Monday, July 16, 2007

Turkey Increasingly Shuns U.S. Weapons


Recent Turkish procurement practices that favor non-U.S. suppliers in key defense programs may indicate a larger tendency to avoid the purchase of American weapons where the Turks easily can find alternatives, analysts and industry sources said.
“At some point in a not-so-distant future, we may see that Turkey practically buys only fighter aircraft and related services from the United States, and almost nothing else,one Ankara-based analyst said.
Turkey’s ongoing complaints over what it sees as the United States’ strict restrictions on technology transfer and other sale difficulties have prompted the NATO ally to seek closer industry ties with other suppliers, the analyst said.
This year, Turkish procurement authorities have shunned U.S. products in three programs collectively worth billions of dollars, selecting an Italian-British group for attack helicopters, and South Korean companies for trainer aircraft and main battle tanks.
The United States has been Turkey’s closest Western ally and largest weapon supplier since World War II. The defense-industrial relationship has two aspects: government-to-government purchases from the United States, Washington’s Foreign Military Sales based on(FMS) mechanism; and commercial sales, in which U.S. companies usually have to compete with rivals from other countries. It is the second category in which the Americans are struggling.
The government-to-government sales will continue to flourish, with Turkey set to buy new fighter aircraft and related services worth nearly $15 billion over the next 10 to 15 years. These include a Turkish plan to buy 100 next-generation F-35 Joint Strike Fighter jets worth $10.7 billion; a recent contract for the sale to the Turkish Air Force of 30 F-16 Block 50 fighters worth $1.85 billion; and an ongoing modernization of older Turkish F-16s for $1.1 billion. In all these cases, Lockheed Martin is the prime contractor.
In addition, Turkey buys various types of Air Force and naval missiles and other services under FMS deals.
But commercial sales are faltering. The only recent commercial contract won by the United States is last year’s $580 million purchase of 17 S-70B Seahawk naval warfare helicopters. And Sikorsky was the sole source in that deal.
U.S. Government Complains
The U.S. government and companies blame the deterioration on the Turkish procurement agency’s strict rules of acquisition that took effect in 2005.
In unusually candid language, a senior Pentagon official recently accused the Undersecretariat for Defense Industries (SSM), Turkey’s procurement agency, of “hindering Turkey’s military modernization, interoperability with NATO allies and U.S.-Turkey defense industry cooperation.”
“Onerous terms and conditions — liability, work share, technology transfer and upfront U.S. government approval requirements in Turkey’s standard contracts — have kept U.S. firms from bidding,” Daniel Fata, deputy assistant secretary of defense for Europe and NATO, told a House of Representatives panel March 15.
Since then Turkey has selected the Italian-British AgustaWestland, maker of the A-129 Mangusta International, for its $2.7 billion attack helicopter program. Ankara also has opted for the KT-1 Woongbi, developed by South Korea’s Korea Aerospace Industries, for the $450 million trainer aircraft contract. As the model for Turkey’s national tank program, South Korea’s XK-2 platform, made by the Agency for Defense Development, has been chosen. With follow-on contracts, the South Korean share in this deal may exceed $1 billion.
U.S. companies were nonplayers in all three programs, with leading manufacturers, including Boeing, Bell Helicopter Textron and Raytheon, even failing to bid. The U.S. firms said the Turkish terms and conditions were not compatible with U.S. export laws and regulations.
Earlier, U.S. company General Atomics lost a nearly $200 million UAV deal to Israel’s Israel Aerospace Industries.
“Winning Turkish contracts is becoming increasingly difficult for U.S. firms, and we’re not happy about that at all,” one U.S. industry official said.
Turkish procurement officials deny charges of discrimination, with SSM chief Murad Bayar saying that his agency had softened terms and conditions to enable U.S. participation. But Bayar and other officials also say that companies from other countries do not share U.S. complaints.
“The Turks, to borrow their language, are kind of fed up with U.S. restrictions on technology transfer and other sale problems, and are effectively telling the Americans that as long as they can find equivalent systems from less problematic suppliers, they will prefer non-U.S. solutions,” the Ankara-based analyst said. “And I see no reason for the Turks to change this approach in the foreseeable future.”
One exception in Turkey’s recent preference for non-U.S. systems for commercial deals is helicopters.
Sikorsky Aircraft, maker of the S-70 Black Hawk International, is expected to win an ongoing tender for 32 military utility helicopters for $500 million over European rivals. Boeing’s CH-47 Chinook is seen as an early favorite in an upcoming program for heavy-lift helicopters.
Although not directly related, the faltering U.S. commercial sales to Turkey come at a time of deteriorating political relations, mainly because of the Iraq war and increased terrorist attacks inside Turkey by separatist Kurdish rebels based in northern Iraq. Ankara’s calls on Washington and Baghdad to put an end to the presence of the outlawed Kurdistan Workers Party in Iraq so far have produced no visible result.
Turkey has emerged as the world’s “most anti-U.S. country,” according to this year’s annual global poll by the Pew Research Center, released June 27. The poll’s results indicate only 9 percent of Turks have favorable views of the United States, Pew said. •


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