Daily Management Review

In a Two-Horse Race with Lockheed, Saab Pitches Modern Combat Jet Plant in India


In a Two-Horse Race with Lockheed, Saab Pitches Modern Combat Jet Plant in India
As Sweden's SAAB goes head-to-head with U.S. rival Lockheed Martin to supply hundreds of locally produced planes to India's military, the company has offered to build the world's most modern fighter aircraft factory in India, it said on Friday.
Even though Lockheed understands that President Donald Trump's administration may want to take a fresh look at such plans, the company said it is pushing ahead with its proposal to transfer the production line of its F-16 fighter to India, and Saab's pitch for its Gripen E aircraft comes a day after Lockheed’s such announcement.
After the Indian defense ministry floated an initial request for a single-engine combat plane in October, the race to supply the Indian Air Force with an estimated 200 to 250 fighter planes over the next decade has narrowed to Saab and Lockheed.
"We are offering to set up the world's most modern (aerospace) ecosystem and facility in India to manufacture the Gripen for India and the global market," Kent-Ake Molin, Gripen's product sales director, told reporters.
The industrial base for India to design, develop and build future fighters would be laid as Saab says it is in talks with nearly 100 aerospace and defense firms in India to provide components for the production of the plane.
"What we are offering is a futuristic, new generation plane and not one that is the reaching the end of its life and is being replaced by air forces around the world," Molin said, in a dig at the F-16.
The F-16 Block 70 is the newest and most advanced version of the plane that is flying with the air forces of 25 countries around the world and Lockheed has offered to build the F-16 Block 70 in India.
As the existing plant in Fort Worth, Texas switches to producing the fifth generation F-35 for the U.S. Air Force, the proposed Indian facility for making the F-16s would be the only one in the world it said.
To meet the urgent needs of the air force, some time this year, the Indian government is expected to decide between the two bidders.
The process was at an early stage, said a defence ministry official. Although Prime Minister Narendra Modi's administration has promised the military faster modernization, defence procurement almost always takes years in India.
In what is the country's first major acquisition of fighter planes for two decades, India signed a deal to buy 36 Rafale fighter jets from France for around 7.8 billion euros ($8.30 billion) last September.
However, India is now looking to other manufacturers to fill its remaining need for new fighters after the two sides failed to agree on costs and local production terms, as the government trimmed back a planned larger order for Rafales.
Even in this case the factory would supply the Indian military rather than export to the United States, however concerns have raised of a potential impact on Lockheed's offer to India by Trump's criticism of U.S. auto and drug companies moving manufacturing overseas and then selling goods back to the United States.
India's biggest air show is opening in Bengaluru next week, hosted by the Indian defense ministry and both Saab and Lockheed are participating in it.

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