By Andrea Shalal-Esa and Joyce Lee
WASHINGTON/SEOUL, Sept 4 Boeing Co is
confident of winning South Korea's biggest defense deal, company
executives said, although defense sources said many in Seoul's
military establishment prefer rival Lockheed Martin Corp's
costlier stealth fighters.
Boeing's defense division president and chief executive
Dennis Muilenburg told the Reuters Aerospace and Defense Summit
in Washington on Tuesday that the U.S. company expects its F-15
Silent Eagle will help it clinch the $7.4 billion fighter
contract, with a decision expected within weeks.
"We're confident in the bid that we've provided. It's an
affordable bid and also a very capable bid," he said, noting
that the process still had to run its course.
As South Korea's biggest-ever defence program and one of the
world's largest military tenders this year, the fighter contract
is key not only to defense manufacturers like Boeing, Lockheed
and the Eurofighter consortium, it is also crucial to South
Korea's deterrence capabilities against the nuclear-armed North.
The new jets will allow the U.S. ally to partially replace
some 150 ageing F-4 and F-5 jets that South Korea plans to
retire starting in 2015, keeping pace with fighter upgrades
being undertaken by neighbors China and Japan.
Boeing's bid was the only one of three submitted that came
in below the price ceiling set by South Korea's arms procurement
agency, sources close to the process told Reuters last month.
South Korean officials involved in the process confirmed
that a final decision was expected this month after a
comprehensive assessment of all the bids. Only under-budget bids
can be selected, so unless a new tender is called Boeing is in
the box seat at this stage.
Even so, some in the South Korean defense establishment are
still rooting for Lockheed's F-35 and its stealth capabilities,
over Boeing's Silent Eagle and the Eurofighter consortium's
Two South Korean air force sources said the F-35 had strong
backing within the force, although they would not say so
publicly out of deference to the Defense Acquisition Program
Administration (DAPA) which is leading the decision on the
The sources declined to be identified as they were not
authorized to speak to the media.
"Japan has signed on to acquire F-35s, while China is
expected to place J-20 stealth fighters on the front lines in
2016," said Hahn Sung-chu, a retired air force major-general.
"Considering South Korea already has some 230
older-generation jets ... stealth is clearly a necessary feature
for anyone that has studied strategy."
If the jet program is delayed further to allow for a new
tender process, DAPA estimates that by 2019 the South Korean air
force will be 100 fighters short of the 430 jets deemed
necessary for it to maintain its combat capabilities.
"Many problems are foreseen if the program was restarted
without a clear reason, including a growing vacuum in combat
capability, restrictions on starting other projects due to the
delay of a large project, and the undermining of government
credibility," it said last week.
The deciding committee includes the minister of defense and
head of resources management, military leaders, independent
experts and lawmakers. Decisions are made by majority vote.
Members with army and navy backgrounds outnumber those
aligned with the air force, another factor that experts like
Hahn say could work in Boeing's favour.
President Park Geun-hye is expected to be briefed on DAPA's
review of the bids before the committee makes its final
Park leans more heavily on advisers with army backgrounds
than air force ones when it comes to military decisions.