US defense firms, facing shrinking government budgets and seeking business efficiencies, are looking overseas not only for new markets, but for technology that can help them win new orders and competitions.
Such is the case with Boeing, now in discussions with Saab of Sweden to jointly develop a bid for the US Air Force’s trainer replacement program, the T-X.
All of the competitors lining up in the T-X battle hail from the international market, including the Hawk Advanced Jet Training System, a joint program of BAE Systems and Northrop Grumman; Lockheed Martin’s offering of the Korean Aerospace Industries’ T-50; and the T-100, a collaboration between Alenia Aermacchi and General Dynamics.
A deal with Saab would give Boeing access to Saab’s low-cost manufacturing expertise, its experience with smaller, lighter aircraft, and ability to tap new international markets.
Saab, in turn, would benefit from a lucrative US contract that would span decades, supporting its signature aircraft business. That’s especially valuable at a time when its Gripen fighter faces brutal competition in the world fighter market.
In a larger sense, the partnership could serve as a test case for a top Defense Department priority: getting industry to increase its independent research and development investment. Last week, Jonas Hjelm, CEO of Saab North America, told a Washington audience that his company convinced its stockholders that increasing R&D — in essence, gambling on the firm’s ability to predict the future — was its best way forward. They accepted; last year alone the company boosted R&D spending by 3 percent.
Creating a new entry for the trainer market starting with a clean sheet of paper poses risks for both parties. The other entries are already designed, built and proven. Yet tailoring a product to the US requirement in a more economical package could attract not only the Pentagon’s interest, but that of other nations that would follow its lead.