingly demanding political, military, industrial and technological challenge.
General opinion and media coverage were not favourable to a positive decision at the beginning of this process at the end of the 1980s. Moreover, in view of the cost trend for the Viggen system, many doubted that a new aircraft system could be developed at a reasonable cost.
This era was characterised by the Cold War, which was reflected in Swedish security and defence policies. As a neutral country, Sweden had every reason to maintain a strong defence due to the balance of power between the US and the former Soviet Union in the region and various tests of strength.
Sweden's defence doctrine called for a strongly declared freedom from alliances so as to remain neutral in the event of conflicts in the region. To support this freedom from alliances, a strong defence industry was required and the Swedish aircraft industry was thus an important element of this defence doctrine that had dominated since the 1940s. At the close of the 1970s, when the 37 Viggen fighter aircraft system was to be replaced, the consequences for the Swedish aircraft industry were discussed and analysed. Orders from the Swedish Armed Forces constituted the primary source of revenue for Sweden's aircraft industry.
There was heated political debate on the cost trends for various military projects. It thus became a political challenge to strike a balance between the various wills and the more or less factual aspects of the defence debate from this time.
The armed forces needed a new military fighter aircraft due to the approaching obsolescence of the attack version of the AJ 37 Viggen. Investigations also included studies of how the light attack and training SK60 aircraft could be replaced.
Investigations of aircraft replacement in the years 1976–1979 were conducted on several different levels and in different constellations.
The government procurement agency, the Swedish Defence Materiel Administration (FMV), worked extensively with Saab and Air Force Command, and presented the results of the investigations for defining the next military fighter aircraft after the Viggen system. These investigations were begun in 1975. These investigations of future air defence were subsequently designated as “Luftförsvaret i Nästa Sekel” (LINS).
Various alternatives and proposals were prepared but the development costs for most of the alternatives exceeded the budgetary frameworks. FMV preferred a new fighter, smaller than the Viggen.
Another proposal was to modernise the fighter version of the Viggen system (JA37) as an attack plane. This aircraft went under the designation A20.
Saab also prepared proposals for entirely new aircraft. One of these was the B3LA, a specialised light attack and training aircraft. The B3LA was the result of studies and analyses of various alternatives for replacement of the attack version of the Viggen system. The B3LA would be a subsonic attack aircraft with new and smarter attack weapons combined with advanced target acquisition capabilities. It was to be designed for ease of use in the field, with deployment from normal highways with ground crews made up of conscripts in the same way as with previous Swedish fighter aircraft systems. During 1978/1979 only the B3LA light attack aircraft and variants of it remained as development objects for the Swedish aircraft industry.
After several investigations and analyses of various alternatives, the replacement for the attack role of the Viggen system became the B3LA.
In 1978, the government appointed an aircraft industry committee to prepare proposals for procurement of new aircraft. The aircraft industry committee recommended the phase-out of eight JA37 Viggen squadrons and replacement of the older attack versions of the Viggen with a new version of the Viggen system called A20. The budgetary frameworks for fighter aircraft procurement did not however, allow for both this proposal and the B3LA.
After a few years of study and initial engineering, work with the B3LA resulted only in a full-scale mock-up before the decision was made to terminate the project.
The new direction set by the government after the decision was made to terminate the B3LA project was that the Swedish aircraft industry would be engaged to modernise existing older aircraft and to perform certain development activities for the JA37 Viggen. Moreover, a training aircraft with limited attack capabilities would be developed, the SK2, possibly with joint development in collaboration with foreign companies. For all of these alternatives, the scope of development was much lower than before.
Termination of the B3LA in February 1979 was the death toll for an industry that had successfully developed high quality fighter aircraft systems for more than 30 years.
The government now had three different investigations addressing the aircraft question. An aircraft industry committee (Flygindustrikommittén) under the management of the Ministry of Defence was to investigate the consequences for the industry if development and production of the B3LA did not come about.
Another significant question was in how remaining production of the Viggen system, including service and maintenance, would be managed throughout its service life without the support of a developing aircraft industry.
