South Korea rejects Boeing, says F-15 not good enough

St. Louis Post Dispatch
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SEOUL, South Korea • Saying they wanted a more-advanced fighter in their largest-ever weapons purchase, South Korean military officials Tuesday rejected Boeing Co.’s bid to supply 60 F-15s and decided to re-open the contract.

The decision came as a surprise, as Boeing was the sole remaining bidder for the $7.7 billion job. And it’s a blow to fighter-jet production in St. Louis, where an estimated 2,000 people work on the F-15’s final assembly line and thousands more work at suppliers.

The 60-plane deal would have extended production here into the 2020s. Now Boeing is looking at a small and dwindling pool of customers for a fighter jet it has been building for decades.

The age of the F-15 platform was a major factor in South Korea’s decision. While Boeing had upgraded the plane with new stealth capabilities — and even re-branded it the “Silent Eagle” — South Korean critics said the warplane lacks state-of-the-art capabilities and cannot effectively cope with North Korea’s increasing nuclear threats.

Boeing said in a statement that it was “deeply disappointed” by Tuesday’s decision, adding it “rigorously” followed the South Korean arms procurement agency’s instructions throughout the entire process.

“We await details from [Korea’s Defense Ministry] on its basis for the delay while evaluating our next options,” the company said in a statement.

Korea said it plans to re-bid the contract and now hopes to make a decision next year. Analysts said the move suggests that South Korea ultimately wants Lockheed Martin’s F-35 Joint Strike Fighter, a so-called “fifth generation” jet that — despite delays and huge cost overruns — has become the fighter of choice of the U.S. and, increasingly, of its larger allies, including South Korea’s neighbor Japan. Just last week The Netherlands agreed to purchase 37 F-35s for $4.5 billion. Lockheed had proposed the F-35 to South Korea, but the bid was originally considered overbudget and therefore disqualified. A new bid could result in a lower price, or a higher budget.

“This seems to be heading in the F-35’s direction,” said Richard Aboulafia, a defense analyst with The Teal Group near Washington, D.C. “But until we get clarity on what’s political and what’s a change in requirements, it’s hard to say for sure.”

It’s unclear what the future holds for the F-15, which first flew a half-century ago and has been a workhorse of the Air Force fleet for decades. A contract with Saudi Arabia will keep the plane in production through 2020, but beyond that, customers are few and far between. Boeing said “interest remains high” for F-15 sales to customers in the Middle East and Asia, but Aboulafia said any orders would likely be small, nothing the size of South Korea’s 60-plane purchase.

“It’s always had a very limited user pool,” he said.