South Korea Military to Decide on $7.8 Billion Fighter Jet Order

Photographer: Brendan Smialowski/AFP via Getty Images

Defense Minister Kim Kwan Jin. Close

Defense Minister Kim Kwan Jin.

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Photographer: Brendan Smialowski/AFP via Getty Images

Defense Minister Kim Kwan Jin.

South Korean military leaders are set to announce their priorities for new fighter jets today, signaling whether Lockheed Martin Corp. (LMT) will win a multi-billion-dollar arms deal.

The Joint Chiefs of Staff will decide on the amount and capabilities of fighter jets needed, Defense Ministry spokesman Kim Min Seok said yesterday. Kim declined to say whether Lockheed’s F-35, which features advanced radar-evading technology, is favored after the ministry rejected Boeing Co. (BA)’s F-15 Silent Eagle in the 8.3 trillion won ($7.8 billion) tender in September.

“It’s no secret the JCS wants the F-35,” Kim Jong Dae, a former defense official who publishes the Defense 21+ security monthly, said by phone. “They won’t name the fighter, but will stress they need stealth more than anything.”

A task force of senior defense officials has worked since the end of the tender to identify fighter-jet capabilities South Korea needs after the North conducted its third atomic test in February. Defense Minister Kim Kwan Jin said on Nov. 19 at a parliamentary hearing that the North may now be capable of creating bombs based on uranium in addition to plutonium.

’Fifth Generation’

Defense Ministry spokesman Kim said after the tender was suspended on Sept. 24 that South Korea needs a so-called fifth-generation fighter -- a term Lockheed uses to describe the F-35 -- to deal with the North’s threat.

Buying 60 F-35s could require a further 2.2 trillion won, Kim Kwang Jin, a lawmaker who belongs to both the defense and budget committees of parliament, said. The F-35 had initially been excluded from the bidding due to price along with the Eurofighter Typhoon of European Aeronautic, Defence & Space Co. (EADSF)

The U.S., Australia, Japan and Israel are among nations that have placed orders for the F-35, the Pentagon’s costliest weapon system that has been beset by rising costs and technical troubles, including jittery images in the pilot’s helmet.

“Having more F-35s acquired by foreign allies and partners is helpful to us in keeping the costs lower for our own acquisition of the fighters that will eventually be the backbone of our fleet,” Bruce Lemkin, a former senior U.S. Air Force official who now heads Lemkin International LLC, a consulting firm, said by e-mail.

First Strikes

Boeing contends its F-15SE would be more effective as the jet could hit underground North Korean nuclear targets harder than the F-35. The company, which has previously supplied F-15s to South Korea, is open to a mixed purchase, James Armington, vice president for East Asia-Pacific business development at Boeing’s defense unit, said in an Oct. 29 interview.

The growing tensions between the Koreas have contributed to the South revising its defense strategy to include the possibility of first strikes. South Korean President Park Geun Hye said Oct. 1 her government would hasten development of stepped-up surveillance and improved offensive arms. The government has budgeted 1 trillion won next year for the plan.

South Korea risks being left behind with “legacy equipment” without the F-35, George Standridge, a Lockheed vice president for aeronautics strategy and business development, said in an Oct. 31 interview.

To contact the reporter on this story: Sam Kim in Seoul at skim609@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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