Other investigative groups where charged with studying various future possibilities for the Swedish aircraft industry. An aircraft industry delegation (Flygindustridelegationen) was to investigate civil utilisation of the aircraft industry. The military aspects and consequences of various procurement alternatives for the aircraft industry were to be investigated by a military aircraft industry committee (Militära Flygindustrikommittén).
Sten Gustafsson, CEO for Saab AB at this time, describes the mood of the industry as follows. (Source: Saab Gripenkrönika 2007).
A few days after the Liberal Party minority government, in February 1979, determined that there was not a majority in Parliament for the B3LA, a light attack and training aircraft, we gathered to mourn the loss. “We” in this case meant a number of people in leading positions from Saab-Scania and the Saab Aeronautical Division. We met in Linköping in the residence of the CEO.
The mood was one of resignation. The project that had been underway since the mid-1970s had been terminated and the future seemed uncertain. The political situation was heavily influenced by Sweden having a minority government and the upcoming election for Parliament in the autumn (September 1979). Within the armed forces – Supreme Command, the Air Force and the Swedish Defence Materiel Administration – there was a sense of reserve, to say the least. The aircraft industry had been the object of a parliamentary investigation – the Norlingska utredningen. And there was scepticism regarding new and expensive investments in the defence industry.
Prevailing opinion had its political, financial and defence policy explanations. Regarding the latter aspect, many believed that the Viggen was – or would be – the last major, solely Swedish developed aircraft system and that future aircraft would either be manufactured in Sweden under license or purchased from abroad. This perception had gradually gained ground and it now appeared nearly as a fait accompli.
To be able to achieve the goal of developing a successor to the Viggen we had to, and here there was consensus, gather our internal resources and improve our relations with political and military leaders to turn opinion. In other words, the meeting in Linköping was the beginning of something that would require major creativity and considerable effort.
At Saab-Scania the perception was that to succeed in reversing developments, action would be required that had not previously been taken. After discussions with Dr. Marcus Wallenberg, the chairman of the board for Saab-Scania, the board decided that we would quietly initiate work with defining a new aircraft system and that this would be self-funded. Work with a multi-role fighter, attack and reconnaissance aircraft began in March 1979.
One of the explanations for Dr. Wallenberg's strong engagement and support of Saab in a precarious situation was his leading role as a defence ally back in the 1930s, when the foundation was laid for the Swedish aircraft industry.
The board's decision was perceived as a very tangible declaration of faith by all the skilled engineers at Saab, and it was seen as an acknowledgement of sorts. The fighting spirit was restored at the Aeronautics Division’s development department and the other concerned departments.
Focusing resources, mobilisation, creativity, hard work, commitment, enthusiasm and daring all characterised the Swedish aircraft industry during the period 1979–1982. The attitude had changed regarding development of a new aircraft system in Sweden.
Saab gathered senior management and specialists on 27 February 1979 for a crisis meeting in Linköping. The JAS (the Swedish abbreviation for fighter-attack-recon) project was started based on earlier ideas for a new, lightweight multi-role aircraft.
At the meeting in Linköping in the residence of Saab's CEO, efforts were oriented to a lightweight fighter aircraft, but the idea however, was not entirely new. At the FMV, Air Force Command and Saab, the concept had existed in studies for future investments in a lightweight fighter aircraft.
Moreover, with the major technological advances in a number of fields, it was determined that the concept was feasible.
The summary below summarises the supporting decisions defined at an early stage in investigative work and that would set the level and orientation of the entire design.
Certain important technical requirements
On 10 October 1979, after roughly seven months of intensive work, the first presentation of the multi-role JAS concept was presented to leadership of the Swedish Air Force and the FMV. The meeting was held at Saab-Scania’s training centre at Hedenlunda in central Sweden. The reaction was positive and interest in the concept of a small, technically advanced multi-role aircraft was tangible.
Opinion gradually turned, from having been very sceptical to becoming more nuanced. This was also observed among decision makers and the general public.
