BAE Systems secures $1bn contract
to upgrade South Korean fighter jets
Much-needed boost for British-based
defence firm, although work will be carried out in Forth Worth, Texas
Jennifer Rankin
The Guardian, Monday 23 December 2013
13.44 EST
BAE Systems has secured a $1bn (£611m) contract to
upgrade South Korea's fleet of F16 fighter jets, in a fillip for the UK arms manufacturer after it lost out on a much
more lucrative deal with the United
Arab Emirates.
However, there will be no direct benefit
for BAE workers in Britain,
where the company employs 34,000 people. BAE said it would hire 300 people at
its plant in Fort Worth, Texas,
to install new cockpit electronics systems, after getting the green light from Korea and the United States government, which
licenses the sale of the aircraft.
The deal is a coup for BAE, which beat the
F16's manufacturer, US defence group Lockheed Martin, for the contract to
upgrade the planes, provide training and logistical support. It was also
welcome news for BAE after the collapse of a £6bn deal to provide fighter planes
to the UAE, and the decision to end shipbuilding in Portsmouth last month. Despite BAE's UK activities grabbing headlines recently, the US remains the
group's largest market.
BAE will be upgrading computers, displays,
sensors and weapons on South Korea's
130-strong fleet of F16s, an aircraft built in the US
in 1976 that has been involved in numerous conflicts, from sorties in the first
Gulf War to enforcing the no-fly zone in Libya.
A BAE spokeswoman declined to confirm the
value of the contract, but the company has not denied South Korean media
reports that the deal is worth $1.1 bn (£670m). The first phase of the work, on
design and development, is worth £200m, according to the US Defence Security
Cooperation Agency.
"For us it is pretty strategically
important, because the aircraft providers usually get the contract for
maintenance of the aircraft," the spokeswoman said.
The company now hopes to strike similar
deals in continental Europe and Asia. BAE said
a number of countries had expressed interest, but declined to give further
details.
As well as being one of the main combat
jets of the US airforce, the
F16 is used by more than two dozen other countries, including Belgium, China,
Iraq, Israel and Venezuela.
BAE's share price rose 1.8% on Monday to
429.7 pence, not enough to recoup Friday's losses when the stock dropped almost
4% on news of the failed UAE deal. The company is striving to bolster an order
book that has been depleted by defence cutbacks in the US and the UK, its two largest markets.
Such was the importance of a UAE deal,
BAE's chief executive, Ian King, said an agreement would be a "major game
changer" for the company.
The UK arms manufacturer revealed after
the market closed on Thursday that more than a year of talks to supply 60
Typhoon aircraft to the UAE had failed, despite two visits from prime minister
David Cameron.
The prime minister was left embarrassed
after the crown prince of Abu Dhabi, Sheikh
Mohammed bin Zayed Al Nahyan, opted for a rival fighter jet produced by France's
Dassault Systèmes.
The F16 also made headlines recently when US
aerospace group Boeing revealed it had retrofitted
retired F16s, so they could fly without a pilot.
South Korea
Alexander
Vershbow was the U.S.
ambassador for South Korea,
the U.S.
ambassador for NATO, an assistant secretary for
the U.S. Department of Defense, and is the
deputy secretary general for NATO.
Note: Ivo
H. Daalder is the U.S.
permanent representative for NATO, and was a
senior fellow at the Brookings Institution
(think tank).
Foundation
to Promote Open Society was a funder for the Brookings
Institution (think tank), and the Committee
for Economic Development.
George Soros
is the chairman for the Foundation to Promote Open
Society, and the founder & chairman for the Open Society
Foundations.
Open
Society Foundations was a funder for the Atlantic
Council of the United States
(think tank).
Lee H.
Hamilton is an honorary trustee at the Brookings Institution
(think tank), and a director at BAE Systems Inc.
Stephen
W. Bosworth is a trustee at the Committee for Economic
Development, and was a U.S.
ambassador for South Korea.
Linda P.
Hudson was a director at the Atlantic Council of the United States
(think tank), and is the president & CEO for BAE Systems Inc.
Anthony
C. Zinni was a director at the Atlantic Council of the United States
(think tank), and is director at BAE Systems
Inc.
BAE
Systems Inc. is a contractor for the National Security Agency
(NSA).
Boeing
Company is a contractor for the National Security Agency
(NSA).
Keith
B. Alexander is a director at the National Security Agency
(NSA), and a friend of Barbara G. Fast.
Barbara
G. Fast is a friend of Keith B. Alexander,
was a VP for the Boeing Company, and a VP for the CGI Group Inc.
CGI
Group Inc. was the Obamacare
contractor that developed Healthcare.gov web site.
Donna S.
Morea was the EVP for the CGI Group Inc.,
and a trustee at the Committee for Economic
Development.
W.
James McNerney Jr. is the chairman & president & CEO for the Boeing Company,
and a member of the Commercial Club of Chicago.
Commercial Club of Chicago, Members Directory
Please note: This link for the members of
the Commercial Club of Chicago can no longer be found.
William
M. Daley is a member of the Commercial Club of Chicago,
was the chief of staff for the Barack Obama
administration, and a director at the Boeing
Company.
R. Eden
Martin is the president of the Commercial Club of Chicago,
and counsel at Sidley Austin LLP.
Michelle
Obama was a lawyer at Sidley Austin LLP.
Barack Obama
was an intern at Sidley Austin LLP.
Newton N.
Minow is a senior counsel at Sidley Austin LLP,
and a member of the Commercial Club of Chicago.
Robert
S. Osborne is a member of the Commercial Club of Chicago,
and the EVP & general counsel for Booz Allen Hamilton.
Edward
Snowden was an employee at the Booz Allen Hamilton,
and leaked information about the National Security Agency
(NSA).
Booz
Allen Hamilton is a contractor for the National Security Agency (NSA).
Boeing
Company is a contractor for the National Security Agency
(NSA).
BAE
Systems Inc. is a contractor for the National Security Agency
(NSA).
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