21 February 2006
Business: International
US warplane makers see stiff competition
- By Christopher Torchia
Singapore, Feb. 20: When US aerospace giant Boeing Co. won a bid in 2005 to supply at least a dozen fighter jets to Singapore, its defeated French rival said America's superpower status had influenced the outcome.
"Bamboo always leans the way it's pushed the hardest," Dassault Aviation said in a statement that cited a Chinese proverb to argue Washington's political muscle had swayed Singapore, a close US ally. The setback echoed a bitter loss for Dassault in 2002 in South Korea, another staunch American ally that chose 40 F-15K fighter jets from Boeing over the French Rafale combat aircraft. Singapore, which hosts one of the world's biggest defence and aerospace conventions from February 21, said its procurement process was rigorous and objective. But as China develops its own aircraft and as a mega-deal for combat aircraft looms in India, the case recalled the murky mix of political, financial and military factors that often shapes major arms deals long after the Cold War.
China, a growing rival to the United States in the Asia-Pacific region, is off-limits to the US defence industry. Meanwhile, India wants 126 combat aircraft for an air force that has traditionally relied on Russian and, to a lesser extent, French and British planes.
"India is a very lucrative market for any arms supplier. Nobody buys like India does," said Rahul Bedi, a New Delhi-based analyst for the independentJane's Information Group. The deal is worth at least $8 billion.
Some contenders for the Indian contract, including Seattle-based Boeing, USrival Lockheed Martin Corp., Bethesda, Md., and Sweden's Gripen, will be at this week's Asian Aerospace fair.
Organisers said they will host the next exhibition in Hong Kong in September 2007 because the city is a gateway to China's booming aviation market.
Some experts say the most sophisticated fighter jets have similar features,and that political influence can play a big role in how governments choose their weapons. Singapore said its selection of Boeing's F-15SG jets, to be delivered in 2008-2009, was apolitical.
"We have used the same procurement system to evaluate the contracts for the La Fayette frigate, Aster missiles and Thales multi-function radar, which French defence suppliers competed for and won," Singapore's defence ministry said in a statement. Dassault acknowledged that a weak US dollar at the time made the French offer less competitive.
Still, makers of the Gripen fighter jet, a relative newcomer in the international market, are casting themselves as a neutral partner for traditional US allies concerned about perceived bullying in American foreign policy since the September 11, 2001, terrorist attacks.
"Now there's a view: Maybe we want to keep our special relationship with America, but have a second option as well," said Bob Kemp, Gripen's head of international sales.
Mr Kemp said some nations felt they were in a "challenging position" because of a US foreign policy characterised by President Bush's comment:"Either you are with us, or you are with the terrorists."
Gripen views Thailand - a leading importer of US arms that is assessing whether to buy Swedish, American or Russian jets - as a test case of a country's willingness to deal with alternative suppliers.
Thai military officials have said they are more confident about maintenance of US or Russian aircraft because they are more popular worldwide.
China has a long history of buying Russian military planes, and is developing its own aircraft. Despite US pressure, some European Union leaders want to scrap an EU arms embargo imposed on China after its communist leaders crushed pro-democracy rallies in Beijing's Tiananmen Square in 1989. The US defence department believes Chinese military planners want to expand their influence beyond their immediate goal of dominating Taiwan, a theory China rejects as Washington's excuse to sell more weapons to the self-ruled island claimed by Beijing.
"US policy-makers won't let US (defence) companies send a bolt to China," said Matthew Schroeder, who monitors arms sales for the Federation of American Scientists, a Washington-based research group. (AP)