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05BANGKOK2822 F-16 AND RTAF FIGHTER REPLACEMENT: ELEVATING PROFILE OF LOCKHEED MARTIN BID

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“31461”,”4/26/2005 8:11″,”05BANGKOK2822″,

“Embassy Bangkok”,”CONFIDENTIAL”,”05BANGKOK7550″,

“This record is a partial extract of the original cable.

The full text of the original cable is not available.

 

“,”C O N F I D E N T I A L SECTION 01 OF 02 BANGKOK 002822

 

SIPDIS

 

DEFENSE FOR OSD/ISA (POWERS & STERN), DSCA, STET/ISA

(NSCF), PACOM FOR FDA HUSO, DEPARTMENT FOR EAP/BCLTV

 

E.O. 12958: DECL: 04/21/2015

TAGS: MASS, MCAP, PGOV, EIND, TH, POL/MIL

SUBJECT: F-16 AND RTAF FIGHTER REPLACEMENT: ELEVATING

PROFILE OF LOCKHEED MARTIN BID

 

REF: BANGKOK 07550

 

Classified By: Ambassador Ralph L. Boyce. Reasons 1.4 (a) and (d)

 

1. (C) SUMMARY: On April 20, in a meeting with 13th Air

Force Commander, Major General Edward Rice and the Royal Thai

Air Force (RTAF) Selection Committee, Lockheed Martin (LM)

executives advocated that RTAF purchase F-16s to replace

their aging F-5 fighters. The presentation offered three

principal advantages of the F-16: (1)- vastly increased

technical capabilities over what the Thais have now, (2)- a

system which is compatible and already familiar to RTAF

personnel, and (3)- an offer of up to 100% countertrade and

various options of industrial cooperation, as well as

flexible financing and technological transfers.

 

2. (C) According to US military officials, LM is offering the

best planes at the best price, but their bid is by no means

certain to win, due to the higher-profile campaigns and

under-the-table tactics from both the other bidders. USAF

and LM officials believe the LM bid is on the upswing, and

though it was seen as a lost cause until a few weeks ago, it

may have drawn even with the two rival bids. The key

obstacle is an earlier directive from PM Thaksin to consider

only the Swedish and Russian bids, due to their offers of

countertrade. Although LM is now offering countertrade, it

appears possible that the Thai Commerce Department is still

adhering to this earlier directive and not considering LM\’s

bid. Post believes that if senior-level US officials clarify

LM\’s countertrade proposal with PM Thaksin directly, the tide

could turn in LM\’s favor. RTAF will have to make its final

recommendation to the PM by late May, while the final

decision on a winning bidder is expected to made over the

summer. We ask that PACOM Commander ADM Fallon and the Deputy

Secretary both raise F-16 in separate meetings with the Prime

 

SIPDIS

Minister during the week of May 2. END SUMMARY

 

ENHANCED CAPABILITIES

 

3. (SBU) The meeting between Lockheed Martin and the RTAF

Selection Committee began with a highly detailed technical

presentation by USAF which highlighted the enhanced

capabilities of the new F-16 (Block 52) fighter planes. The

presentation meticulously contrasted the capabilities of

RTAF\’s current hardware with what they would be getting with

the new equipment. Having the new F-16s would mean enhanced

communications systems, safety features, information

gathering, night visibility, fuel storage, among other

things. The briefer stressed the commonality of F-16s already

in the RTAF inventory, training and equipment with the Block

52s, and further emphasized the ability of the Block 52s to

provide a solid bridge of experience and skill sets for the

RTAF to transition to the Joint Strike Fighter (JSF) in the

future.

 

MAKING THE MOST OF WHAT THAILAND ALREADY HAS

 

4. (SBU) LM also focused on the logistical advantages to the

Thai military of choosing the F-16 fighters. RTAF pilots

already had experience flying F-16s. Having a system that is

compatible with that of the United States and mutual allies

would also be beneficial for military cooperation among all

sides. LM highlighted that under their proposal, Thailand

would also be entitled to certain specified amounts of

support equipment, spare parts, USAF pilot training, as well

as a 2-year \”update service\”.

