What Does a Broken Defense Contract Mean in the Long Term?

Two countries agreed on a contract for a major weapons system, intended to be strategically transformative. But a series of technical problems and cost overruns made the deal vulnerable, and a rapidly changing geopolitical environment made the weapons obsolete. Nevertheless, the deal’s cancellation sparked a major political crisis between the builder and the buyer.

The year was 1962, and the weapon in question was the Douglas GAM-87 Skybolt air-launched ballistic missile. The customer in question, the United Kingdom, had based its strategic deterrent posture on Skybolt-carrying Avro Vulcan bombers, to the exclusion of other weapons systems. After U.S. President John F. Kennedy cancelled Skybolt, the U.K. government launched a furious protest, arguing that the Americans had left them without an independent nuclear deterrent against the Soviet Union.

The Skybolt Crisis, as it came to be known, is little-remembered today, but it is a useful point of comparison for September’s diplomatic blowup between Australia, the U.S., and the U.K. on one side and France on the other. Of course, nuclear weapons and nuclear propulsion, while derivatives of the same basic science, have hugely different strategic meanings, and the contemporary U.S.-led competition with China is not a direct equivalent of the Cold War.

But for all the differences there is one key overacting similarity: Small and middle powers seeking weapons that can materially impact the strategic balance in their neighborhoods need the active cooperation of superpowers. The infrastructure to design, build, crew, maintain, and operate world-class strategic weapons represents a cost that only the largest economies can bear – and even for those, some degree of burden-sharing is necessary.

Fundamentally, this is not a new pattern. In the run-up to World War I, a parallel arms race focused on dreadnought-type battleships was developing between Argentina, Chile, and Brazil, none of which had the capability to build such ships on their own. As a result, each nation’s new warships were ordered from the United States and Great Britain –  though in Chile’s case, their warships were pressed into Royal Navy service at the outbreak of World War I (though without damaging bilateral relations).

As strategic weapons become costlier and more complex, even the relatively limited degree of “consumer choice” that was available to nations window-shopping for battleships a century ago has narrowed. France does, after all, build its own nuclear submarines – indeed, its now-aborted design for the future Australian sub class was a conventionally-powered derivative of its own nuclear-powered fast attack class. At heart, though, the purpose of a strategic weapon is not simply to possess the weapon; the Poseidons and Tridents that replaced Skybolt, after all, have never been fired in anger (and given their thermonuclear payloads, hopefully never will be). The purpose is strategic in a broader sense: to tie the buyer and seller together and create inertia around the relationship that glues it together, even if more transient issues or a strained personal relationship between leaders exerts pressure on it.

Of course, a weapons deal – even a major one – is not sufficient glue to hold together a relationship that is deteriorating for other reasons. The United States’ expulsion of Turkey from the F-35 program after the latter purchased Russian surface-to-air missiles is an example of a failed deal signifying rather than causing a diplomatic split. In that case, the end of the deal was not followed by a sustained diplomatic effort to rebuild. Indeed, Ankara has redoubled its efforts to build its own arms export customer base, focused on selling capabilities like combat UAVs, which were once the exclusive preserve of U.S. firms, albeit at a substantially reduced price.

The denouement of the Skybolt Crisis might also suggest how the transatlantic diplomatic damage from AUKUS might be allayed. After a series of meetings, the United States brought the U.K. into the Polaris submarine-launched missile program, ultimately giving it a far more capable weapons system whose descendant provides the totality of Britain’s strategic deterrent force today. France has a substantial and advanced defense industry, but it lacks some of the unique capabilities that the United States can offer. It may not happen immediately, but if the relatively calm readouts of the first post-AUKUS conversation between Presidents Joe Biden and Emmanuel Macron are any indication, there may be some further strategic technology transfer from the U.S. to France coming in the near to mid term.