FORT LAUDERDALE, Fla. -- The boom in foreign military sales is necessary to help maintain the defense industrial base for the next war through a period of declining budgets, Army officials here said Thursday.
“Foreign military sales – that’s a critical component for us” in the overall readiness of the force for future conflicts, said Maj. Gen. Michael J. Terry, head of the Army’s Tank-Automotive and Armaments Command.
Terry said the Middle East and Northern Africa were proving to be lucrative markets for U.S. arms, with long-time clients Morocco and Saudi Arabia boosting buys of tracked vehicles and fighter planes, and Iraq also seeking high-priced U.S. equipment.
Gen. Dennis Via, commander of Army Materiel Command, said that in fiscal 2012, AMC executed $19.6 billion in foreign military sales and he projected $13.2 billion in sales for fiscal 2013.
“Despite the high bar for approving arms transfers and the aggressive monitoring that our laws require, U.S. defense sales are surging right now," Thomas Kelly, head of the State Department’s Bureau of Political-Military Affairs, said in January. Kelly said overall foreign military sales more than doubled last year to $69 billion from $34 billion in 2011.
Pentagon leaders have lobbied the State Department to speed up the process for defense companies to get foreign military sales contracts approved. The increases seen over the past year is proof of the progress being made, defense industry execs here at the Association of the U.S. Army's Winter Symposium.
“What I am finding in my travels as I meet with foreign militaries is they have trust in equipment that the United States provides to them,” Via said.
“As we continue to deliver these capabilities, through foreign military sales, we also offer the opportunity for training to go in and we think this is an opportunity we can leverage as we continue to build relationships with our allies and partner nations,” Via said.
AMC is also starting to push sustainment packages into the FMS program.
“Equipment, when it arrives, being a new set of equipment at some point in time, it is going to have to be sustained, it is going to have to be maintained,” he said. This also provides more work for the foreign army depots “so we can preserve the organic industrial base and the skill sets.”
At an AUSA panel on “Industrial Base Partnering,” John Nerger, the executive director to Via at AMC, said “DoD is experiencing one of those cyclical downturns” under tight budgets as the military transitions from flush budgets that came with warfighting to what he called a “period of sustainment.”
Through the transition, the military will need to stress “our industrial base as a national strategic asset. We need a viable industrial base for the future.”
For industry, the focus will be on trying to maintain “reversibility” – the know-how to crank up the industrial base again when the need arises, said Gary Whited, senior vice president and general manager of domestic programs at General Dynamics Land Systems.
There are also “a couple of things we’ve got to get on top of,” Whited said. “We’ve got to reduce the logistics train, we’ve got to reduce the amount of things we take to the battlefield.”
With the backing of the State Department, foreign military sales to the Middle East have been booming as the threat from Iran increases.
Last year, the U.S. signed off on the first sale of Lockheed Martin’s Theater High Altitude Area Defense (THAAD) to the United Arab Emirates to guard against short and intermediate range missiles.
The UAE is also negotiating with Boeing Bell and the Marine Corps on what would be the first foreign sale of the V-22 Osprey tilt-rotor aircraft.
Last year, Iraq agreed to buy at least six unarmed surveillance drones from the U.S. despite protests from Iran, and Turkey currently is haggling with the U.S. for the purchase of the Predator and Reaper drones armed with Hellfire missiles and laser-guided bombs.
Iraq’s drone buy to shield its booming oil exports and oil platforms in the Gulf was part of a tentative $15 billion deal with the U.S. that included 36 F16 fighter-attack aircraft, and several M1AI Abrams tanks and armored personnel carriers to be used for “defensive purposes.”
The foreign sales were a means of keeping production lines open while also boosting national security, Terry said.
“It’s a win for our allies, and it’s a win for our Army,” Terry said.