Vietnam, South Korea may buy Lockheed planes amid Chinese buildup

BERLIN - Vietnam and South Korea are looking seriously at buying refurbished Lockheed Martin Corp P-3 and S-3 maritime surveillance planes to counter China's military buildup and repeated North Korean missile launches, the company said. Vietnam is expected to request formal pricing and availability data on four to six older US Navy P-3 Orion aircraft in the next few months, Clay Fearnow, a senior executive with Lockheed's aeronautics division, told Reuters at the Berlin air show last week. The Obama administration's move to completely lift its arms embargo on Vietnam last month paved the way for such a sale, but any deal would still have to be carefully reviewed by the US government, according to US and Lockheed officials. A senior Vietnamese military official told Reuters over the weekend that significant weapons purchases are some way off. "We are not sure what we can buy from the US or what we want to buy," Deputy Defence Minister Nguyen Chi Vinh said in some of the first public comments from a Vietnamese defence official since the embargo was lifted. Washington's decision to permit lethal arms sales to Vietnam, its former enemy, underscored both countries' shared concerns about China's growing military clout. Vietnam, which borders China, is also a key part of President Barack Obama's efforts to rebalance US strategy toward Asia amid worries about Beijing's assertiveness and sovereignty claims to 80 percent of the South China Sea. If the sale goes through, retired US Navy P-3 turboprop planes now parked in a desert would be rebuilt with new wings, a new mission system and anti-submarine warfare equipment for Vietnam, Fearnow said. The cost could exceed the $80 million to $90 million price tag for each of the 12 P-3s rebuilt for Taiwan several years ago, given the added equipment, Fearnow said. Lockheed has built new wings or rebuilt aircraft for over 90 P-3 aircraft around the world, including the United States, Norway, Taiwan, Chile and Germany, since 2008, with some orders still in the works, Fearnow said. The company is scrambling to drum up more orders and extend its wing production line in Marietta, Georgia. Brazil and South Korea are each looking at ordering new wings for existing aircraft, but must decide by Sept. 1 to avoid a potentially costly gap in the supply chain for the wings, he said. Boeing Co is also marketing its P-8 Poseidon maritime surveillance plane, but it is significantly newer and more expensive than the P-3. Another possible competitor is Airbus Group SE's C295 plane, which is built in Spain. The US State Department said it could not comment on potential P-3 or S-3 sales until it formally notifies the US Congress. In addition to South Korea's interest in new wings for eight of its P-3s, Seoul is also looking at acquiring 12 of the US Navy's S-3 aircraft, which were retired in 2009 and are now parked in a desert, Fearnow said. He said Spain, Portugal and Argentina also had P-3 aircraft that could use new wings, but those countries all face budget pressures. Japan, which has about 100 P-3 aircraft, is replacing them with its own P-1 aircraft, and the US Navy is replacing its P-3 fleet with the Boeing P-8s. The Philippines also wants to expand its maritime surveillance capabilities, but is still defining its requirements, Fearnow said. -Reuters