U.S. firms ma­neu­ver to build fighter jets in In­dia

Trump fo­cus on do­mes­tic jobs casts doubt on plan to shift work out of Texas

The Washington Post - - FRONT PAGE - BY AN­NIE GOWEN

new delhi — As a new Amer­i­can pres­i­dent bent on re­tain­ing Amer­i­can jobs pre­pares to take of­fice, the Obama ad­min­is­tra­tion and the U.S. de­fense in­dus­try are work­ing on a deal with the In­dian gov­ern­ment to build iconic U.S. com­bat air­craft in In­dia.

In re­cent months, Lock­heed Martin and Boe­ing have made pro­pos­als to the In­dian gov­ern­ment to man­u­fac­ture fighter jets — the F-16 Fight­ing Fal­con and the F/A-18 Su­per Hor­net — in In­dia as the coun­try seeks to mod­ern­ize its rapidly ag­ing fleet of largely Rus­sian-built air­planes.

In both cases, the avi­a­tion com­pa­nies would be build­ing pro­duc­tion fa­cil­i­ties in In­dia; Lock­heed Martin pro­poses to move its en­tire F-16 assem­bly line from Texas to In­dia, mak­ing In­dia the sole pro­ducer of the sin­gleengine com­bat air­craft.

The U.S. mil­i­tary is phas­ing out the F-16 for its own use, but other coun­tries re­main as likely cus­tomers.

The pro­pos­als have the strong back­ing of the Obama ad­min­is­tra­tion, which has sought a closer con­nec­tion with the In­dian mil­i­tary in re­cent years. Air Force Sec­re­tary Deb­o­rah Lee James said she was “op­ti­mistic” about the prospect of a deal af­ter a visit to New Delhi in Au­gust, and De­fense Sec­re­tary Ash­ton B. Carter is set to re­turn to In­dia this week, with pro­cure­ment high atop the list of dis­cus­sion top­ics.

But the elec­tion of a bil­lion­aire

busi­ness­man fo­cused on keep­ing jobs at home, rather than cre­at­ing them over­seas, has brought a mea­sure of un­cer­tainty to the talks.

“What will be the U.S. pol­icy pos­ture now that the new pres­i­dent-elect is in the mix?” said one high-level of­fi­cial at an Amer­i­can de­fense firm in In­dia, who spoke on the con­di­tion of anonymity to dis­cuss in­ter­nal ne­go­ti­a­tions. “Is he go­ing to con­tinue the pol­icy of en­gag­ing in In­dia on co­pro­duc­tion and co-de­vel­op­ment? All of those are un­known at this point.”

On Thurs­day, Pres­i­dent-elect Don­ald Trump ap­peared at a Car­rier plant in In­di­ana, where his team had bro­kered a deal to save about 1,000 jobs, and on Sun­day he let fire a se­ries of tweets that im­plied a new tax penalty on goods pro­duced by com­pa­nies that leave the United States.

“Please be fore­warned prior to mak­ing a very ex­pen­sive mis­take! THE UNITED STATES IS OPEN FOR BUSI­NESS,” he tweeted.

On the cam­paign trail he railed against job losses to Asia and Mex­ico.

“We are liv­ing through the great­est jobs theft in the world,” Trump said last month, cit­ing Amer­i­can com­pa­nies that have laid off work­ers and moved jobs to In­dia, Sin­ga­pore and Mex­ico. “It’s get­ting worse and worse and worse.”

Of­fi­cials at Lock­heed Martin and Boe­ing said that any part­ner­ship to man­u­fac­ture jets in In­dia would not re­sult in a net loss of Amer­i­can jobs but would cre­ate In­dian em­ploy­ment — about 1,000 po­si­tions in the case of Lock­heed Martin.

About 300 me­chan­ics on the Fort Worth assem­bly line would be moved to the F-35 assem­bly line at the same plant. Oth­ers would be given an op­por­tu­nity to ap­ply for other jobs on the newer F-35, Lock­heed of­fi­cials said, although they con­cede that some po­si­tions would be lost in the move be­cause of at­tri­tion or re­tire­ments.

“I see this as a great op­por­tu­nity for all par­ties in­volved,” said Randy Howard, di­rec­tor of busi­ness de­vel­op­ment for Lock­heed’s in­te­grated fighter group. “It doesn’t take jobs away from the U.S., it ex­tends ex­ist­ing jobs, and not just for Fort Worth but for many other com­pa­nies around the U.S. that build parts for the F-16.”

Nev­er­the­less, work­ers in Fort Worth say they are wor­ried about the fu­ture.

“Wouldn’t you be?” said Earnest Boone, pres­i­dent of the Dis­trict Lodge 776, In­ter­na­tional As­so­ci­a­tion of Ma­chin­ists and Aero­space Work­ers, which rep­re­sents Lock­heed em­ploy­ees.

