EADS offers to manufacture 48 Eurofighters in S. Korea
The European Aeronautic Defense and Space Company (EADS), which is competing with U.S. companies Boeing and Lockheed Martin for South Korea's fighter jet program, has offered to manufacture 48 out of 60 planes in local factories if it wins the multi-billion dollar deal, sources and company officials said Friday.
The multinational defense firm EADS's Eurofighter Tranche 3 has been bidding with Lockheed Martin's F-35 stealth jet and Boeing's F-15 Silent Eagle for the 8.3 trillion won (US$7.3 billion) contract to replace the South Korean Air Force's aging fleet of F-4s and F-5s from 2016.
The Defense Acquisition and Procurement Agency (DAPA) has already completed the first round of negotiations with Boeing and EADS over pricing, officials said, while Lockheed Martin, which offers the F-35 through the Foreign Military Sales program, is still in consultations.
With negotiations over other conditions, including technology transfer and delivery time, nearing completion, EADs has recently proposed raising the number of Eurofighters to be built in South Korea.
"Procurement officials and EADS officials have negotiated over the number of aircraft to be produced in the nation for nearly two years," a military source said, citing ongoing negotiations. "EADS, which had initially proposed to manufacture 30 planes in South Korea, has recently decided to increase the number."
EADS officials confirmed that the company has made the higher offer with promises of technology transfer needed to build the airplanes.
It means only 12 fighter jets will be imported, while 48 units will be built by the Korea Aerospace Industries if the Eurofighter Tranche 3 wins the deal, which is expected to boost the job market.
"About 10,000 jobs were created when four European nations manufactured Eurofighters," a senior EADS official said. "If South Korea produces Eurofighters, it could annually create some 20,000 jobs in the next five years."
If selected, analysts forecast expansion of local production is also expected to help a long-delayed project to develop South Korea's indigenous fighter jets.
First launched in 2002 to build F-16 class fighter jets, Seoul's ambitious plan to develop fighter jets in the next decade has been delayed as local think tanks and experts question the feasibility of the multi-billion dollar project as well as the technical aspects to domestically produce aircraft and meet overseas demand.
Many have been calling on the Park Geun-hye administration to promptly make a decision to either go ahead with the large-scale airplane development project or put on the brakes if it is deemed economically unsustainable.
While the fighter jet procurement project hit a snag under the Lee Myung-bak administration, military leaders under the current government pledged to proceed with big weapons procurement projects without delay to deal with the growing threat from North Korea.
Under the circumstances, the DAPA is expected to pick a contractor by June. In a parliamentary meeting on Thursday, Defense Minister Kim Kwan-jin also said he briefed President Park about the plan to strike a deal in the first half of the year.
Meanwhile, the U.S. Department of Defense on Wednesday said it has approved the sale of either F-35 or F-15 Silent Eagle fighters to South Korea.
The Defense Security Cooperation Agency, which oversees foreign military sales, notified U.S. lawmakers last Friday about the possible deal with South Korea, saying that American combat jets would help Seoul "deter aggression in the region" amid high military tensions with North Korea.
Source: By Kim Eun-jung / SEOUL, Yonhap News – 5 April 2013
Photo: The EDA Air Force EADS Eurofighter Tranche 3 Fighter Aircraft (Photo by businessinsider.com)