{"id":2174,"date":"2013-09-23T10:13:08","date_gmt":"2013-09-23T16:13:08","guid":{"rendered":"http:\/\/peaceeconomyproject.org\/wordpress\/?p=2174"},"modified":"2013-09-23T10:13:08","modified_gmt":"2013-09-23T16:13:08","slug":"boeing-to-learn-fate-of-south-korean-f-15-deal-on-tuesday","status":"publish","type":"post","link":"https:\/\/peaceeconomyproject.org\/wordpress\/boeing-to-learn-fate-of-south-korean-f-15-deal-on-tuesday\/","title":{"rendered":"Boeing to learn fate of South Korean F-15 deal on Tuesday"},"content":{"rendered":"

by\u00a0Tim Logan<\/a>, St. Louis Post Dispatch
\nclick here for original article<\/a><\/p>\n

\n

In the wee hours of Tuesday morning here, a room full of military officials half a world away will make a decision that could affect thousands of jobs in the St. Louis area.<\/p>\n

That\u2019s when the South Korean Defense Ministry is set to decide on a contract for their Air Force to buy 60 new fighter jets, with Boeing Co.\u2019s locally-built F-15 widely regarded as the front-runner in a three-way competition with Lockheed Martin and Eurofighter.<\/p>\n

The deal, worth an estimated $7.6 billion, would be a boon to manufacturing here, extending production at one of the region\u2019s iconic assembly lines and providing work for countless suppliers well into the next decade.<\/p>\n

It would also highlight the growing reliance on international sales at Boeing\u2019s Hazelwood-based defense unit. The region\u2019s second-largest employer has long prided itself on arming the nation. Now it\u2019s arming the world.<\/p>\n

The South Korea deal would be the latest in a string of big-dollar foreign sales for Boeing Defense, Space and Security. In recent years they\u2019ve sold C-17s to India and Qatar, F-15s to Singapore and Saudi Arabia, F\/A-18 Super Hornets to Australia and, soon, the company hopes, to Brazil as well.<\/p>\n

All the deals have helped extend production lines that would otherwise be dwindling as the Pentagon pulls back on new plane orders and focuses its efforts on Lockheed Martin\u2019s F-35 Joint Strike Fighter. And they help Boeing\u2019s bottom line.<\/p>\n

While overall revenue at Boeing\u2019s defense unit has been flat at around $32 billion over the last five years, the share of that money that comes from overseas customers has doubled, to 24 percent in 2012. That\u2019s likely to grow even more; at the start of this year 41 percent of Boeing\u2019s pending military orders came from international customers.<\/p>\n

\u201cWe continue to see strong demand for our offerings, particularly in the Middle East, Brazil and the Asia Pacific region,\u201d Chief Executive Jim McNerney told analysts earlier this year.<\/p>\n

But international sales, come with their drawbacks, too, experts say.<\/p>\n

As\u00a0last week\u2019s announcement that Boeing would shutter its C-17 plant<\/a>\u00a0in California highlights, foreign orders can be too few and far between to sustain complex production lines built around long-term U.S. military contracts. Boeing delivered the last of its giant cargo jets to the U.S. Air Force earlier this month, and has built two dozen more for international customers. But it couldn\u2019t string together enough foreign deals to keep the line running smoothly.<\/p>\n

<\/div>\n

\u201cForeign sales can be a wonderful add-on to a stable domestic production line,\u201d said Loren Thompson, a defense analyst with the Lexington Institute, a Washington-area think-tank. \u201cBut as a standalone, without a domestic component, it becomes a roller coaster.\u201d<\/p>\n

Then there are geopolitical complications.<\/p>\n

Pentagon weapons-buying gets competitive enough among big U.S. defense contractors, but for overseas sales Boeing often finds itself up against planemakers from France, Russia, Sweden and elsewhere. And given the dollars involved and the prestige associated with high-end military hardware, considerations often involve more than just the capabilities of the respective aircraft, Thompson notes.<\/p>\n

\u201cThe culture for selling arms overseas often is very different from the standards that prevail in the U.S.,\u201d he said. \u201cThat can make it hard for U.S. companies to compete.\u201d<\/p>\n

Sometimes, deals can be lost over things that have nothing to do with fighter jets at all. Some analysts worry Boeing\u2019s bid to sell F\/A-18s to Brazil could lose out after that country\u2019s president last week\u00a0cancelled a U.S. visit in October<\/a>\u00a0amid leaks about National Security Agency snooping on the Brazilian government. The visit was to have included talks about the fighter deal. Now it may not happen, creating a window for foreign competitors.<\/p>\n

South Korea\u2019s F-15 purchase, however, is\u00a0the odds-on favorite to go through.<\/a><\/p>\n

It is the only one of the three bids that met the country\u2019s budget, and with South Korea facing a $7.4 billion budget shortfall this year, military officials there insist they won\u2019t spend more than planned. And, while some retired generals have urged South Korea to buy a more-advanced jet, the Air Force there already flies about 60 F-15s, minimizing disruption or expense integrating the new planes, which will replace older F-4 and F-5s. But no decision is required Tuesday; the Koreans could put the contract out for a new round of bids.<\/p>\n

In a statement, Boeing said it has received no word yet on Korea\u2019s plans, but was confident in its proposal.<\/p>\n

\u201cWe await word on the next steps in the selection process and will continue to work closely with the Republic of Korea in meeting their defense requirements,\u201d the company said. \u201cBoeing has offered an extremely capable, low-risk and price-com petitive Silent Eagle F-X solution that can be delivered on a schedule that meets Korean requirements.\u201d<\/p>\n

Should the Koreans agree, the 60-plane order would extend F-15 production \u2014 which is all for foreign customers at this point \u2014 well into the 2020s. The company wouldn\u2019t say how many jobs that means in St. Louis, but in late 2011, about 2,000 people worked on the program at Boeing here, plus many more at suppliers including GKN Aerospace, which employs 1,500 at its plant in Hazelwood.<\/p>\n

Gordon King, president of the International Association of Machinists District 837, which represents assembly line workers at Boeing and GKN, says foreign F-15 sales have been \u201ca savior\u201d for his membership. And he was looking forward to more good news Tuesday morning.<\/p>\n

\u201cNow we\u2019ve got to start working on foreign sales for the F-18,\u201d he said.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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