In Oc­to­ber, the In­dian gov­ern­ment sent a let­ter to for­eign mis­sions and aero­space man­u­fac­tur­ers in­quir­ing about sin­gleengine fighter air­craft that could be man­u­fac­tured lo­cally.

In­dia wants to co-pro­duce the fighter jets as part of its Make in In­dia pro­gram, which has the lofty goal of ex­pand­ing the man­u­fac­tur­ing base to 25 per­cent of the gross do­mes­tic prod­uct in the next six years.

Nitin Wakankar, a spokesman for In­dia’s Min­istry of De­fense, said that the process of se­lect­ing the new jet “has not started yet,” so an­swer­ing de­tailed ques­tions would be pre­ma­ture.

In­dia’s costly ear­lier ef­fort to part­ner with the French com­pany Das­sault Avi­a­tion for 126 jets un­rav­eled, and the gov­ern­ment ended up buy­ing only 36 ready­made Rafale planes this year.

An­a­lysts say Lock­heed’s main ri­val in the sin­gle-en­gine sphere is Swe­den’s Saab Group and its Gripen fighter. Chicago-based Boe­ing also has pro­posed to make its twin en­gine F/A-18 in In­dia. Boe­ing re­cently took a group of In­dian de­fense jour­nal­ists on a whirl­wind tour of Aus­tralia and the United States to show off its pro­gram.

The U.S. Air Force is phas­ing out the F-16 in fa­vor of the F-35 air­craft in com­ing years and the com­pany has no or­ders for the F-16 be­yond Oc­to­ber 2017, but it is seek­ing other cus­tomers and does not plan to dis­man­tle the assem­bly line just yet.

The F-16 air­plane re­mains one of the most widely used air­craft in the world, and Lock­heed is con­tin­u­ing to ne­go­ti­ate deals to sell the fighter to other coun­tries. Those F-16s would be made in In­dia un­der the deal once the new assem­bly line was up and run­ning, Howard said. The air­craft has been made in joint ven­tures with other na­tions be­fore, but “we’ve never of­fered our only pro­duc­tion line to an­other coun­try,” Howard said. “It’s un­prece­dented.”

Lock­heed has promised that In­dia would not only man­u­fac­ture and ex­port its jets, but it also would play a “crit­i­cal role” in sup­port­ing a fleet of about 3,200 F-16s in op­er­a­tion around the world, said Jon Gre­vatt, an Asia Pa­cific de­fense in­dus­try an­a­lyst with IHS Jane’s, a de­fense anal­y­sis firm. “That’s a big car­rot,” he noted.

A po­ten­tial stum­bling block to the deal is the will­ing­ness of the U.S. gov­ern­ment to part with enough of its mis­sion sys­tem tech­nol­ogy to make the pack­age palat­able to the In­di­ans. The air­craft is viewed neg­a­tively by some in the de­fense es­tab­lish­ment here as a dated plat­form that first rolled off the assem­bly line in 1978 — de­spite its cur­rent sta­teof-the-art avion­ics. An­other strike against it, for some, is that it is the fighter air­craft used by archri­val Pak­istan.

“The F-16 is a good air­craft, it has lived its life, but its time is over,” said Muthu­man­ickam Matheswaran, a re­tired In­dian air force air mar­shal and an­a­lyst.

A greater con­cern, said Pushan Das, a fel­low at the Ob­server Re­search Foun­da­tion in Delhi, is whether “In­dia wants to be seen as close to the United States and build­ing U.S. fighter air­craft, or does it want to be more po­lit­i­cally neu­tral and choose a part­ner like Swe­den, given the fact that New Delhi needs to man­age its re­la­tion­ship with Rus­sia and China. That’s the main thing.”

In­dia’s de­fense pro­cure­ment typ­i­cally moves at a glacial pace. Ashley J. Tel­lis, a scholar for the Carnegie En­dow­ment for In­ter­na­tional Peace, wrote in a March pa­per that the In­dian air force is in “cri­sis” and that its trou­bled ac­qui­si­tion and de­vel­op­ment pro­grams threaten its air su­pe­ri­or­ity over rapidly mod­ern­iz­ing ri­vals Pak­istan and China. The coun­try hopes to ex­pand its fleet from 36.5 squadrons to as many as 45 squadrons by 2027 — an un­likely prospect, the study found, be­cause of bud­get con­straints, slow pro­cure­ment and other lim­i­ta­tions.


F-16 air­craft from the U.S. Air Force Thun­der­birds fly dur­ing an air show at the Krzesiny air­port in Poland. The fighter plane, flown by air forces around the world, could soon be made only in In­dia.

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