By Lee Tae-hoon
Two of the world’s largest aerospace and defense companies based in the United States have begun a fierce battle in Korea over what would be the biggest arms-procurement deal ever in the country.
The fight between Lockheed Martin and Boeing was sparked following Seoul’s recent move to jumpstart the stalled plan to purchase a fleet of advanced fighter aircraft with an additional budget of up to 10 trillion won ($8.96 billion).
Under a procurement project, code-named FX, Korea has been seeking to replace its aging combat aircraft with some 120 high-end fighter jets since 1988.
The ambitious project, however, suffered major setbacks due to the 1997 Asian financial crisis and the 2008 global financial crisis, resulting in the Air Force only purchasing half of its original target so far.
Now, Seoul is losing its patience in the face of growing military threats from North Korea and its neighboring countries’ aggressive pursuit to develop stealth combat aircraft.
Russia has successfully test-flied its own Sukhoi T-50 stealth fighter in early 2010, China staged a successful maiden flight of its indigenous stealth jet J-20, while Japan is following in their footsteps by working on its own stealth fighter, ATD-X Shinshin.
Air Force officials say the two most viable candidates for the FX-III project are Boeing’s F-15 Silent Eagle (SE) and Lockheed Martin’s F-35A Lighting II, as other foreign jets have yet to prove their capabilities and pose a risk of high maintenance costs.
Boeing claims its F-15 SE offers the most cost effective solution.
“As the F-15 Silent Eagle is more than 85 percent in common with the existing F-15 Slam Eagle fleet, Korea will be able to greatly reduce its operational and support cost,” Chris Chadwick, president of Boeing Military Aircraft, told The Korea Times.
South Korea has purchased 60 of the earlier F-15 variant from Boeing, which won both of the FX-I and II projects in 2002 and 2008.
Though the F-15 SE is known to be a semi-stealth fighter, it appears to be winning the battle here against the F-35, which Lockheed Martin claims as the “only fifth-generation aircraft available for international sale.”
Lockheed Martin has been under harsh criticism that it is trying to dump the first batch of the F-35 fitted with only the bare minimum capabilities on South Korea at an exorbitant price.
Some media outlets went as far as describing the initial production lot of the F-35 offered to Seoul as “empty metal cases” that will likely come with Block 0.5 software and at a price tag nearly twice the original forecast.
Randy Howard, Lockheed Martin’s director of Korea F-35 Campaign, argues that such speculation is groundless and his company is committed to providing combat-ready stealth fighters to South Korea at a bargain price.
“No Korean F-35s will be delivered with Block 0.5 or Block I software. Testing on Block 0.5 has already concluded, and the test fleet will transition to Block II testing this year,” Howard said.
He said all of the F-35s will come with Block II or a higher version as Seoul plans to replace its aging F-4 and F-5 fighters with next-generation planes from 2016 under the FX-III program.
“Block III developmental testing is scheduled to conclude in early 2016,” Howard said.
“All F-35 customers, including Korea, will receive software block upgrades on the same schedule as the U.S. services.”
Block II incorporates initial war fighting capability, while Block III provides the full capability planned for development.
Howard also denied speculations that the F-35’s escalating development cost will make the stealth jet twice more expensive than initial predictions.
“The average recurring flyaway cost of an F-35A, in 2010 economics, is approximately $65 million,” he said.
In 2001, the Pentagon estimated that it would cost $62 million per aircraft to develop the F-35 and would build 2,866 planes.
He stressed that the F-35 is designed to be affordable to purchase and affordable to operate, which is part of the reason why three U.S. services and eight partner nations plan to buy over 3,000 F-35s.
Boeing, however, remains skeptical about whether Lockheed Martin can meet the price, given that its development cost has surged to some $382 billion from an estimated $250 billion.
Nevertheless, Howard expressed confidence that the F-35A, which the Korean Air Force has shown keen interest in,will be available to Seoul with deliveries beginning in 2016.
“F-35 deliveries would be expected to begin approximately three years after the signing of an acquisition agreement between the ROK and the USG for Korea’s FX-III aircraft,” he said.
He also discounted media reports that U.S. Defense Secretary Robert Gates sided with the heavily U.S. government-funded F-35 program, by advising President Lee Myung-bak to purchase 35 F-35s during his visit to Seoul on Jan. 14.
There has been suspicion that the United States is putting political pressure on its key ally, South Korea to sell F-35s.
“Lockheed Martin welcomes a fair and open competition and is confident that Korea’s process will yield one,” the official said.
Howard noted that the first production F-35 made its inaugural flight on Feb. 25 in preparation for delivery to the U.S. Air Force this spring and that there are 10 F-35s currently flying in the test program.
“In 2011, Lockheed Martin plans to deliver more than 15 production F-35s collectively to the United States Air Force and the United States Marine Corps,” he said, noting that his company is increasing the production capacity to more than 200 aircraft per year.
Seoul is reportdly planning to receive proposals from bidders early next year and determine which jet it will purchase as early as August that year.
The Korean Air Force is seeking to purchase up to 60 next-generation combat fighters.
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