Dayton
Business Journal...
U.S.
military sales to foreign nations doubles
by Joe
Cogliano, Senior Reporter
Saturday,
January 28, 2012
Sales of
military weapons to foreign countries have risen dramatically in the
most
recent four-year period, with sales to top 10 buyers more than doubling
from
the previous period.
The 10
contries that bought the most U.S. military goods and services from
2007 to
2010 placed combined orders of $66.3 billion, up from $29.4 billion in
the 2003
to 2006 periods, according to data from the Congressional Research
Service.
While the
total sales are increasing, the mix of countries buying the most from
the U.S.
also is changing, with long-time allies Poland, Japan and Israel being
replaced
on the Top 10 list by a slew of Middle East nations. Countries from the
Middle
East now make up the largest chunk of the top buyers, and includes
Saudi
Arabia, U.A.E., Egypt, Iraq, Pakistan and Turkey.
During
roughly the same period, the U.S. was the top exporter of arms, selling
almost
a third of the military hardware that changed hands across the world.
The surge
in arms sales to the Middle East comes amid the backdrop of failed
negotiations
aimed at stopping Iran from continuing its nuclear program. Most
western nations
believe Iran is trying to build a nuclear weapon, whereas officials in
Tehran
have insisted their nuclear program is for domestic energy and medical
research
purposes only.
The overall
growth in foreign military sales comes at a good time for domestic
defense
companies as U.S. military cuts are looming.
“It allows
the continuation of production capability and advancement of technology
that,
in many ways to a degree, insulates the defense industry from ups and
downs,”
said Joe Zeis, vice president and chief strategist for the Dayton
Development
Coalition .
“That’s important for our
national industrial infrastructure.”
At the end
of December, the U.S. confirmed it would sell 84 Boeing
F-15 fighter jets to Saudi Arabia for
$30
billion. The White House said the deal would support more than 50,000
U.S.
jobs. While it is unclear as to how many of those jobs are located in
the
Dayton area, Boeing has a big impact in the Dayton region, where it has
23
different suppliers based on its 2010 annual report. The aerospace
giant has
roughly 500 suppliers in Ohio and spent more than $4.7 billion in
purchases
from Ohio companies in 2010, supporting an estimated 150,000 jobs in
the state.
Boeing, which has an office in Dayton, has 600 employees in Ohio and
more than
6,600 retirees.
In late
2010, the U.S. Department of Defense announced it had notified Congress
of the
multi-year deal to sell more than $60 billion in aircraft and weapons
systems
to Saudi Arabia. The sale to Saudi Arabia’s government would include 84
F-15SA
aircraft, a variety of helicopters, engines, missiles, bombs, radar and
other
systems.
And reports
say tensions with Iran have sparked other foreign military sales such
as a
recent $3.5 billion advanced antimissile interception system to the
United Arab
Emirates and a $1.7 billion deal to upgrade Saudi Arabia’s Patriot
antimissile
missiles. Lockheed Martin Corp.
and
Raytheon Co. are
involved on providing
the components for those deals, according to Reuters. Lockheed also has
deals
worth more than $1.4 billion to sell F-16 fighter jets to Oman and
Iraq, and
Boeing makes the new bunker-busting bombs the U.S. is selling to the
United
Arab Emirates.
Reuters
also reports that Israel is going to be the first nation to buy the
modern F-35
Joint Strike Fighter developed by Lockheed, Northrop Grumman Corp. and
BAE Systems, all three of which have
operations in the Dayton region.
Many of the
sales of jet aircraft will have a direct impact on Dayton through GE
Aviation’s
facilities in the region that make parts for jet engines. GE Aviation,
a unit
of General Electic, has roughly 3,500 employees in the Dayton region
and
southwest Ohio, including a manufacturing plant in Beavercreek that
employs
more than 300 workers and makes tubes, ducts and manifolds for jet
engines.
The Top 25
largest defense contractors account for 4,200 Dayton-area employees and
more
than $900 million in combined local DoD contract awards in the most
recent
year, according to the Dayton Business Journal’s Book of Lists.
As more
nations line up to buy high-tech weapons from the U.S., it also
provides a
boost to operations at Wright-Patterson Air Force Base
in Dayton. Wright-Patt is host to the
Air
Force Security Assistance Center, or AFSAC, which employs more than 500
to facilitate
aircraft sales to allied countries.
Here’s how
AFSAC works:
An allied
country submits a request for an aircraft to a diplomat, the White
House,
directly to the U.S. Air Force or by other avenues and that request
eventually
ends up at AFSAC. The Air Force decides if it wants comply with the
aircraft
request and then figures out where to get it.
AFSAC then
works to determine a cost, whether excess aircraft exist or if a
purchase order
will be made with a manufacturer, such as Maryland-based Lockheed
Martin Corp.
From there, the center’s officials contact the country and work out a
purchase
plan. Following the deal, AFSAC also can manage maintenance and parts
supply
for the aircraft.
The center
also makes sure everyone is playing by the rules, such as following the
Arms
Export Control Act, which requires weapons from the United States be
used only
for legitimate self-defense. Officials say the entire operation works
with
allied security in mind and the U.S. does not profit from the venture.
Read this
and other articles at Dayton Business Journal
|