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Newsletter May 2013

SPEAK OUT

A Vote of Confidence for Greece

Dennys Plessas of Lockheed Martin Aeronautics/International on the recent agreement between Lockheed Martin Aeronautics and Hellenic Aerospace Industry.

With the opportunity of the recent agreement between Lockheed Martin—the largest aerospace technology and defense corporation in the world—and HAI—the largest Hellenic defense industry, we met with Mr. Dennys Plessas, Lockheed Martin Aeronautics/International Vice President for Business Development Initiatives, to discuss this major strategic cooperation, indisputably providing Greece a vote of confidence from the American defense giant.

Congratulations for this important cooperation between Lockheed Martin and HAI. To what is it due? What exactly does it mean for the Hellenic defense industry?
The specific agreement is the result of a major Lockheed Martin effort to assist HAI in becoming technologically and financially competitive. For 70 years now, Lockheed Martin has developed a strategic cooperation with the Hellenic Armed Forces and the Hellenic defense industry based on mutual trust, absolute transparency, and the achievement of common goals for the defense and security of Greece. Within this scope, Lockheed Martin has subcontracted to HAI a considerable workload for the manufacture and assembly of structural parts for the F-16 and C-130J aircraft. The subcontract work under consideration is worth hundreds of millions of dollars and is realised following significant investment initiatives by Lockheed Martin concerning leading-edge technological know-how, modern facilities, and the requisite technological equipment.  The latest signed agreement, amounting to 38 million dollars for the year 2014, pertains to the extension of the five-year “mid panels and plugs” co-production programme for the C-130J transport aircraft, while the negotiations for a new extension of the C-130J co-production agreement is under way for the 2015-2019 period. The value of this new programme is expected to be over 100 million dollars. Meanwhile, a five-year (2012 – 2017) agreement worth 114 million dollars is in effect since the beginning of 2012, concerning the extension of the programme for F-16 assemblies. The total amount of all the new programs above exceeds 250 million dollars. It should be stressed, however, that during the last seven years HAI has become Lockheed Martin's sole source, worldwide, for specific F-16 fighter aircraft structural assemblies (about 30% of the fuselage). The F-16 and C-130J co-production programmes are expected to provide for over 700 permanent job positions.

Many years ago, the Greek State awarded a contract to Lockheed Corporation for the design and establishment of Greece’s new aerospace facility – HAI. Today this company is a major supplier to Lockheed Martin. Could you describe to us this relationship?
The relationship between Lockheed Martin and HAI is known, as Lockheed Martin was the company to which the Hellenic Government entrusted in 1976 the planning and the development of a modern aircraft industry aiming at meeting the needs of the Hellenic Armed Forces, as well as to the creation of a strong industrial base for the aerospace sector. Lockheed Martin is proud for completing the establishment of HAI in less than three years, a record time by any standards. It is remarkable that in 1979 the newly-established industry was able to undertake for the first time the overhaul of the Hellenic F-4 fighters. Since then, HAI's development has been quite rapid. Soon, under Lockheed Martin's guidance and technical assistance, HAI developed capabilities for the general overhaul of many aircraft and helicopter types, as well as for hundreds of their accessories. The first major international success came with the undertaking of the programme for the general overhaul of the J-79 engines in USAFE's F-4 fighter aircraft. The acquisition of F-16 fighters by four different Hellenic governments within the last 25 years provided HAI with the opportunity for developing even further by claiming major programmes through the system of Offset Benefits (OB). The accumulated expertise of HAI employees, combined with the continuous provision of technical know-how by Lockheed Martin, led HAI to an even higher level, through the undertaking of the Hellenic Air Force F-16 fighter structural upgrade programmes (FALCON UP and FALCON STAR). The close cooperation with LM was catalytic for the undertaking by HAI of USAFE's F-16 fighter upgrade programme. The programme was concluded recently with absolute success and HAI, with LM's technical assistance, delivered about 100 upgraded 4th generation F-16 fighters to USAFE, serving the highest praise from the US Air Force for the professionalism of its employees.

