U.S. allies shop with Huntsville

Selling to foreign military helps cut costs, keep workers here

Sunday, March 25, 2007

By SHELBY G. SPIRES

Times Aerospace Writer shelby.spires@htimes.com

When an Avenger anti-aircraft system rolls off the Boeing Jetplex production line near the Huntsville International Airport later this year, it will be headed for Egypt as part of foreign military sales agreement that defense managers and experts say helps keep military costs down in the United States.

"By selling to allies, we are allowed to keep this line open, reduce costs for the federal government and keep our skilled workers here," said Phil Hillman, Boeing's Avenger program manager in Huntsville. "It's never good to have an idled production line for an active product."

Hillman said that even while Egyptian work is ongoing there is a benefit to the U.S. Army. "It means the Army will have access to spare parts in the pipeline and that keeps costs down for individual parts also," he said.

The Egyptians are paying about $50 million for about 25 of the Avenger units plus spare parts and engineering support for the deal that was begun in June 2005, defense trade journals have reported.

However, Boeing can't release exact figures because the contract prohibits it and it is sensitive information, said Linda James, a Boeing spokeswoman in Huntsville.

The anti-aircraft system is currently undergoing improvements by Boeing engineers with Egypt's entire production order slated to be delivered by September 2008.

The Avenger is just one Huntsville-built or managed product that is part of the multibillion a year foreign military sales program. Other major weapons sales pending from last year are: the Patriot PAC-3 to South Korea, the High Mobility Artillery Rocket System to United Arab Emirates and the new model UH-60M Black Hawk helicopter to Bahrain.

These major weapon systems, and several other sales, were responsible for a large share - more than $4.4 billion - of foreign military deals made in 2006. The final price tag for all American sales of arms to other nations was $20.9 billion, according to reports to Congress.

The sales are almost double the $10.6 billion reported for 2005.

Experts attribute this increased spending to the newly formed Iraqi military and other Persian Gulf nations that want an arms hedge against Iran.

John Pike, a military expert who heads the Virginia-based think tank GlobalSecurity.org, said the 2006 sales will probably be a high water mark for the defense business because fears have been building over the past few years due to the instability in the Persian Gulf and Asia.

"There was quite a bit of arms sales after the Cold War ended also. In part this was because of the (1991) Gulf War, and part because arms manufacturers had to make money somewhere. Their sales with the Pentagon were drying up after the fall of the Soviet Union," Pike said.

Protecting allies

Some may see foreign military sales as America spreading war to other nations, but the flip side of that argument, said Adrienne Pope-Kelley, director of the Army Security Assistance Management Directorate on Redstone Arsenal, is that well-protected allies keep Americans safe.

"It's security for their nations," Pope-Kelley said. "Frankly, it is much better, in many cases, for us to sell to a nation so they can protect themselves rather than us, meaning the United Sates, having to go out and send our young men and women to do it for them.

"It's like the old proverb about teaching them to fish instead of feeding them fish every day."

The Army Security Assistance Management Directorate, known as SAM-D, on Redstone is responsible for 28 percent of the Army's total foreign military sales every year, Pope-Kelley said.

Redstone's SAM-D has about $25 billion worth of multi-year contracts with more than 11 nations, and generally sells about $8 billion worth of arms a year to other nations, according to Army figures. In total, Pope-Kelley's office works with about 65 nations on contracts, and 11 of those have offices on the Army post.

"The large items like Apaches and Patriots probably get the most attention, but those are just one snapshot of a very large picture. It's not just missiles and helicopters we have to be responsible for; it's everything from radar parts down to the bolts, nuts and screws on those weapons," Pope-Kelley said. "We have to monitor it all."

Although she wouldn't release the individual nations, in the past Egypt, Israel, Thailand and the United Kingdom have set up shop on Redstone to monitor their respective nation's weapons orders.

A country generally initiates contact with a military liaison in the American embassy, Pope-Kelley said, that request is evaluated by the U.S. State Department and finally approved by Congress.

"We don't initiate the sales here. That comes through the various governments."

Because of the complexity, the process can take up to two years or more for approval in some cases. The weapons contractor has to go through an inspection and approval process also, Hillman said.

"We work with the appropriate U.S. government representatives during the negotiation phase," Hillman said. "We answer questions about our products, but purchasing weapons is not like going to an electronics store and buying a new laptop.

"It's a long process, with lots of paperwork and inspection and approvals."



