Written by admin on Tuesday, September 24th, 2013
With dwindling defense budgets in the U.S., defense manufacturers are actively seeking out Mideast Foreign Military Sales (FMS) as an alternative source for new business. As production lines cease building U.S. military equipment companies are looking to continue production by reaching out to FMS customers, specifically oil-rich Mideast countries that are looking to grow their militaries.
BAE is working with U.S. and Iraqi officials to sell 200 Bradley fighting vehicles to Baghdad over the next 15 months and it’s expected that Saudi Arabia will buy numerous Bradleys in 2015. The potential sales will be welcome news for BAE as the company has had to reduce its staff from 650 employees down to 335 in its Michigan facility and the purchase would increase production line activity and possibly support the rehiring of employees.
Likewise, Boeing is aligned to sell their CH-47 Chinook helicopters to Libya, Saudi Arabia and Qatar in the coming years. Negotiations are underway between U.S. officials and the three countries to purchase at least 54 Chinooks. Libyan officials are looking to purchase six CH-47D models and 16 CH-47F models while Saudi Arabia is looking to field at least 24 CH-47Fs. In addition, Qatar is interested in purchasing eight CH-47F Chinooks and also looking to purchase either the Boeing F-15 Eagle or potentially the FA-18E/F Super Hornet. Also, the U.S. announced on 26 August 2012 a deal of $500 million to sell eight Boeing AH-64 Apache helicopters to Indonesia and an additional deal to purchase 24 F-16C/D aircraft from Lockheed Martin.
Mideast Foreign Military Sales have been on the rise since domestic spending has been on the decline and manufacturers continue to fight to keep their production lines open. Keeping production lines open for high technology equipment is essential for a company to be successful and profitable as stopping a line forces companies to either mothball the line while waiting for new customers or disassemble the line if no new customers materialize, both options cost money in infrastructure costs as well as in personnel costs. To keep lines open in a very competitive environment, the U.S. military industry is being forced to seek out greener pastures for new business and the Mideast provides a source that is both willing and fiscally capable of purchasing new military hardware.
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