WASHINGTON Dec 23 Britain's BAE Systems Plc
said on Monday it will hire 300 workers at its Fort
Worth, Texas, plant and other sites to upgrade over 130 South
Korean F-16 fighter jets after finalizing a deal with the U.S.
government it hopes to replicate in other places in Europe and
Asia in coming years.
BAE in 2012 beat out the maker of the jets, Lockheed Martin
Corp, for the upgrade work, which could be worth over $1
billion, according to South Korean media reports.
Historically the companies that make warplanes have also
serviced them and carried out major upgrades, but tighter
military budgets in the United States and Europe have spurred
arms makers to look for business in new areas, such as upgrade
work, since there are fewer major new acquisition programs.
Erin Moseley, president of BAE Systems' Support Solutions
sector, told Reuters the deal marked a significant expansion of
BAE's F-16 modernization business. She added the company was in
talks with other countries in Europe and Asia about similar
"A number of countries were watching to see if this model
could be successful," Moseley said, noting that BAE already does
about 40 percent of the work building and upgrading the avionics
on the jets.
The company also had a different cost structure than
Lockheed, which allowed it to be more "cost-effective," she
She said she expected BAE to land another F-16 upgrade deal
before the end of 2014, citing a potential market of over 3,000
F-16s that could eventually need upgrades.
"The options are endless, or close to it," Moseley said,
adding, "We believe F-16s are going to be there for quite some
time. It's going to be a great chance for a franchise."
She said some countries operating F-16s now were interested
in buying next-generation F-35 fighter jets, also built by
Lockheed, and were looking at upgrading their current F-16s
until those jets were available for delivery.
Upgrades also offered options to other countries that could
not afford the new jets, she said. BAE is one of the major
suppliers to Lockheed on the F-35 program.
BAE said it would begin work immediately on the first phase
of the deal, which is worth $200 million, and covers initial
design and development efforts.
The Pentagon's Defense Security Cooperation Agency notified
lawmakers that it had approved the F-16 upgrade sale last month.
The second phase, covered under a separate contract, would
kick off in 2014, covering the production and installation of
upgrade kits for South Korea's KF-16C/D Block 52 aircraft, BAE
said in a statement.
It said work on upgrading South Korea's F-16 fleet would be
done mainly at BAE's Fort Worth facility, but other sites in
Florida, New York, California and Virginia would also be