FIDAE 2010: Former Lockheed Martin Argentina plant relaunched as FAdeA

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Argentina has embarked on a new effort to expand its aerospace capabilities and promote exports after renationalising the country's only major aerospace company.

FIDAE 2010 will mark the air show debut of FAdeA, the new name for the Cordoba-based aircraft manufacturing and maintenance company formerly known as Lockheed Martin Aircraft Argentina (LMAASA). FAdeA - which stands for Fabrica Argentina de Aviones - is largely the same company with the same capabilities, facilities and 1,100 employees. But it has a new board of directors, executive team and owner.

Lockheed Martin formally handed LMAASA's keys back to the government in December, after running the facility as a wholly owned subsidiary for 14 years. The facility, which was known as FMA for Fabrica Militar de Aviones before the government handed it to Lockheed in 1995 as part of a contract to upgrade Argentina's McDonnell Douglas A4M Skyhawks, is now overseen by Argentina's defence ministry.

FAdeA has technically been operating since 17 December 2009 but has yet to launch a website, publish any marketing material or even repaint the front of its facility. FAdeA says its new executive team, which began work only one week before the start of Argentina's summer holiday season, spent its first couple of months familiarising itself with the operation, staff and overall aerospace market and preparing a new business plan.

FAdeA says it plans to use the FIDAE air show in Chile later this month to launch its first marketing campaign and introduce its new president, economist-trained Jaime Saiegh, to previous and potential customers. It will also host VIP demonstration flights on its AT-63 Pampa jet trainer, which it will bring to FIDAE in anticipation of restarting an export campaign.

PAMAP PLANS

The Pampa was originally developed and produced by FMA in the 1980s. Production resumed under LMAASA and is now continuing at a very low rate under FAdeA, which is also now proposing a re-engining for the older Pampas. To date about 20 Pampas have been produced for the Argentinian air force but the aircraft has never been exported.

After restarting production for the air force, Lockheed attempted to leverage its international marketing experience to help Argentina export the Pampa. Lockheed vice-president of international business development for the Americas Ron Covais says the manufacturer marketed the Pampa throughout Latin America with the aircraft formerly participating in one military trainer competition. He says some countries in other regions also expressed interest in the aircraft but LMAASA was never able to secure the required approvals from the Argentinian government to export the trainer. "There was a lot of gridlock in their internal politics," Covais says.

Argentina, given its multiple economic crises over the past couple of decades, turned out to be a smaller and less stable market than Lockheed projected. The US manufacturer has also adjusted its international strategy and no longer considers operating production facilities overseas a core capability.

Covais says "there had been ongoing discussions for a number of years" with the Argentinian government over exiting LMASSA. Preferring to avoid any legal dispute, which happened when the government took back Aerolineas Argentinas in 2008 from Spanish travel company Marsans, Lockheed decided to continue running LMASSA until it was able to conclude "a mutually satisfactory agreement".

He adds that the exit agreement included a provision to keep the facility's certification as a Lockheed C-130 repair station assuming the new owners continue to adhere to the proper procedures and standards. LMASSA maintained Argentina's C-130 fleet as well as C-130s for other South American operators.

Military maintenance is a big business for FAdeA, accounting for about half of its revenues. It maintains several other aircraft types for Argentina's air force, including Fokker F27/28 transport aircraft and Beech T-34 and Embraer Tucano trainers.

FAdeA says it has not done any MRO work for foreign militaries since Lockheed's exit but plans to start competing again for such work. It also plans to begin promoting a new primary trainer that FAdeA is looking at developing, initially as a replacement for Argentina's T-34s.

This team, with help from Argentinian embassies and military attaches around the world, will also be used to launch a new export campaign for the Pampa. FAdeA has not identified specific potential customers, but says it has no export restrictions and sees potential within and outside Latin America.While the Pampa has never been exported, FMA, which began producing aircraft in the late 1920s, had extensive export experience.

FMA's IA58 Pucara ground attack aircraft, for example, was sold to Colombia, Sri Lanka and Uruguay. Part of FAdeA's aircraft manufacturing facility is now being used to support a structural upgrade programme for Argentina's Pucara fleet.

FAdeA also plans to establish a civilian aircraft business, a line of work that was not pursued during the LMASSA era because of Lockheed's military roots. FAdeA is negotiating a supplier contract with Embraer, which is required to give FAdeA work as part of the contract it signed with the Argentina government last year for 20 Embraer 190s to be delivered to Aerolineas Argentinas.

FAdeA plans to start producing aircraft components for the Brazilian manufacturer late this year. FAdeA has not yet disclosed which type of part, which does not have to be specific to the E-190, it will supply Embraer.

The closest FAdeA now comes to civilian aircraft is maintaining Fokker F27/28s and other aircraft for LADE, a domestic airline owned and operated by Argentina's air force. But FAdeA, which during the FMA era produced small civil aircraft, has big ambitions that include taking some of the same big steps Embraer has taken over the last 15 years.

For several years FMA and Embraer were of similar size and 20 years ago the two companies jointly developed a 19-seat turboprop, although that was dropped after first flight.

Covais believes that when LMAASA was established, Argentina was better placed than any other Latin American country to establish the region's second aerospace powerhouse. But in the end Argentina lacked the economic and political support that Embraer had in Brazil.

But he believes Argentina is in a better position than other South American nations to follow Brazil's lead, pointing out that FAdeA still has more capabilities, including a highly qualified engineering team, than the region's other second-tier aerospace companies. "The facilities in Cordoba are very good, with the capability for military and some extent civil," he says.

Covais acknowledges Lockheed at times had union problems at LMASSA and there were occasions the Argentinian government was late in paying its bills. "There were difficult years but we did recoup," he says. "For the most part it was profitable, but when they were ready to take it back we were ready to give it back."