Prior to the five-year defence decision that was to be made in 1982, it was necessary to carefully study alternative forms of procurement.
For the new multi-role JAS platform, there were a number of conceivable procurement forms. The alternatives investigated were direct purchase of foreign aircraft, licensed manufacture in Sweden of foreign aircraft, collaboration in development and production with one or more countries, or assuring Swedish capabilities with unified development in Sweden of a new military multi-role aircraft.
Against the background of the changed direction in the aircraft question, the military aircraft committee received a supplementary directive to investigate the military aspects as well as the consequences of the various procurement alternatives for the aircraft industry. The investigation now addressed the question of procurement of Swedish or foreign military aircraft.
The committee presented its findings in April 1981. Among other things, it was determined that procurement of a foreign multi-role platform would halve the volume of work in the country's military aircraft field.
The specification was well prepared, was of very high quality, and at the same time, was characterised by substantial consideration to the future. It addressed both the operational and customer perspectives, as well as a look to the future with an assessment of the opportunities to exploit future technological developments.
To find out what the purchase of foreign platforms/systems would entail, the FMV requested bids for modified versions of the F-16, F-18, F-20 and the Mirage 2000.
Depending on the aircraft type, larger or smaller modifications would be necessary to fulfil Swedish requirements. The requirement for short landing strips was difficult to fulfil with these aircraft.
The foreign bids and the bid from IG JAS (the industry group for the multi-role aircraft) were submitted in the spring of 1981 and evaluated under a veil of considerable secrecy. There were two separate groups at the FMV that evaluated both technical solutions and financial arrangements.
Discussions were held with England, France and Germany, and to a certain extent, the US, to determine if there were grounds for joint development. Even if these countries’ requirements for future platforms had certain similarities with the multi-role JAS specification, the schedules and financial budgets were not in synch. After the decisions during the first half of 1980, the tempo of planning radically increased and a primary specification was produced. International discussions were conducted both by government agencies and within the industry. At a relatively early stage, it was found that the alternative with joint development was not viable.
After the FMV analysed the various bids, the documentation was compiled and submitted to the Supreme Commander and the Swedish Armed Forces. In parallel with this, the Swedish Armed Forces conducted their tactical and operative evaluation.
Against the background of the Supreme Commander not finding any of the alternatives acceptable for replacement of older aircraft systems, he instead recommended the following during the spring of 1980:
The government accepted the Supreme Commander's recommendation and submitted a proposition to Parliament in March 1980 for approval of the Supreme Commander’s proposal for resolving the aircraft question. What was it that had convinced the Supreme Commander and the government to so radically change their views on the aircraft question? The answer varies with whom you ask, but most agree that the following factors were very influential:
Surprisingly soon thereafter, the Supreme Commander stated in October 1981 – after the FMV’s evaluation during the spring and summer of all bids – that he recommended moving forward with a Swedish procurement if acceptable terms could be reached in the concluding contractual negotiations.
The requirements placed on the Swedish aircraft industry were stiffened. The industry was to take greater responsibility, both technically and financially. The State only wanted one partner in negotiations. There would be collaboration with foreign industry for more subsystems in the aircraft than before to hold down expenses. The procurement would be conducted differently than what had applied for previous aircraft systems in Sweden.
The requirement for one partner led to the Swedish aircraft industry forming the IG JAS industry group (Industrigruppen JAS) in order to submit a joint bid. IG JAS consisted of the companies Saab-Scania, Volvo, Ericsson, SRA and later FFV. IG JAS was formed in the autumn of 1980 and IG JAS AB was registered in the spring of 1981.
IG JAS would invest its own funds to cover 50 percent of the costs for the definition phase. Moreover, intensified collaboration would be conducted with the international aircraft industry by outsourcing work to subcontractors.
In addition to this, IG JAS was to agree to fixed prices and to submit binding technical guarantees in an advanced development project. These requirements led to many hours of trying negotiations.
At IG JAS and Saab, the assessment was made that there were no other alternatives if there was to be a Swedish aircraft system in the future. IG JAS was forced to accept the State’s general conditions, and within this framework, to try to obtain the best possible terms.
