Lockheed: Trump’s ‘buy American’ emphasis unlikely to thwart potential F-16 Block 70 production in India

Lockheed Martin is still waiting for India to make a decision on its fighter jet competition. However, in the event of a win, the company feels assured its proposal to move the F-16 line to India won’t raise eyebrows with the Trump administration, despite the president’s focus on keeping jobs in the United States.

Earlier this year, Orlando Carvalho, executive vice president of Lockheed Martin’s aeronautics business area, said the company was keeping a close eye on what President Donald Trump’s comments would ultimately mean for the proposed move, which is seen as a key incentive for getting India onboard.

But during a June 20 interview at the Paris Air Show, Carvalho said Lockheed’s engagements with officials have bestowed some level of confidence that the administration will ultimately be supportive.

“We’ve briefed various members of the administration on the program, on what that program would mean for the United States and what it means for India, and throughout all of the briefings and discussions that we’ve done, we haven’t seen any resistance to the program by the administration,” he told Defense News.

“Given that, yes, for a short answer, we are feeling more comfortable with the administration. It doesn’t see this program as an issue.” After a lengthy competition, India in 2016 finally cemented an $8.85 billion agreement with French aerospace company Dassault for the Rafale. However, the contract for 36 aircraft did not fill the country’s initial requirement of 126 fighter jets, and late last year Indian defense officials said that a new contest had been initiated between Lockheed’s F-16 and Saab’s Gripen E.

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Although the timing of a deal remains uncertain, Lockheed appears to be intensifying its campaign to bring the F-16 to India. At Le Bourget on Monday, the company announced that Indian defense firm Tata Advanced Systems Limited would take over F-16 final assembly and check out if Lockheed ultimately wins the contract. Tata has previously worked with Lockheed, producing components for the C-130J airlifter and the S-92 helicopter.

While a letter of intent has been signed, the companies are still hammering out final terms. India could have the chance to pick up more elements of F-16 production at the subassembly or supplier level in the final deal, Carvalho said.

After Lockheed delivers the last F-16 to the Iraqi air force this year, it will have a two year break in production while it transfers its line from Fort Worth, Texas to Greenville, South Carolina. The company hopes to have deals with international customers in place to restart production them, but at that point there could be opportunities to broaden India’s participation on the program.

“There could easily be suppliers who don’t have a competitive way to re-establish or have difficulties or even could potentially not have an interest. So that could all present opportunities for possibility having that done in India,” he said. Even if the production line moves to India, Lockheed will retain about 6,000 jobs in the United States connected to the F-16, he added. The number of employees supporting final assembly is currently “in the hundreds,” so the company will be able to preserve most of its workforce. It also could keep its role manufacturing key parts of the aircraft, such as the forward fuselage, he said.

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As Lockheed clamors for new sales of F-16s, international demand for excess F-16s has also grown. However, the supply is not sufficient to meet customer needs, said Heidi Grant, deputy undersecretary of the Air Force for international affairs.

“As you see some countries going to the F-35, they may be willing to divest some of their F-16s, and there are partner nations out there that could use those excess. It’s more affordable within their defense budgets, so we’re working with many countries trying to make these transactions, third party transfers,” she said during a Monday briefing.

Lt. Gen. Arnold Bunch, the service’s military deputy for acquisition added that the service sometimes works with partner nations on alternative options.

“Not every country needs an F-16,” he said.

The demand for excess F-16s poses “a bit of a conundrum” for Lockheed, Carvahlo said. While the company would love to parlay that into sales of new F-16s, many times the countries seeking out those planes cannot afford new ones.

“The opportunity it presents for us is kind of somewhat limited for us, because the ability for those countries to come and purchase new airplanes is not easy,” he said, noting that lowering prices on the aircraft could be easier if a country like India is willing to make a large purchase, which would then open up cost-saving opportunities like economic quantity order buys.

 

 

 

 

Source:- Defense News.com

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