Can India buy the C-17 if the US junks them?

[Neo]

Can India buy the C-17 if the US junks them?

May 7, 2010

The IAF is between a rock and a hard place. Its Russian ILYUSHIN-76
are grounded and its proposal to buy the C-17s from America is in jeopardy because the US doesn’t want to make any more of the cargo planes. The situation has been exacerbated by the fact that India has been unable to manufacture a military or civilian aircraft. All of India’s Migs are now grounded–this added to all its grounded air-craft make about half the Air Force.

LATE LAST month, the US Defence Security Cooperation Agency notified the American Congress of a potential sale of 10 Boeing C-17 Globemaster III to the Indian Air Force (IAF).

This evoked an instant reaction from US Ambassador to India Timothy J Roemer, who lauded it as a crucial step towards sharing the world’s best technology with India. And he detailed the economic benefits of the deal for both countries.

Air Chief Marshal PV Naik too has been quoted by India Strategic, a defence journal, as saying that the aircraft was selected after a thorough study and that it had the capability of taking off and landing on short runways with heavy loads.

Yet curiously, both US President Barack Obama and his Defense Secretary Robert Gates suddenly want the programe to end — because according to them the aircraft is a prime example of wasteful defence spending. It is too huge, they argue, and both favour smaller, smarter planes.

C-5M SUPER GALAXY
The C-5M from Lockheed Martin has improved digital programming and engine efficiency. The new C-5M has reduced dependency on tanker assets.

ILYUSHIN-76
This Russian aircraft is seen as a commercial freighter for ramp-delivered cargo of heavy items. It’s militarised version has limited weapons capability.

BOEING C-17
The multi-service C-17 easily carries large supplies and troops. It rapidly deploys a combat unit and sustains it with on-going supplies and tactical airlifts.

This is obviously worrying the IAF, which had initially planned to acquire 10 C-17s through the US government’s Foreign Military Sales (FMS) route. The total amount, pegged at $5.8 billion, includes all potential services offered. The actual cost, however — if the deal eventually does come through — will depend on the IAF’s final requirements. In an email interview, Boeing Military Aircraft spokesperson Jerry Drelling refutes the charges of the aircraft being overpriced, saying, “The C-17 is the only true tactical and strategic airlifter. It returns the best value for its cost. Owning and operating the C- 17 is cheaper than both the C-130Js or A400Ms that the USAF currently uses.”

Defence experts say the FMS route New Delhi is following is perhaps the best. It not only cuts down procurement delays, but also ensures the best deal, because the price is the same as what the USAF pays, with some minor handling charges added.

The IAF needs the C-17s to modernise India’s armed forces with new cargo capabilities, and as a replacement for its ageing Russian IL-76 fleet. Overall, India plans to spend more than $50 billion over the next five years on modernisation.

It will take near about three years after the contract is signed, for the aircraft to be delivered. Informed sources told TEHELKA that Boeing, the manufacturer, has already brought the C-17 several times to India for catwalks on IAF tarmacs and at various air shows, like Aero India 2007 and 2009.

New Delhi has 100-plus medium AN- 32 and fewer than 20 heavy lift IL-76 aircraft, the delivery of whose spares is often delayed. The reason routinely given is that this is because of the disintegration of the Soviet Union, where they were made. The IAF has already signed a $400 million contract with Ukrspetsexport, the Ukrainian military export agency, to upgrade 100 AN-32 cargo aircraft.

But there have been other issues as well. An IL-76 can carry a 45 tonne-plus cargo and has a crew of six, while a C-17 can carry nearly double the tonnage with a crew of three (two pilots and one loadmaster). “We believe the C-17 can fulfill India’s needs for military and humanitarian airlift to help meet its growing responsibilities,” Boeing India’s defence head, Vivek Lall said in a note.

But worries still remain. An estimated 5,000 workers at Boeing’s plant that makes the C-17 cargo plane are now trying hard to ensure the deal isn’t put on the mat, and hectic lobbying is under way to make the White House see reason. The National Public Radio recently quoted Long Beach City Councillor Robert Garcia as one of the aircraft’s defenders: “If the US is going to keep some of its manufacturing base, considering what we’ve lost, we’ve gotta start at home. C-17 is a part of that.” Boeing has produced the planes for Canada, the United Kingdom, Australia and Qatar. It’s on contract to deliver six C-17s to the United Arab Emirates and 10 to India.

