Tuesday, February 17, 2009

International arms sales

I was reading an article in avweek and had the following thoughts.

The article was about the LCA competition in India. The program started in 1983 and IOC is supposed to be 2012. Since the Indians needed some management help with the testing program, they turned to either a European group of companies or Boeing. Boeing lost out because of US trade laws regarding the transfer of military technology.

This is all important to Boeing because there is a multi-role aircraft competition in India for the "next size up" from the LCA. The Indians want to be able to build everything in India, so that they won't need us for the next set of planes. Boeing still (I assume) wants to win.

So, long story short, the article made me feel like ITAR restrictions were known as a bad thing and that the United States Government should remove the restrictions to help US companies win contracts.

Now I know that everyone wants jobs here, but I don't know that it makes sense in this case. We would basically be selling blue prints and know how. I don't see too many US jobs being created. We lose important technology that other people can not build. In addition, the USG sponsored the development of the military technologies. Why does Boeing get to profit off of them while giving the technology away? Is it the role of the USG to develop and then give away expensive technologies to other countries? I mean, it almost looks like a pissing contest. Everyone wants their country's weapons systems to be sold everywhere. If you lose, your weapons systems just aren't man enough to last in a war.

I don't see giving away our competitive advantage to someone that desperately needs it. You can not use the argument that the Indians would have developed it anyway, why shouldn't we profit. Now, if you use the argument that the Europeans would develop it and give it to India, you might have a point. But our stuff is better than the stuff from Europe so at least they are a bit behind. The European stuff is not developed, so they would have to spend large amounts of money to do so.

I would like to see more US companies winning contracts and the ITAR restrictions are a hindrance. I think we need to think harder about the long term effects of reducing ITAR restrictions. I know that we depend on foreign sales to drive down the cost, but should we be giving away the skills and information needed to improve on the system? I would hate for us to show everyone what we know right now for profit and then be replaced by them in the future. In the end, we need a balance between the current need for profit/more units and future business/competitive advantage.

One thing I haven't mentioned is the hard to measure gain that we get from working closely with another nation. The more cooperation between nations the greater the chance that they will work together on other tasks. Having a Boeing or Lockheed plane win the MRCA competition would make it easier for Indian forces to deploy with American forces.

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