U.S. warplane makers in dogfight with rivals

/ Source: The Associated Press

When U.S. aerospace giant Boeing Co. won a bid last year 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 U.S. 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 French Rafale combat aircraft.

Singapore, which hosts one of the world's biggest defense and aerospace conventions from Feb. 21-26, 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 U.S. defense 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 independent Jane's Information Group. The deal is worth at least $8 billion.

Some contenders for the Indian contract, including Seattle-based Boeing, U.S. rival Lockheed Martin Corp., Bethesda, Md., and Sweden's Gripen, will be at this week's Asian Aerospace fair.

Organizers 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 defense suppliers competed for and won," Singapore's defense ministry said in a statement.

Dassault acknowledged that a weak U.S. 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 U.S. allies concerned about perceived bullying in American foreign policy since the Sept. 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.

Kemp said some nations felt they were in a "challenging position" because of a U.S. foreign policy characterized by President Bush's comment: "Either you are with us, or you are with the terrorists."

Gripen views Thailand - a leading importer of U.S. 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 U.S. 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 U.S. 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 U.S. Defense 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.

"U.S. policy-makers won't let U.S. (defense) companies send a bolt to China," said Matthew Schroeder, who monitors arms sales for the Federation of American Scientists, a Washington-based research group.

Doug Kennett, a Boeing spokesman in Washington, said the government decides where U.S. companies can sell military equipment abroad under the Foreign Military Sales program.

India had tense relations with the United States, and got most of its military planes from the former Soviet Union. Now ties are better: New Delhi and Washington are working on a civilian nuclear deal between their governments, and Bush plans to visit India next month.

The bidding process is expected to take several years. Bedi, the Jane's analyst, said India might request an additional 50 or 60 planes for its navy, and that it could decide to split the order _ among the Americans, the Russians or the French.

Analysts believe India is likely to be wary of the United States as a sole supplier, since Washington imposed sanctions on India in 1998 after it conducted nuclear tests. The restrictions were later lifted.

"The Americans are making a huge push into India," Bedi said of U.S. efforts to win the air force deal. "They're pulling out every single stop that they can to push their wares."