Drelling remains upbeat. “We have tight budgets, but if we can extend this line further with international orders we do not have a problem,” he told TEHELKA. “The workforce here is one of the best in the world. You close a line like this, and you run the risk of losing a lot of those skill sets for a long, long time.”

Drelling found support from Air Marshall (retd) Harish Masand who feels New Delhi could eventually need more than 10 C-17s to cover what he calls infrastructure deficiencies, especially in the country’s northeastern parts.OBAMA AND GATES FEEL THE C-17 IS WASTEFUL DEFENCE SPENDING. THEY FAVOUR SMALLER, SMARTER PLANES

“It is a good replacement for the IL-76 with enhanced payload capabilities, advanced avionics and other systems,” says Masand. Agrees Air Vice-Marshal (retd) Kapil Kak, Additional Director, Centre for Airpower Studies: “By the time the fleet settles in, it will immediately fit in with the larger purpose. This was clearly evident from the experience of 26/11. One C-17 taking off from Delhi for Mumbai with about 350 men would have been enough.”

Adds Kak: “In 2010, the question we are faced with is: What are the IAF’s overall strategic heavy-lift needs going to be 30 years from now, and what kind of capacity do we need to build? Remember, the collective response within 48 hours by Australia, Japan, US and India during the 2004 tsunami — called for heavy airlift.”

Everyone agrees, except Obama and Gates. Maybe they know something others are not telling us. Gates Closing On C-17 Deal?

WHY IS INDIA BUYING THE C-17 WHEN BARACK OBAMA AND ROBERT GATES WANT TO JUNK IT, ASKS SHANTANU GUHA RAY
Jumbo deal Boeing could take upto three years to deliver ten C-17 aircraft to India at a cost of $250 million a piece.

Can India buy the C-17 if the US junks them?

[keysersoze]

I Wonder how accurate the report is?

[keysersoze]

Boeing Cuts C-17 Output by 33%, Awaits Foreign Orders (Update1)
February 23, 2010, 4:36 PM EST


By Susanna Ray

Feb. 23 (Bloomberg) -- Boeing Co., the second-largest defense contractor, is scaling back production of the C-17 military cargo plane by a third so it can extend the life of the assembly line while waiting for international orders.

Workers at the Long Beach, California, plant were warned in December and officially notified this month that jobs will be cut as part of the plan to reduce annual production, spokesman Jerry Drelling said today in a telephone interview. Boeing is still analyzing the impact on employment and profit, he said.

The plant has been in jeopardy as orders from the Pentagon dried up, and Boeing has said it would shut the factory in 2011 without more purchases. The aircraft’s backlog now stands at 36. Delays to the A400M, a competing transport plane built by European Aeronautic, Defence & Space Co., could help boost overseas interest in the C-17, Dennis Muilenburg, president of Boeing Defense, Space & Security, said last month.

“By reducing the production rate, this helps extend the line to continue to secure additional international orders,” Drelling said today. There’s interest from India and other Asian and Middle Eastern countries, he said. Boeing can’t negotiate with foreign militaries without U.S. approval.

The rate reduction has already begun and will be finished by mid-2011, Drelling said. Boeing has been delivering about 15 C-17s a year since 2001, and cutting the annual rate to 10 will extend the line through September 2012, Drelling said. There are about 5,000 workers at the plant now, and the aircraft’s supplier network supports 25,000 jobs in 44 states, he said.

Effect on Profit

The lower delivery rate in 2011 will reduce Macquarie Capital’s profit estimate by 12 cents to $4.05 a share, according to analyst Rob Stallard, who wrote today that he had expected production to be stable through 2011 before ending in 2012.

“However, we may have to add to our 2012 EPS estimate if Boeing is successful in dragging out the end of this program with exports,” Stallard wrote.

Boeing fell $1.20, or 1.9 percent, to $62.77 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have increased 16 percent this year.

The C-17’s backlog includes 19 planes intended for the U.S. Air Force and an expected order for an additional 10, after the U.S. Defense Department included money for the purchase in the 2010 defense bill, Boeing said. It also includes six planes for the United Arab Emirates and one for the U.K.

Boeing has also delivered C-17s to Qatar, Australia and Canada. The plane, used to transport troops and equipment, has an intercontinental range and can land on short and sandy runways.

Aviation Week first reported Boeing’s production cut earlier today.


--Editors: Steven Frank, Kevin Orland.

Boeing Cuts C-17 Output by 33%, Awaits Foreign Orders (Update1) - BusinessWeek