Bloomberg News

South Korea to Buy $1.2 Billion in Drones Under U.S. Plan

December 24, 2012

South Korea to Buy $1.2 Billion in Drones Under Pentagon Plan

A United States Air Force Global Hawk drone, manufactured by Northrop Grumman Corp., during a media preview of the Seoul International Aerospace & Defense Exhibition 2011 in Seongnam, South KoreaPhotographer: SeongJoon Cho/Bloomberg

The U.S. Defense Department proposed selling South Korea four Global Hawk surveillance drones made by Northrop Grumman Corp. (NOC:US) in an order valued at $1.2 billion.

The Pentagon’s Defense Security Cooperation Agency said yesterday that it notified Congress of the proposed sale, which includes infrared and electro-optical sensors, imagery analysis systems and moving target indicators on board the Global Hawk Block-30 unmanned aircraft.

The proposed sale would be the first order in the Asia- Pacific region for the high-altitude surveillance drones that have been used by the U.S. Air Force in Afghanistan and Iraq. Australia, which has expressed an interest in buying the aircraft since 2008, has yet to place an order.

Wes Bush, chairman and chief executive officer of Falls Church, Virginia-based Northrop Grumman, has been advocating easing U.S. export restrictions to enable foreign sales of the drones. Earlier this year, the North Atlantic Treaty Organization agreed to buy five Global Hawk drones.

The Pentagon has proposed canceling the Block-30 version of the Global Hawk drone. Its fiscal 2013 budget proposal called for truncating purchases of the drone and putting those it had already bought into storage to save $2.5 billion over five years. The Pentagon sought to continue buying the more advanced Block-40 model instead.

Congress Intervenes

Congress disagreed with that plan, and the final version of this year’s defense authorization bill, approved this month, would block the Air Force from retiring the Block-30 drones at least until the end of 2014.

In January, General Norton Schwartz, who was at the time the Air Force chief of staff, said the Block-30 version wasn’t as capable as Lockheed Martin Corp. (LMT:US)’s older, manned U-2 spy plane.

Separately, the Pentagon yesterday proposed selling 117 of Raytheon Co. (RTN:US)’s AIM-9X Sidewinder missiles to Turkey valued at about $140 million; $125 million of satellite ground stations made by L-3 Communications Holdings Inc. (LLL:US) and 3Di Technologies, to Iraq; and $406 million of artillery rockets made by Lockheed Martin to Qatar.

The notifications are the first step in the potential purchases. The requests become firm orders if they aren’t challenged by Congress and the countries sign contracts with the Pentagon.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net; David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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Companies Mentioned

  • NOC
    (Northrop Grumman Corp)
    • $127.09 USD
    • 0.56
    • 0.44%
  • LMT
    (Lockheed Martin Corp)
    • $168.07 USD
    • 0.20
    • 0.12%
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