FIDAE 2006 Show report: Enaer set to make F-16 parts in Lockheed deal

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Lockheed Martin is in the final stages of negotiating contracts to allow Chilean national aerospace company Enaer to manufacture structural components for the F-16 as part of a 100% offset obligation linked to the Chilean air force’s acquisition of the type.

The deal would see production of a variety of machined structural components transferred from Lockheed’s Fort Worth plant in Texas, with Enaer to take responsibility for supply on all future international F-16 orders.

Richard Singer, Americas business development regional director for Lockheed Martin Aeronautics, says the deal is a “sign of our faith in Enaer”.

The transfer of work will end Lockheed’s internal production capability for the components and allow the Chilean company to perform manufacturing activities for both new-build and upgraded F-16s. “We think they have the capability to be a world-class supplier of F-16 parts,” he says.

Enaer and Lockheed have been preparing for the production effort since late last year, including improving the Chilean company’s quality control systems. The companies are now “in the middle of figuring out” commercial arrangements, says Singer.

The Chilean government’s CORPO agency is meanwhile expected to issue a report around mid-year on the status of offest business linked to the 10-aircraft F-16 deal. Lockheed revealed at the FIDAE show that offset work packages linked to the programme have so far included investments in the Chilean forestry, fisheries and ship building sectors.

Lockheed’s approach has also included “projects that are both civilian and in the aeronautics industry”, says John Balderston, Chilean F-16 programme director for Lockheed Martin Aeronautics. It has also invested in Chilean-headquartered RASSA Holdings, supporting global commercialisation of its R@N One internet-based passenger sales and services system aimed at small- to medium-size airlines.

In 2002, Lockheed negotiated a regional C-130 Hercules service centre arrangement with Enaer, while General Electric set up a technical publications centre in Chile, supporting global engine sales efforts.