To be able in operate in an industrially efficient manner and in accordance with sound business practices, IG JAS decided to formalise the collaborative forms in a completely new way.
Gunnar Lindqvist, head of the primary development department for weapons materiel at the Swedish Defence Materiel Administration (FMV) describes his personal views and the administration’s views on working with the procurement.
The groundless propaganda against the Viggen system pressured the politicians into beginning development of a successor. A condition for broad political support for the procurement was to transfer the financial responsibility to the aircraft industry. Even if the more informed politicians realised the impossibility of this, the majority of their colleagues were convinced that it was feasible. The system we are talking about here involves cost performance factors extending over 30 to 40 years, and perhaps even longer.
A contract longer than 10 years is unrealistic according to the experiences of the FMV and others. In principle, a company cannot be accountable for more than the owners’ invested capital. During the first approximately five years, all the important decisions are made, which results in establishing costs more than 40 years into the future if the project is executed.
These truths that applied then and that will also apply in the future, clearly indicate that the industry cannot assume the long-term total responsibility in keeping with the wishes of the politicians. Also required was setting a fixed price for development and serial production from the very beginning of the project. Neither the aircraft industry nor the FMV is interested in this form of procurement, but was forced to produce an agreement along these lines.
The question of demands for an alternative procurement procedure is tied to the preceding. From the political side, it was felt that the FMV was getting overly involved in the details. FMV should only base the agreements on very general specifications. Most important in these kinds of contracts we are talking about is a verification programme in which the supplier must prove that the requirements are fulfilled.
These requirements must be financially and practically measureable. One of the FMV's chief duties is to break down the general tactical requirements into measurable requirements. The requirements should be of sufficient scope so that in all probability, it can be assured that the materiel will function in the intended environment. Failing to verify would be completely irresponsible with regard to those who will use the materiel.
The aircraft industry had difficulty in accepting the FMV's requirements and would have preferred objectives instead of requirements. The FMV however, claimed that a fixed price must be based on an almost completely fixed specification.
The contractual form with a fixed price was not recommended by the FMV and was not a wish from the industry either, but it was seen as necessary in convincing our politicians with their often limited knowledge.
The conclusion that should be drawn for development-intensive projects, is it that is wrong to force a fixed price on the industry for development and serial production until development has been underway for a certain amount of time, say three to five years. Before this, sufficiently accurate calculations cannot be made for a fixed price agreement. The most difficult technological questions must be cleared up first. To transfer complete responsibility to the industry is wrong and unrealistic.
More important than economy however, is the value of the system. This is decisive in critical situations. The JAS 39 Gripen has, based on what I have experienced, performed well in all exercises with PFP and in other international contexts. Even if the aircraft's properties for flight mechanics, due to among other things to its size, cannot be considered as better than for certain newer and larger aircraft, its total effectiveness is clearly impressive. The aircraft's good reliability is also included in this assessment. But above all, it is an aircraft that is optimal for countries with limited defence funding.
Has it been profitable to develop and produce the 39 Gripen aircraft system? It must first must be established that if in 1982, it was only a matter of four squadrons as now, the system could not have been motivated. Probably not either if serial production prices from the end of the 1980s had come up back in 1982. Whether or not it has been profitable on the whole is something that we will only know in conjunction with the withdrawal of the 39 system from service.
To summarise, I firmly believe that the 39 Gripen has become a very good aircraft.
Saab wanted to avoid developing what could be purchased from the international aircraft industry.
This approach would mean that the Swedish defence industry would not be unnecessarily utilised for equipment and subsystems, but rather the system choices could be based on performance, quality and lowest cost.
To realise this, Saab strove to gain a larger coordinating role than before. These new ideas met with resistance from the concerned defence companies – primarily Ericsson, SRA and Volvo Flygmotor – and not the least from the FMV. This meant that the ideas could not be fully implemented, but a new orientation was negotiated within IG JAS, which continued through the years and proved to be very successful, with good results over a period of 30 years. Collaboration with the FMV however, was characterised by strained relations at times, but now that all has been said and done, the final results can be assessed as good.
