European defense firm challenging US for access to S. Korean market

Posted on : 2013-04-06 13:11 KST Modified on : 2019-10-19 20:29 KST
American companies have the inside track due to the alliance between South Korea and the US
 4 x AMRAAM air-to-air missiles
4 x AMRAAM air-to-air missiles

By Kim Kyu-won, staff reporter

The European Aeronautic Defence and Space Company (EADS) is challenging the US as a candidate to provide South Korea's third batch of next-generation fighters (FX).

The company reached an agreement with the Defense Acquisition Program Administration (DAPA) to assemble 48 of the 60 aircraft in South Korea if the country chooses its Eurofighter Typhoon.

Baek Yoon-hyung, a spokesman for DAPA, mentioned the agreement on Apr. 5, saying that technical negotiations had ended and a fifth round of offset talks were underway.

"EADS has agreed to do the final assembly of the Eurofighter in South Korea," Baek said, adding that negotiations on the number to be assembled had not yet concluded.

Eurofighter confirmed the deal, saying it had agreed to assemble 48 aircraft in South Korea.

The deal could be seen as a challenge from the company, which is seen as being at a disadvantage in the FX selection process due to the close relations between South Korea and the US. During a recent work report to the President, the Ministry of National Defense said it would make a decision by this June. The assemblage of 48 of the 60 planes in South Korea is part of the 50% offset terms for the FX project.

If EADS does assemble 48 of its 4.5-generation fighters in South Korea, it could not only create jobs but also provide technical know-how to the aerospace industry. Lee Seon-jae, vice president of EADS's public relations agency in Korea, explained that the project would help develop the industry by providing assembly line development and performance experience, parts and materials analysis, and parts supplies.

"It could also be tied to the Boramae [KFX fighter jet] project," Lee added.

Korea Aerospace would handle the assembly in South Korea.

Baek confirmed that the US company Boeing, which proposed its own F-15SE model, made an offer to produce some of the parts in South Korea. But Lockheed Martin, which proposed its state-of-the-art F-35A stealth fighter, still hasn't made any known technology transfer offers.

Baek said that talks on technology transfer and contractual conditions had finished and that a fifth round of offset negotiations was under way.

Meanwhile, the Defense Security Cooperation Agency (DSCA), an arm of the US Department of Defense that oversees foreign sales of US military materials, announced on its website that the South Korean government had expressed its intent to purchase 60 F-35s and 60 F-15Ss as a foreign military sale (FMS), and that the US Congress had been notified accordingly.

Baek advised against reading too much into this, explaining that Congress must be notified or asked for approval whenever a US company sells weapons overseas.

"This is standard procedure. Don’t blow it out of proportion," he said.

The third FX project involves purchasing 60 fighter planes for a total of 8.3 trillion won (US$7.3 billion). The provider selection process is set to finish by June.

Please direct questions or comments to [english@hani.co.kr]

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