Lockheed Martin sweetens Korean jet deal with satellite support offer

By Kim Eun-jung

SEOUL, June 17 (Yonhap) -- American aerospace giant Lockheed Martin on Monday promised to support South Korea's effort to develop and launch military communications satellites if it wins Seoul's multi-billion dollar fighter jet deal.

Lockheed Martin announced the offer as Seoul is set to start the bidding process on Tuesday to pick a contractor as early as early next month to provide the country with 60 advanced fighter jets for 8.3 trillion won (US$7.3 billion).

Lockheed's F-35 stealth jet is locked in a three-way competition for the deal with Boeing's F-15 Silent Eagle and the European Aerospace Defense and Space Company (EADS)'s Eurofighter Tranche 3 Typhoon.

South Korea has been seeking to develop its own communications satellite and to put five satellites into orbit by 2021 under the long-term defense plan as its armed forces are heavily reliant on U.S. satellites in intelligence gathering to monitor North Korean military activities.

"This strategic partnership will directly benefit Korean national defense requirements, enable substantial industrial activity and transfer high technology to Korea," said David Scott, director of F-35 International Customer Engagement. "If the F-35 is selected, it will provide a unique 5th Generation fighter capability to the Republic of Korea that helps ensure peace and stability for decades to come."

Unlike the two other companies that offer aircraft through direct commercial sales, Lockheed Martin, which sells the F-35 through the foreign military sales program by the U.S. government, has sought to dispel speculation that it is reluctant to offer technology support for the South Korean industry.

The heated competition for South Korea's single priciest arms purchase project has led the three firms to provide competitive offset packages, including technology support for Seoul's indigenous fighter jet projects.

EADS offered an investment of $2 billion in Seoul's plan to build its own fighter aircraft and assemble 53 planes in South Korea to boost the nation's aerospace industry. It also offered to provide the source code to its fighter jets -- the key to the plane's electronic brains -- and purchase Korean-made parts.

Boeing promised to buy billions of dollars in parts from Korean companies and establish live virtual constructive (LVC) to train Korean pilots.

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