TAIPEI - Bowing to Chinese pressure, the U.S. will deny Taiwan's request for 66 new F-16C/D fighter aircraft, a Taiwan Ministry of National Defense (MND) official said.
"We are so disappointed in the United States," he said.
A U.S. Department of Defense (DoD) delegation arrived here last week to deliver the news and offer instead a retrofit package for older F-16A/Bs that includes an active electronically scanned array (AESA) radar.
The visit coincided with the biennial Taipei Aerospace and Defense Technology Exhibition (TADTE), held here Aug. 11-14.
"The U.S. Pentagon is here explaining what is in the upgrade package," a U.S. defense industry source said at TADTE. "They are going to split the baby: no C/Ds, but the A/B upgrade is going forward."
Sources said an official announcement of the decision is expected by month's end.
But an official at the American Institute in Taiwan (AIT), the de facto U.S. Embassy, said "no decisions have been made," while DoD officials declined to comment on their delegation's mission.
The proposed upgrade package would make the 146 Taiwanese F-16A/Bs among the most capable variants of the aircraft, perhaps second only to the APG-80 AESA-equipped F-16E/Fs flown by the United Arab Emirates.
Originally requested by Taipei in 2009, the package would cost $4.2 billion, sources at TADTE said.
The new gear would include an AESA radar, likely either Northrop Grumman's Scalable Agile Beam Radar or the Raytheon Advanced Combat Radar, to replace the planes' current APG-66(V)3 radar.
Either one would be an improvement on the Northrop APG-68(V)9 mechanical radar once contemplated for Taiwan's upgrade package. The switch is meant to soften the blow of denying new planes to Taipei, a Lockheed Martin source said.
A decision between the two AESA candidates could foreshadow the U.S. Air Force's own choice as it prepares to upgrade its fleet of F-16s. The upgrade package will also improve the planes' Raytheon ALQ-184(V)7 electronic countermeasures pod by adding the capacity to intercept and save hostile radar transmissions, then use the same frequency to jam them.
However, ITT is offering the ALQ-211 Advanced Integrated Defensive Electronic Warfare Suite pod as an alternative.
ITT is also offering the BRU-57/A Smart Twin Store Carrier, which doubles the number of bombs an F-16 can carry, an ITT source said.
The package would also replace the AIM-9P/M Sidewinder air-to-air missile with the new AIM-9X; fit the planes to carry enhanced GBU-12 Paveway II laser-guided bombs; and add a digital radar warning receiver, helmet-mounted cueing system and center pedestal display.
The package will not include new engines to better handle the additional weight and electrical draw, though there could be an upgrade to bring the existing Pratt & Whitney F100-PW-220 to the PW-220E standard. The upgrade would swap out obsolete parts for newer ones, but wouldn't offer any additional performance.
Lockheed Martin will be working with Taiwan's state-run Aerospace Industrial Development Corp. (AIDC) to integrate the new gear on the jets.
"Changing a fighter's major sensor should not be taken lightly. It is more than electrical capacity. It is the integration of sensors, weapons, displays, etc., that make a fighter aircraft effective," Lockheed spokeswoman Laura Siebert said.
Siebert said the failure to release F-16C/Ds will weaken Lockheed Martin's plans to extend the production line for the fighter.
"While Congress has been notified of Oman and Iraq's desire for F-16s, the Taiwan order for 66 aircraft is very important to the long-term viability of the F-16 production to include the U.S. Air Force, Lockheed Martin and the thousands of suppliers throughout the U.S.," she said.
More than a few TADTE attendees said the Obama administration might reverse the decision as the 2012 presidential election approaches and political pressure for new jobs builds.
A June report by the Perryman Group, a Texas-based economic and financial analysis firm, estimated that Taiwan's F-16C/D program would create more than 16,000 jobs and almost $768 million in U.S. federal tax revenue. Much of that tax revenue and new jobs would go to election battleground states: California, Connecticut, Florida, Maryland, Ohio, Texas and Utah.
But China holds about 8 percent of U.S. debt, the largest block in foreign hands.
As one TADTE attendee said, "Beijing's Kung Fu is better than Washington's."
The denial of the new jets will likely lead AIDC officials to ask the government to expand upgrade plans for Taiwan's 126 Indigenous Defense Fighters, of which 71 are currently slated for upgrades.
The company has also been pushing Taiwan's Air Force to allocate funds for full-rate production of the IDF C/D Goshawk, which features improved range and weapons payload.
In July, the U.S. State Department indicated a final decision on the F-16 issue would be made by Oct. 1. Since 2006, the U.S. has repeatedly denied Taiwan's request for 66 F-16C/D Block 50/52s, a prospective sale estimated at more than $8 billion.
The planes would replace 60 F-5 Tigers and 60 Mirage 2000-5s due for retirement within five to 10 years.
China has called the sale a "red line." A recent editorial in the state-controlled People's Daily called for the use of a "financial weapon" against the U.S. if new F-16s were released.
The U.S. decision comes as a blow to the self-ruled island's effort to counter China's growing military, whose first aircraft carrier began sea trials last week, and therefore to its independence.
There are fears that losing Taiwan could spell the end of U.S. power projection in the region. Losing Taiwan would "change everything from the operational arch perspective to the posture of Japan and the U.S." in the region, said Raytheon's Asia president, Walter Doran, a retired admiral who once commanded the U.S. Pacific Fleet.
Staff writer Dave Majumdar in Washington contributed to this report.