It was decided that IG JAS would be the parties’ commissioning body, which under its own name and on the parties’ behalf, would submit bids and sign agreements with the FMV. IG JAS would fulfil the agreements and be responsible to the FMV.
The scope of collaboration included the basic aircraft, engine, target input, presentation equipment and support systems. Certain systems and equipment would be provided by the FMV and constitute direct deliveries to the weapon system. Examples of these were communications equipment, countermeasure systems and weapons.
Saab’s undertaking to establish industrial collaboration with foreign industries involved contacting 65 manufacturers in the form of 80 queries. In these queries, Saab requested existing products and stipulated that funding of development costs was to be financed by the supplier and that payments could not be expected until serial production was ordered.
In the spring of 1982, Saab jointly prepared a standardised purchasing contract with an American law firm that would be used in procurements from larger foreign subcontractors. The contract was extremely complete and the contract conditions were unusually tough for a development project such as this. The conditions were based on the FMV's contract with IG JAS.
The subsystems from the subcontractors would include a considerable amount of new technology, and while work was underway, many modifications would be necessary, as is usually the case.
It often proved difficult to fully utilise the contract conditions. When a supplier is having problems, it is often best not to threaten with harsh financial reprisals, because the supplier may then threaten to terminate the agreement or halt deliveries while awaiting resolution.
In the short term, a primary supplier is entirely dependent on the subcontractors managing their deliveries. It is difficult to handle the financial consequences of a delay to the entire programme. When making an overall assessment however, it can be deducted that the model contract constituted a good base for purchasing activities. On 21 August 1980, the minister of defence called the first JAS meeting with all directly concerned parties in the armed forces and industry. This served as a kick-off meeting during which all the conditions were reviewed and situational reports were submitted.
During the summer and autumn of 1981, the FMV appraised the received bids from foreign aircraft manufacturers and from IG JAS.
Supreme Command had formed a management group with participants from the concerned government agencies for comprehensive management of the JAS organisation. Due to the compressed schedule for the entire organisation, it was necessary with this comprehensive coordination if concrete alternatives from Supreme Command were to be produced on time, prior to the defence decision.
Supreme Commander General Lennart Ljung announced on 14 October 1981, somewhat earlier than expected, that the FMV’s evaluation of a Swedish multi-role system had determined the project to be feasible. There was also the possibility of utilising additional performance improvements later in the project. The undertaking was well defined, and in principle, met the set requirements.
Swedish Air Force Commander General Dick Stenberg also recommended procurement of a Swedish multi-role system.
Supreme Command suggested that the government should make the decision to develop and manufacture the JAS multi-role aircraft system in Sweden if continued negotiations with IG JAS AB resulted in acceptable terms.
The position of Supreme Command led to FMV being charged with negotiating with IG JAS for development and production of the JAS 39. The FMV presented the Swedish position to the foreign companies and they accepted the Swedish decision. IG JAS was also required to fulfil a number of other requirements beyond core operations.
Saab and Volvo Flygmotor were to initiate civil investments with the support of state conditional loans, for example. The aircraft industry delegation (Flygindustridelegationen) had established that engagement in aerospace was necessary to contribute to maintaining industrial aircraft expertise. To facilitate the aircraft industry’s engagement in civil aviation projects of various types, the delegation suggested state conditional loans, in other words, state participation in risk financing of civil investments.
Saab's civil investments led to an agreement with the American company Fairchild Industries. At a meeting in January 1980, it was decided to develop the Saab Fairchild 340 (SF 340) in a joint aircraft project. Volvo Flygmotor increased its engagement as a subcontractor for the major civil aircraft engine project.
Based on input from concerned government agencies and the industry, the government made the decision at the end of 1981 to recommend the Swedish alternative.
