An Offset Success StoryAn Offset Success Story
Erwin H. BooneErwin H. BooneRegional Manager Industrial Cooperation Regional Manager Industrial Cooperation
Lockheed Martin AeronauticsLockheed Martin Aeronautics
A08-24623
BackgroundBackground
•• In the Late 1980s, the Economy of South Korea Was In the Late 1980s, the Economy of South Korea Was Expanding Based on the Commercial SectorExpanding Based on the Commercial Sector
•• However, the Korean Government Wanted toHowever, the Korean Government Wanted to−− Modernize the Modernize the RoKAFRoKAF Fighter ForceFighter Force−− Develop an Indigenous Aerospace IndustryDevelop an Indigenous Aerospace Industry−− Infuse New Technologies and Capabilities Infuse New Technologies and Capabilities
Into the Defense SectorInto the Defense Sector
•• The Use of Industrial Cooperation / Offset Was Seen The Use of Industrial Cooperation / Offset Was Seen as a Means of Satisfying Multiple Requirementsas a Means of Satisfying Multiple Requirements
Korea Adopted a Strategic Approach to OffsetsKorea Adopted a Strategic Approach to OffsetsKorea Adopted a Strategic Approach to Offsets
LM Aero Partnership With KoreaLM Aero Partnership With Korea
•• The First Procurement of The First Procurement of FF--16s Under the 16s Under the ““Peace Peace BridgeBridge”” Program Began a Program Began a LongLong--Term Relationship To Term Relationship To Develop Advanced Aircraft Develop Advanced Aircraft Capabilities in Korea Capabilities in Korea
•• Korean Industry Built 40 Korean Industry Built 40 Center Fuselages Center Fuselages
•• Besides Besides CoproductionCoproduction, , Offset Also Resulted inOffset Also Resulted in−− Technology TransferTechnology Transfer−− Engineering TrainingEngineering Training
Strategic Approach to Grow the Aerospace IndustryStrategic Approach to Grow the Aerospace Industry
LM Aero Partnership With Korea LM Aero Partnership With Korea (Cont(Cont’’d)d)
•• The Korea Fighter The Korea Fighter Program (KFP) Expanded Program (KFP) Expanded the Relationship To the Relationship To Develop Indigenous Develop Indigenous Aircraft CapabilitiesAircraft Capabilities−− Phase 1: Purchase of Phase 1: Purchase of
12 F12 F--16s Built in Texas16s Built in Texas−− Phase 2: Assembly in Phase 2: Assembly in
Korea of 36 FKorea of 36 F--16s 16s From KitsFrom Kits
More Than 100 FMore Than 100 F--16s Built in Korea Under License 16s Built in Korea Under License
−− Phase 3: Full Production in Korea of 72 FPhase 3: Full Production in Korea of 72 F--16s 16s
•• KFPKFP--II Built 20 Additional Production FII Built 20 Additional Production F--16s in Korea 16s in Korea
KFP Offset ProgramKFP Offset Program
•• Extensive Technology Extensive Technology Transfer to Korean IndustryTransfer to Korean Industry−− More Than 600 Engineers More Than 600 Engineers
Were Trained in the U.S.Were Trained in the U.S.−− Large Volumes of FLarge Volumes of F--16 16
Technical Data Were Technical Data Were Transferred to Korea Transferred to Korea
•• Market Assessments, Market Assessments, Feasibility Studies, and Feasibility Studies, and Preliminary Design of a New Preliminary Design of a New Advanced Jet Trainer Advanced Jet Trainer
KTXKTX--2 (T2 (T--50) Began as a KFP Offset Project50) Began as a KFP Offset Project
Advanced Advanced TrainerTrainer
MultiroleMultiroleFighterFighter
Other Multirole Fighters, Except the FOther Multirole Fighters, Except the F--16, 16, Had a Complimentary Advanced TrainerHad a Complimentary Advanced Trainer
F/AF/A--1818 TyphoonTyphoon MiGMiG--2929 FF--1616
??
