U.S. Defense Firms Woo Old Foes

LONDON –  For two decades, workers at Lockheed Martin’s plant in Fort Worth, Texas, built F-16 Falcon fighters that could shoot down MiGs deployed by the Soviet Union and its allies in central Europe.

But last week Hungary, Poland and the Czech Republic were invited to become NATO allies. Now, Lockheed Martin is scrambling to sell the same F-16s to old enemies in central Europe. The potential payoff – billions of dollars in fighter sales.

U.S. defense industry officials are counting on another major factor to help them sell to Poland, Hungary and the Czech Republic - the importance the three countries place on integrating their air forces with those of NATO allies.

U.S. defense industry officials are counting on another major factor to help them sell to Poland, Hungary and the Czech Republic – the importance the three countries place on integrating their air forces with those of NATO allies.

Lockheed has signed cooperative agreements with industry in the region, opened offices to communicate with officials in government and business, and sent its chairman, Norman Augustine, on a tour of Hungary, Poland, the Czech Republic, Romania and Slovenia to advance the company’s name and image.

And Lockheed is not alone. McDonnell Douglas, Boeing, Northrop Grumman, Bell Helicopter, and other major players in the U.S. defense industry are involved in a sales blitz in central Europe.

“Everybody is everywhere over there,” said Jeff Pino, Bell Helicopter’s executive director of marketing for Europe.

Industry experts say nearly every country in the region needs to update its aging fleets of fighters and helicopters. Their current aircraft lack the sophisticated avionics and radar equipment that make Western aircraft far more lethal.

Central Europe is expected to take years to develop as its countries overcome financial and other challenges. But the potential of the region has renewed the spirits of an industry that has witnessed a sharp decline in the Pentagon’s budget and its need for military wares.

“We look at eastern and central Europe as a good market in the near-term and as a really good market long-term,” Pino said. “They want U.S. military standard equipment because that’s what they had been trained to go against and they know how formidable it is.”

In May, Bell signed a $40 million agreement to sell Romania a version of its AH-1W Marine Corps attack helicopter. Bell will produce the 96 choppers in Romania in a joint venture with IAM Brasov, a helicopter-maker there.

Industry experts say central Europe is a good prospective market because of pent-up demand.

“For 50 years, this has been the only region of the world that has been denied Western military products, and so you are starting at ground zero,” said Joel Johnson, vice president for international affairs at the Aerospace Industries Association.

“It’s an open playing field for the Europeans and U.S. and is the widest-open competition the industry has seen in a long time.”

Hungary and the Czech Republic are shopping for 30 to 40 new fighters each and may spend as much as $1 billion to acquire them. Poland is looking for a like number of fighters but is said to be considering a future buy of an additional 100 to 150 fighters, a buying spree that could be worth $5 billion.

The F-16 is in the middle of every competition, but so are the McDonnell Douglas F-18, the French-made Mirage 2000-5, and the Swedish JAS 39 Gripen.

The Russian MiG 29 is also in the running but is considered a dark horse because of its history of reliability problems and a supply line that is considered less than dependable.

Experts say the manufacturer that wins the business will need to be not only technically superior but also flexible enough to do business in a region that is financially strapped.

U.S. defense industry officials are counting on another major factor to help them sell to Poland, Hungary and the Czech Republic – the importance the three countries place on integrating their air forces with those of NATO allies.

In the industry, it’s called “interoperability,” a fancy word for friendly countries using the same military weapons. The practice is said to ease everything from communications to mission planning to supply-line issues.

The F-16 already has seen the benefit of that effort. To date, NATO members have purchased 900 Falcons, giving the plane the moniker of “NATO Standard Fighter.”

“If you want to be a strong NATO ally, flying the NATO standard fighter makes a lot of sense,” said Doug Miller, Lockheed’s program director for Hungary.

There is one critical drawback to developing the central European markets: While their desires for new weapons are great, their financial resources are limited.

Defense officials in Poland, Hungary and the Czech Republic have said their defense budgets likely will increase 20 to 30 percent once admitted to NATO, and all want to buy new aircraft. But none has clear government approval to purchase new fighters, and it’s unclear how many they will be able to afford.

The Pentagon has a plan to help the incoming NATO nations gain access to American products even without funding. The Air Force and the Navy have offered leases on F-16s and F-18s at a low cost or free.

William Zimmerman, Lockheed’s program director for the Czech Republic, said leasing would allow each nation to fill a need it has now, while it worked on obtaining the funding for new aircraft later.

“It would be a transitional approach toward modernization,” he said.

The Pentagon appears to believe that each nation could get by with a smaller number of Western fighters than it is preparing to buy. A recent study recommended that each acquire 10 to 15 refurbished fighters.

But opponents of selling arms in the region say the Pentagon is helping contractors pander.

“We should be working with these countries on developing their economies, not pushing advanced weaponry on them,” said Natalie Goldring, deputy director of the British American Security Information Council. “Our manufacturers are playing exactly the same role that drug dealers play when they offer someone a free sample of a drug to try and get them hooked.”

Goldring questions why there needs to be a buildup of Western arms in the region at all.

“If the threat isn’t Russia, then what is it?” she asked. “If you don’t have a threat, why have a military alliance? Why talk about expanding that alliance at great cost?”


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