The FMV was charged with initiating contract negotiations with IG JAS and these were completed in the spring of 1982. The government made the decision on 17 May 1982 to execute the project. The government's proposition was thereafter reviewed by the Parliament’s defence committee. The government ratified the decision after a relatively short debate on 4 June. At the same time a financial framework was established for the project including the total expenses for 140 aircraft, with support systems, weapons, countermeasure equipment, etc. This framework was later carefully monitored by all parties and reports submitted each year to Parliament.
On 30 June 1982, an agreement was signed between the FMV and IG JAS AB. This basic agreement was designated “Grundavtalet”. It covered development of the JAS 39 aircraft, including five test aircraft and production of the first subseries of 30 aircraft, as well as requisite support systems, all at an index-regulated fixed price and with extensive guarantees.
The basic agreement also included an option with certain ceiling prices for production of another 110 aircraft and associated support systems.
After the election in September 1982, a new Social Democratic government took office and conducted an investigation of the JAS project’s costs before deciding on execution of the project. The new government emphasised that “the JAS project will have major industrial and regional political significance.” A JAS decision with certain limitations was subsequently made in Parliament in April 1983.
At the same time, the government appointed a special industrial policy investigative group under the leadership of Bert Lundin, former chairman of the Metall trade union. The industrial policy investigative group continued as a unified, driving and reporting organ for the government with regard to industrial collaboration offset.
The company IG JAS was responsible for direct work with offset, i.e. on the multi-role JAS aircraft, as well as for bringing about the companies’ promised employment gains in Sweden.
With regard to other indirect offset, IG JAS was of the opinion that other organisations should be able to assist. During the autumn of 1982, continued work was discussed with the Swedish Trade Council, and in March 1983, an agreement was reached between the Swedish Trade Council and the National Industrial Board regarding indirect offset. The results from work with new business opportunities were subsequently submitted in a report each year to the industry policy programme. This report was included in the defence proposition every year that Parliament addressed the project.
The government's defence proposition 1987/88:100 stated that IG JAS had created 1200 new jobs in Sweden (800 promised), and of these, 140 were in the County of Norrbotten (300 promised) in northern Sweden. Specifically, it could be shown that an additional 50 jobs had been created in the rural mining district of Svappavaara.
The undertaking with technology transfer was conducted as theme days for the various fields of technology at technical colleges and universities in Sweden. The theme days were much appreciated, attracting major interest with many participants. They were conducted in collaboration with the Swedish Academy of Engineering Sciences and the Board for Technical Development.
The IG JAS’s final report is dated 26 June 1987. The following is from proposition 1987/88:100: “For continued monitoring of IG JAS industrial policy commitments, a special workgroup was initiated in 1986 at the Ministry of Industry, which has reached the conclusion that IG JAS has complied with all aspects of its undertakings regarding both jobs and technology transfer.”
How did the industry deal with the uncertainties that existed at the beginning of 1979 and continued for roughly two years until a JAS contract was signed? The most important factors were as follows:
It was natural that Saab led the attempts to win over the State to the new project. For Saab it was a matter of do or die. For Volvo Flygmotor it was a very important order. For Ericsson it was important but not crucial. And for FFV the significance was limited because they would perform maintenance regardless of who had delivered the aircraft. Saab was thus the party most dependent on the JAS agreement.
It can also be deducted that Saab was assisted by external circumstances in the form of the grounding of the Russian submarine U137 in the Karlskrona archipelago and the war in Afghanistan. Both emphasised the need for a strong defence. The agreement on type work and subseries 1 had entailed a financial loss for the industry.
In Saab's case, failure to receive the JAS order would have meant a phase-out of aircraft operations. Moreover, a future without the JAS project would have negatively affected investments in civil aviation.
The course of events was basically a verification of the politicians and government agencies’ positive perception of the Swedish aircraft industry and the industry’s willingness and capability to take responsibility for its future.
Major General Staffan Näsström from the FMV conducted an analysis of the conditions necessary for a successful military industrial project and why the Swedish Model has worked so well. He summarised his conclusions in nine points:
(Source: Public JAS symposium in Linköping, 1998)
The customer has exhibited extremely high competence, suitable for industrial collaboration (IG JAS) for larger agreements.