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Feb. 14 (Bloomberg) -- Boeing Co., maker of the F-18 and F-15 fighter jets, said it’s “very confident” of winning a $7 billion South Korean order for combat planes as it boosts focus on Asia amid shrinking military spending at home.
“If you look at the budget situation in Europe and the U.S., we have to make some grounds somewhere,” Joe Song, director, Asia Pacific International Business Development of Boeing defense, said in an interview in Singapore yesterday. “The focus is Asia and the Middle East right now.”
Boeing, based in Chicago, is pitching its F-15 Silent Eagle for the South Korean contract for 60 fighters against planes from Lockheed Martin Corp. and Eurofighter GmbH. Asia Pacific is expected to increase spending on defense products by 4.2 percent annually until 2016, according to Frost & Sullivan.
Bids for the South Korean order are due in June, and a winner may be selected by October. The country is also looking to buy 36 attack helicopters this year, Song said.
“From the cursory look at the RFP, it looks like we can meet all requirements,” he said, referring to the initial request for proposal. “We have great partnerships in Korea, so we are very confident that we can do this.”
The other jets in the contest include the F-35 by Lockheed, the biggest U.S. military contractor, the Eurofighter Typhoon and Saab AB’s Gripen.
Lockheed, based in Bethesda, Maryland, won an order from Japan for 42 F-35 fighters in December. The jets may cost 1.6 trillion yen ($21 billion) to buy, operate and maintain over 20 years, according to the nation’s defense ministry.
India last month named Paris-based Dassault Aviation SA as preferred bidder for a contract to supply 126 fighters. The planemaker’s Rafale had been shortlisted with the Eurofighter Typhoon after the earlier rejection of offers from Lockheed, Boeing, Saab and Moscow-based United Aircraft Corp.
Companies are increasing their focus on Asia to offset slowing demand in Europe and the U.S., the world’s biggest military market. Western European defense spending fell about 5 percent last year and may decline further this year, according to Fitch Ratings.
In the U.S., Defense Secretary Leon Panetta presented an outline on Jan. 26 for $613 billion in spending for fiscal 2013. The proposal is part of an effort to cut $487 billion from $5.62 trillion in defense spending that had been planned for 2012 to 2021. Automatic spending cuts could force an additional $500 billion in reductions over a decade.
--Editors: Vipin V. Nair, Dave McCombs
To contact the reporters on this story: Kyunghee Park in Singapore at firstname.lastname@example.org; Haslinda Amin in Singapore at email@example.com
To contact the editor responsible for this story: Neil Denslow at firstname.lastname@example.org