Obama team appears bullish on arms exports: Boeing

WASHINGTON Wed Jun 10, 2009 6:05pm EDT

Photographed through a teleprompter, President Barack Obama calls for restoring statutory pay-as-you-go (PAYGO) requirements as he speaks at an event in the East Room of the White House in Washington June 9, 2009. REUTERS/Kevin Lamarque

Photographed through a teleprompter, President Barack Obama calls for restoring statutory pay-as-you-go (PAYGO) requirements as he speaks at an event in the East Room of the White House in Washington June 9, 2009.

Credit: Reuters/Kevin Lamarque

WASHINGTON (Reuters) - President Barack Obama's administration appears even more disposed to permit exports of advanced U.S. arms than that of President George W. Bush, a senior Boeing Co executive said Wednesday.

"I think we see a more active discussion on those things," Chris Raymond, vice president of business development for Boeing's military arm, told a briefing ahead of next week's Paris Air Show.

The Obama administration's interest in building the military capabilities of potential coalition partners seems to be "more of a conscious thought and discussion right now than maybe it has been in the past," Raymond said.

"So I think that all bodes well for our allies and the discussions that would take place on things they'd like to have -- on releasability around some of those things," he added.

Under Bush, the value of worldwide U.S. government-to-government arms agreements rose nearly 50 percent to $24.8 billion in 2007 -- accounting for 41.5 percent of all such deals.

The top five buyers were Australia, Turkey, Egypt, the United Arab Emirates and Iraq, according to a report on October 23, 2008 by Richard Grimmett of the nonpartisan Congressional Research Service.

U.S. arms sales involve complex tradeoffs. Among issues weighed by the administration and Congress are regional stability calculations, U.S. business interests and keeping cutting-edge military knowhow from leaking to third parties.

Michele Flournoy, the new undersecretary of defense for policy, underscored the administration's commitment to concerted action last month.

Washington could use targeted arms sales to help partners boost their capacity to deal with perceived threats such as Iran's missile program, she said.

"When we look at the full range of security challenges that we face -- terrorism, proliferation, economic security issues, climate change -- there is not a single one that the United States alone can deal with effectively," Flournoy said.

"You need coalitions and partners to deal with these challenges."

GREAT TIME FOR FIGHTER BUSINESS

Boeing's Integerated Defense Systems -- the top U.S. exporter's military business -- expects to report revenue of $34 billion in 2009, up from about $32 billion in 2008, Raymond said.

This would remain about 50 percent of Boeing's total revenue, with commercial aircraft making up the other half.

Bob Gower, manager of Boeing's F/A-18 fighter program, said this was a "great time" to be in the fighter business.

There could be decisions this year on competitions in Brazil, Denmark and Greece in which the F/A-18E/F Super Hornet is vying against rival warplanes, he said.

Another Boeing fighter, a proposed F-15 "Silent Eagle" featuring special coatings to reduce its radar signature for export clients, is projected to be flying by next year, in time for a planned South Korean competition.

Everything about the new F-15 is "internationally focused," Brad Jones, the program manager, told the briefing. Boeing has been in discussions with potential co-development partners, he said, but declined to name any of them.

The extent to which the aircraft's radar cross-section may be reduced hinges on what the U.S. government is willing to release for export, Jones added.

"The question is really not how low can you go," Jones said. "It's really how low are you allowed to go."

Boeing executives said they see opportunities for the planned new F-15 to compete for Middle East and Asia sales against Lockheed Martin Corp's multinational F-35 Joint Strike Fighter, which is in the early stages of production.

(Reporting by Jim Wolf; editing by Ted Kerr)