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Published by the Federation of American Scientists Fund No.
48 (August 2002)
Boeing's foreign competitors have been puzzling over what went wrong with the recent South Korean fighter aircraft sale. The winning F-15K aircraft's closest competitor, Dassault's Rafale, beat out the F-15 in the initial evaluation stage, which compared the competing aircraft in terms of life-cycle costs, operational capabilities, compatibility with existing weapons systems, and technology transfers. Yet Boeing still managed to clinch this $3.2 billion sale. Since the initial reports naming Boeing as the winner began to surface, the deal has attracted vociferous criticism by foreign arms manufacturers for unfair business practices and heavy-handed U.S. government influence over the outcome of the sale.
Their allegations were not without substance. In November 2001, Senator Christopher Bond (R-MO) was quoted in the St. Louis Dispatch as warning the Koreans that if they "make the wrong decision very unfortunate things could happen" to the relationship between the U.S. and Korea. The Senator raised more eyebrows in January by meeting with South Korea's Defense Minister. Saint Louis, Missouri is the home of Boeing's F-15K production line.
Two months later, fury over the competition erupted again when a Korean air force colonel involved in the selection process accused his superiors of exerting pressure on the air force evaluation team to recommend Boeing. According to a report in the Seoul Yonhap, a senior Korean defense official warned the colonel that failure to select Boeing could result in the withdrawal of U.S. troops from the Korean Peninsula.
Both the Russians and the French publicly expressed anger over U.S. tactics used to secure the tender and, according to a June 6 article in the Korean Times, Dassault claims it will cease to bid on future South Korean contracts.
Whispers of scandal aside, this sale would appear to be reason for celebration in the U.S., especially for those employed by aerospace giant, Boeing. The real story is not so rosy, however. The deal included offset and coproduction agreements ensuring that the sale will generate over 30,000 new jobs in South Korea, while only protecting 1,000 jobs for Boeing workers in the U.S.
