IN A LARGE hanger in Turin, Eurofighter Typhoons are being assembled for delivery to the Italian Air Force — €60 million (£41 million) of supersonic carbon fibre kitted out for an aerial dogfight with a nameless enemy.

Finmeccanica, an Italian aerospace firm, is assembling the aircraft and in Britain the same job is being done by BAE Systems for the Royal Air Force. Eurofighters are also being assembled by EADS in Germany and Spain, for their respective air force customers, and each aircraft is identical, indistinguishable other than from the air force livery and the computer codes that allow the pilot to fly the jet.

Eurofighter is the pinnacle of achievement for defence industry collaboration in Europe, but it is also an anachronism and not just because the Typhoon is currently unnecessary, there being no hostile air force of sufficient strength anywhere in the world currently posing a threat that requires such a powerful response.

Eurofighter is often described as a creature of the Cold War, designed to bring down Soviet MiGs and Sukhoi fighters and bombers. What is less often realised is that the European aerospace industry itself has changed. No longer chained to national flagpoles, it has transformed itself into a band of freewheeling capitalist vehicles, in a permanent quest for the big-money deal.

European governments and their resident arms-dealers have known for some time that the pot simply is not big enough to support the half- dozen companies that claim the role of European prime defence contractors. Europe’s taxpayers have no appetite for vast defence projects and the official assumption has always been that Europe’s armament workshops will swallow their corporate pride and merge under a European Union flag.

The question arises: is that really in their interest and what will happen if they do not? The answer is already apparent — they are behaving like normal companies, following the scent of money. BAE has turned its back on Europe already, if not yet on Britain; the company is single-mindedly pursuing Americanisation, its long-range guidance systems locked on the Pentagon’s $500billion (£290 billion) defence budget. Initially, BAE had hoped to clothe itself in the Stars and Stripes by merging, but, having failed to achieve that goal, it is now buying up small American firms, reinventing itself by acquisition as a US defence conglomerate owned by a British financial holding company.

Others, notably Thales, of France, and Finmeccanica, are pursuing the American crock of gold. Overt signs of an Americanised Thales would not yet be tolerated in Paris or in Washington, so the French company clothed itself at first in a Union Jack, buying Racal and aggressively pursuing contracts with the Ministry of Defence.

Finmeccanica has pursued an almost identical strategy, acquiring the Westland helicopter business from GKN and more recently paying £648 million for BAE’s avionics business, based in Edinburgh.

The Italian firm’s British bulldog move has been hugely successful. This year, an Agusta Westland helicopter, the EH-101, was chosen by the Pentagon for Marine One, the flagship presidential 23-strong helicopter fleet. Such a sensitive contract was a breakthrough for Finmeccanica and it is hoping to secure more lucrative follow-through deals with the renamed US-101, notably a competition to build 150 search and rescue helicopters for the US military. More money is at stake — over the next two years Finmeccanica expects to increase its US order intake from €1.6 billion to €5.2 billion.

That the Pentagon is now casting its procurement net a little wider is a concern for Boeing, Lockheed and Northrop, but it is potentially more worrying for European governments.

It may be satisfying to think that President Bush could soon be dangling from rotors made by an Italian firm in Yeovil, but there is a more subtle underlying shift of power. If Europe cannot satisfy the hunger for revenue of its arms merchants, it is only natural that the ties to Washington strengthen as their attachment to London, Paris, Rome and Berlin weaken.

Consider the Joint Strike Fighter (JSF), a $200 billion multinational project to build a versatile attack aircraft. It has been plagued by disputes between the partners, in particular a refusal by the Pentagon to allow its foreign partners, including Britain, access to the vital software code that governs the aircraft’s systems.

Without access to the code, the JSF becomes an American aircraft assembled abroad, and agreement is even lacking for the latter role. Britain and Italy are vying for the location of European final assembly, raising the prospect of two factories and extra expense. For Europe, the problem is cost, because cost does not matter in Washington.

If BAE is thumbing its nose at Britain’s competitive tenders, it is doing so in the knowledge that in America the cost-plus contract is still alive and well. The all-in bill that the American taxpayer will foot for the President’s fleet of helicopters works out at about $300 million per aircraft, including the secret electronics (unknown to Finmeccanica), communications and presidential rigmarole. None will complain. If an Italian firm won this competition, it was because it had the better helicopter, not because it was cheaper.

Europe cannot play at this game — political appetite for expensive weaponry is nil. In America, there is an underlying assumption that China will soon pose a military threat and Congress is hugely supportive of military programmes, not least because the contractors ensure that they have operations in the key congressional districts. However, in Europe, there is no agreement on the nature of the enemy, much less the weapons required.

If Europe’s defence firms are heading west, it is because it makes sense.

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