Defense

April 26, 2012

Foreign military sales make partnerships strong, keep production lines hot

by C. Todd Lopez
Army News
Courtesy photograph
Two UH-60M helicopters were delivered to Sweden as part of an ongoing Foreign Military Sales case to support the Sweden armed forces. The helicopters depicted are folded for transport in December from Huntsville, Ala., to Linkoping, Sweden.

On the Arabian Peninsula, the Saudi government has purchased $17 billion in military hardware from the United States.

But they don’t buy it directly from manufacturers like Boeing or Sikorsky, they buy it instead through U.S. government intermediaries, like the Army’s Security Assistance Management Directorate.

The Saudis have purchased for their Royal Saudi Land Forces and Saudi National Guard UH-60 Black Hawk, CH-47 Chinook and AH-64 Apache helicopters, as well as the light-weight MD 500 helicopter.

“There’s full suite of our aircraft going in for Saudi Arabia,” said Jeff Young, director for the Army Aviation and Missile Command’s security assistance management directorate. Young referred to the deal as a “mega sale.”

Also in the region, he said, the first sale of the Terminal High Altitude Area Defense, or THAAD, missile system has been made to the United Arab Emirates. And on the other side of Asia, the Taiwanese signed a $4.1 billion deal for the Patriot Missile system. “Our most popular, one of our most capable systems,” Young said.

Young’s directorate deals in missile and aviation sales to the militaries of America’s allies. In the first five months of fiscal year 2012, they managed some $11.8 billion in sales, and managed more than 870 FMS cases worth $62.3 billion dollars in more than 160 countries.

 

‘Total package approach’

The Army manages sales of an entire array of equipment to allies, including things the Army uses, such as the Black Hawk and the Apache, “one of our biggest sellers,” Young said, as well as “non-standard” equipment that the Army never used, or that is no longer in use. The UH-1 Iroquois, or “Huey” is considered non-standard now.

But it’s not just equipment sales Young deals in. There are also training and maintenance packages that come with the sales. And the benefits aren’t just to the buyer, they go all around. With FMS, the buyer gets new equipment and guidance, the manufacturer gets increased sales, and the United States strengthens its military-to-military ties with the new owner through training opportunities and increased equipment interoperability.

“By selling equipment, we are able to enable the strategic goals of the United States,” Young said. “The State Department will decide what kinds of capabilities that we want certain countries to have, and then they will ask us in turn to enable those capabilities, with equipment, with training and with maintenance.”

Young said his directorate always tries to broker deals with a “total package approach.”

“We sell to them the hardware, along with training to go with it, training by our people,” he said.

 

Keeping lines open

There’s financial benefit to FMS as well, and not just to the manufacturer of the equipment.

“One of the other big reasons from an economic point of view for us to continue to sell equipment to foreign nations is that it allows us to keep our production lines open,” Young said. “FMS allows us to keep the industrial base hot all the time.”

Keeping an aircraft’s production line “hot” means that the production line, and the expansive network of sub-contractors and sub-sub-contractors that supply that production line with parts, is always moving, always producing a new airframe. When there are no more buyers for the aircraft, that manufacturing system can’t stay open long. It’s expensive to keep laborers employed and systems in place to produce an aircraft that nobody wants to buy any more. And once that system shuts down, it’s difficult to start it back up.

“It costs a lot of money to rehire, retool lines to start production up,” Young said. “By working with foreign countries, we can understand what they are going to need and we plug that in to the demand to keep that production line open.”

A tertiary benefit, Young said, is that when aircraft keep getting produced “we actually get a lower price for all of us, not just the foreign customers, but for us as well.”

 

Training new customers

CWO4 Christopher Hunt, of the Security Assistance Training Management Organization, or SATMO, manages teams that train FMS buyers on the new equipment they have purchased.

“We integrate ourselves into the total package approach by providing training for that equipment,” Hunt said. “We travel overseas and we place those teams in country to train them, help them with the delivery of the equipment they just purchased, the assembly and then operation.”

For purchasers of the Apache aircraft, Hunt said, the pilots would come to the United States first for an initial qualification course. After that, he said, SATMO takes over in the buyer’s country.

“Once they take delivery of the aircraft in their country, we will assist them in providing tactical training, domestic operations training and maintenance training,” Hunt said.

What FMS buyers get, Hunt said, is whatever they ask for in the deal.

“We’ll give you everything that you ask for,” he said. “We’ll start with maintenance, assembly, we have large advising teams in countries, both contract and active-duty military, to teach how to repair and maintain as well as how to operate.”

Hunt said SATMO is working now in more than 70 nations, but his own teams include one in Egypt that specializes in the Chinook and the Apache, as well as another team in Bahrain that specializes in Black Hawks.

The Chinook, he said, has been in Egypt since 2001, and the Apache has been there since 1991. “I can’t put a number on the amount of pilots we have actually trained,” he said. “I can tell you we have advised them for several years and assisted them for several years. And because of that, our relationship with the country of Egypt is very strong, military-to-military.”

Not all equipment the United States sells to allies comes with training packages, but, Hunt said, “our preference is to provide that entire package to assist with its use.”

Hunt said that by providing training to the nations that buy equipment from the United States, it increases the opportunities to work together military-to-military to create working, lasting relationships.

“Partnership building is part of one of the largest benefits that we see,” Hunt said. “It’s building and maintaining friendships, it’s about building allies. United States Central Command, or CENTCOM, is obviously a very busy place for the United States now. The more that we can help those countries not only defend, but operate amongst themselves, the stronger our friendship will become, and the less reliant they [will be] on the United States for assistance.”

 




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