U.S. allies shop with Huntsville Selling to foreign military helps cut costs, keep workers here Sunday, March 25, 2007 By SHELBY G. SPIRES Times Aerospace Writer shelby.spires@htimes.com When an Avenger anti-aircraft system rolls off the Boeing Jetplex production line near the Huntsville International Airport later this year, it will be headed for Egypt as part of foreign military sales agreement that defense managers and experts say helps keep military costs down in the United States. "By selling to allies, we are allowed to keep this line open, reduce costs for the federal government and keep our skilled workers here," said Phil Hillman, Boeing's Avenger program manager in Huntsville. "It's never good to have an idled production line for an active product." Hillman said that even while Egyptian work is ongoing there is a benefit to the U.S. Army. "It means the Army will have access to spare parts in the pipeline and that keeps costs down for individual parts also," he said. The Egyptians are paying about $50 million for about 25 of the Avenger units plus spare parts and engineering support for the deal that was begun in June 2005, defense trade journals have reported. However, Boeing can't release exact figures because the contract prohibits it and it is sensitive information, said Linda James, a Boeing spokeswoman in Huntsville. The anti-aircraft system is currently undergoing improvements by Boeing engineers with Egypt's entire production order slated to be delivered by September 2008. The Avenger is just one Huntsville-built or managed product that is part of the multibillion a year foreign military sales program. Other major weapons sales pending from last year are: the Patriot PAC-3 to South Korea, the High Mobility Artillery Rocket System to United Arab Emirates and the new model UH-60M Black Hawk helicopter to Bahrain. These major weapon systems, and several other sales, were responsible for a large share - more than $4.4 billion - of foreign military deals made in 2006. The final price tag for all American sales of arms to other nations was $20.9 billion, according to reports to Congress. The sales are almost double the $10.6 billion reported for 2005. Experts attribute this increased spending to the newly formed Iraqi military and other Persian Gulf nations that want an arms hedge against Iran. John Pike, a military expert who heads the Virginia-based think tank GlobalSecurity.org, said the 2006 sales will probably be a high water mark for the defense business because fears have been building over the past few years due to the instability in the Persian Gulf and Asia. "There was quite a bit of arms sales after the Cold War ended also. In part this was because of the (1991) Gulf War, and part because arms manufacturers had to make money somewhere. Their sales with the Pentagon were drying up after the fall of the Soviet Union," Pike said. Protecting allies Some may see foreign military sales as America spreading war to other nations, but the flip side of that argument, said Adrienne Pope-Kelley, director of the Army Security Assistance Management Directorate on Redstone Arsenal, is that well-protected allies keep Americans safe. "It's security for their nations," Pope-Kelley said. "Frankly, it is much better, in many cases, for us to sell to a nation so they can protect themselves rather than us, meaning the United Sates, having to go out and send our young men and women to do it for them. "It's like the old proverb about teaching them to fish instead of feeding them fish every day." The Army Security Assistance Management Directorate, known as SAM-D, on Redstone is responsible for 28 percent of the Army's total foreign military sales every year, Pope-Kelley said. Redstone's SAM-D has about $25 billion worth of multi-year contracts with more than 11 nations, and generally sells about $8 billion worth of arms a year to other nations, according to Army figures. In total, Pope-Kelley's office works with about 65 nations on contracts, and 11 of those have offices on the Army post. "The large items like Apaches and Patriots probably get the most attention, but those are just one snapshot of a very large picture. It's not just missiles and helicopters we have to be responsible for; it's everything from radar parts down to the bolts, nuts and screws on those weapons," Pope-Kelley said. "We have to monitor it all." Although she wouldn't release the individual nations, in the past Egypt, Israel, Thailand and the United Kingdom have set up shop on Redstone to monitor their respective nation's weapons orders. A country generally initiates contact with a military liaison in the American embassy, Pope-Kelley said, that request is evaluated by the U.S. State Department and finally approved by Congress. "We don't initiate the sales here. That comes through the various governments." Because of the complexity, the process can take up to two years or more for approval in some cases. The weapons contractor has to go through an inspection and approval process also, Hillman said. "We work with the appropriate U.S. government representatives during the negotiation phase," Hillman said. "We answer questions about our products, but purchasing weapons is not like going to an electronics store and buying a new laptop. "It's a long process, with lots of paperwork and inspection and approvals." © 2007 The Huntsville Times © 2007 al.com All Rights Reserved.