 

BARTER AGREEMENTS, COUNTERTRADE AND TECHNICAL & INDUSTRIAL

COOPERATION

 

5. (SBU) LM highlighted the 18-year client relationship

between LM and the RTAF, and their place on the cutting edge

of international aviation technology. Officials made it clear

that LM was willing to share LM technology through industrial

cooperation projects and other technology transfers. LM

officials stressed their willingness to offer 100%

countertrade or offsets if the RTG so desired. The head of

the delegation added that his company was willing to exercise

a great deal of \”financial flexibility\” in order to satisfy

Thailand and pointed out that if Thailand was interested in

assistance in fields unrelated to the defense industry, LM

was willing to work with them on that as well. The LM team

emphasized that no other company in the world possessed the

assets and capabilities to tailor a winning package for

Thailand.

RENEWED OPTIMISM…CONTINUED PESSIMISM

6. (C) During preparatory meetings and side meetings, USAF

and LM officials agreed that the LM bid offered the best

package for RTAF. Despite widespread support from

lower-ranking members of the RTAF who favor the superior,

easier-to-integrate F-16s, the Embassy remains concerned

about the transparency of the selection process. The Swedes

and the Russians also have the added advantage of having

high-level officials (King Carl XVI Gustaf and President

Putin) raising the issue directly with RTG. Post believes

similar high-level involvement on the part of USG may still

influence the RTG. Still, these same officials agree that LM

has a definite shot at winning the bid, which they certainly

didn\’t have one month ago. Reasons for the shift include a

renewed push by LM, which had previously figured Thailand

might opt simply for an upgrade of current planes rather than

a purchase of new fighters. The RTAF officers present for

the meeting considered this the \”first\” meeting with LM in

which the company expressed a strong intention to meet the

legal requirements for countertrade.

 

7. (C) RTAF informed JUSMAG that the key obstacle to purchase

of F-16s is an earlier directive from PM Thaksin to consider

only the Swedish and Russian bids due to their offers of

offsets and countertrade. At that time, one of Thailand\’s

key objectives was to unload its stockpiles of frozen

chickens. Although LM is now offering countertrade, and

although chickens have become a less important issue, it

appears possible that the Commerce Department is still

adhering to this directive. Complicating matters is the

perception that Lockheed Martin\’s bid lacks high-level

backing from the USG. Our RTAF interlocutors suggest that

this could be remedied by direct involvement by senior USG

officials. Clear guidance from PM Thaksin to consider the

F-16 offer must be received by RTAF before they will forward

a recommendation to acquire F-16s.

 

FOLLOW-UP

 

8. (C) In all meetings, RTAF officials repeatedly stressed

that there was a widespread consensus within the organization

that F-16s were the logical choice for their next generation

of fighters. LM hopes to boost this level of support by

meeting with F-16 pilots and key wing leadership at both

Korat and Takhli Air Force Bases April 21-22. The RTAF New

Fighter Selection Committee expressed their intention to

forward packages and a recommendation to the Ministry of

Defense by approximately May 22, while the final decision on

a winning bidder is expected to made in July or August.

 

9. (C) Post expects PACOM Commander ADM Fallon will raise

F-16 in his meetings with MOD, MFA and the Prime Minister on

May 3 and 4. We also will recommend that Deputy Secretary

Zoellick urge Thaksin to seriously consider Lockheed Martin\’s

countertrade offer during his meeting with the PM on May 4.

We are working closely with Washington colleagues to find

other high-level opportunities to promote F-16, including

Foreign Minister Kantathi\’s upcoming visit to the United

States.

BOYCE

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Written by thaicables

July 7, 2011 at 5:17 am

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