Of course, the co-production programmes to which I referred earlier comprise of the most important factual and substantial proof of the assistance being offered by Lockheed Martin to HAI during the current difficult times. Indeed, this co-production comprises a considerable business boost – not only for HAI but for the Hellenic industry in general.

What is Lockheed Martin’s experience with the Hellenic OB programmes? What would you say to HAI today in order to exploit this opportunity and to successfully implement this project?
Lockheed Martin, within the frame of the F-16 fighter acquisition, has implemented during the last twenty years, with absolute success, a number of Offset Benefit programmes aiming not only at the upgrade of the Armed Forces operational capabilities but also at the augmentation of the manufacturing and repair capabilities of the domestic defense industry; HAI's in particular. The transfer of technological know-how to HAI and the development of new infrastructure constituted key factors for the development of the company. New facilities (like the aircraft dry-stripping unit), but also the expansion of the aero-structures hangar comprise today key assets for HAI's future. I should tell you that in most cases we did not stop at the narrow confines of the OBs; we willingly advanced our cooperation many notches ahead, the most characteristic example being the co-production of C-130J major structural components, which does not constitute an obligation from an OB contract. The specific subcontract work was awarded to HAI despite the strong international competition and the pressures exerted by a number of European, Middle East, and African countries, several of which already have or intend to acquire the C-130J.

HAI is today able to respond to the challenges of the times. Continuous efforts from all its personnel is necessary in order to maintain the high level of quality and manufacture, the observance of delivery schedules with quality standards compliance, and the maintenance of cost at competitive levels. These are the elements securing the unimpeded continuity of the co-production programmes.

I believe that extroversion and consistency, combined with the experience and the technical know-how acquired by HAI from its cooperation with Lockheed Martin in the F-16 and C 130J co-production programmes, comprise a guarantee for further development of the company, the attraction of new investments, and for ensuring job positions that our country is today so much in need of.

Lockheed Martin has celebrated recently its 100 years in business.  Would you comment about this accomplishment?
During these years, Lockheed Martin employees have left a strong technological mark along the course of aerospace technology.  Lockheed Martin laboratories and factories hosted the development of some of the most advanced and technologically pioneering achievements of aviation and aerospace technology.

The most essential element of these 100 years of operation, however, is that Lockheed Martin advanced the aerospace science, so much at the basic research level, as well as in industrial applications. This technological leadership provided the company with tens of industry firsts and world records—so much in aviation, as well as in the aerospace sector. In recent years the company has expanded its activities in the areas of electronics, defense systems, informatics, and energy. Today, Lockheed Martin is continuing its technological leadership with an emphasis on finding solutions for our customers, with consideration for the environment and absolute adherence to transparency.

Which programmes do you see advancing in the future towards the reinforcement of the Hellenic Armed Forces deterrence capability?
The Greek defense industry but also Greece is today, more than ever, in need of participating in large international defense programmes, providing a large increase to Greece’s deterrence capability while affording at the same time the capacity for developing and maintaining the domestic industry. The usage of HAI's infrastructure and technical abilities contribute towards this end. The programmes for the upgrade of the Hellenic F-16 fleet and the P-3C MPA are excellent representative cases. The upgrade of the F-16s, in addition to the substantial operational and technical-financial advantages offered to the Hellenic Air Force, will constitute for HAI an important financial objective, as:

• It will secure 400-450 job positions for a time span of more than six years.
• The technical know-how and the infrastructure already developed for the USAFE programme will be fully exploited, while
• It will afford the capability for contesting similar upgrade contracts for third-country F-16s.
 
Corresponding benefits, although at a lesser scale, will also be afforded by the acquisition and the upgrade of P-3C marine cooperation aircraft, the only aircraft in the world that can respond to the modern marine surveillance missions in the SE Mediterranean and the Hellenic Exclusive Economic Zone (EEZ) under proclamation.

Lockheed Martin, respecting the challenging financial situation is offering today to the Hellenic Armed Forces modernisation and upgrade programmes for existing weapon systems, yielding the maximum operational advantage combined with the least possible cost. All these initiatives are also connected with significant financial and technological investments in Greece.