Lockheed MartinLockheed Martin’’s Perspectives Perspective
Advanced Jet Trainer Would Compliment FAdvanced Jet Trainer Would Compliment F--1616
• Capability Gap Between RoKAF’s Jet Trainers and Frontline Fighters Continues To Increase
• Operational Transition Training Time Continues To Increase
Current Advanced Jet Trainers Current Advanced Jet Trainers on the Market Lack . . . on the Market Lack . . .
•• Aero PerformanceAero Performance•• Modern Glass CockpitModern Glass Cockpit•• Digital Flight ControlsDigital Flight Controls•• StateState--ofof--thethe--Art AvionicsArt Avionics•• Training Sortie DurationTraining Sortie Duration
. . . Needed To Bridge the Gap. . . Needed To Bridge the Gap
F-4F-5E/F
F-16Blk32
KFPF-16Blk52
F-15K
FXX
BasicPrimary
F-5BT-38Hawk
Capability Gap
CurrentTrainers
Fighter Aircraft
Republic of Korea Air Force SituationRepublic of Korea Air Force Situation
KAI Proprietary Information
Market PotentialMarket Potential
• Study of 50 Country’s Requirements Over Next 25 Years• Replacement of Jet Trainer and Light Combat Aircraft
Significant Number of Aircraft Need To Be ReplacedSignificant Number of Aircraft Need To Be Replaced
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 25 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 300 21 22 23 24 25 26 27 28 29 30
Ann
ual A
ircra
ft R
epla
cem
ent N
eeds
Ann
ual A
ircra
ft R
epla
cem
ent N
eeds
350350
300300
250250
200200
150150
100100
5050
00
AJT / FLI – Advanced Jet Trainer / Fighter Lead-InLCA – Light Combat Aircraft
Market Studies Led to LM InvestmentMarket Studies Led to LM Investment
Investment Based Upon Sound Business, Not OffsetInvestment Based Upon Sound Business, Not Offset
19881988 19901990 19921992 19941994 19961996 19981998 20002000 20022002 20042004 20062006 20082008 20102010
Korean Fighter ProgramKorean Fighter Program
KFPKFP--IIII
• F-16 Licensed Production• T-50 Additional Capabilities Studies• T-50 Marketing Studies
• F-16 Licensed Production• T-50 Additional Capabilities Studies• T-50 Marketing Studies
KTX-2 T-50 FA-50
• F-16 Center Fuselage Production• Training / Tech Transfer•• FF--16 Center Fuselage Production16 Center Fuselage Production•• Training / Tech TransferTraining / Tech Transfer
• F-16 Coproduction• F-16 Licensed Production• KTX-2 Feasibility Studies• Embedded Training Studies• Advance Trainer Market Studies
•• FF--16 Coproduction16 Coproduction•• FF--16 Licensed Production16 Licensed Production•• KTXKTX--2 Feasibility Studies2 Feasibility Studies•• Embedded Training StudiesEmbedded Training Studies•• Advance Trainer Market StudiesAdvance Trainer Market Studies
Lockheed MartinLockheed MartinInvestmentInvestment
20122012
FF--16 Peace Bridge16 Peace Bridge
Funding and InvestmentFunding and Investment Work ContentWork Content
TT--50 Is an International Program50 Is an International Program
55%55%
44%44%
OthersOthers1%1%
70%70%
13%13%
17%17%
FullFull--Scale Development Program Value of $2.1 BillionScale Development Program Value of $2.1 Billion
Korea Aerospace IndustriesKorea Aerospace Industries•• Prime ContractorPrime Contractor•• Aircraft Design and IntegrationAircraft Design and Integration•• Major Component FabricationMajor Component Fabrication•• MateMate--ThruThru--DeliveryDelivery
LM AeroLM Aero•• Investor and Principle Investor and Principle
Subcontractor in FSDSubcontractor in FSD•• Flight Control, Avionics and Flight Control, Avionics and
Wing DevelopmentWing Development•• Technical AssistanceTechnical Assistance
Aerospace Industry LeadersAerospace Industry Leaders
Republic of KoreaRepublic of Korea•• Government: Funding and OversightGovernment: Funding and Oversight•• RoKAF: Program Manager, Flight RoKAF: Program Manager, Flight
Test, User, Test, User, Subject Matter Subject Matter ExpertsExperts
TT--50 Team50 Team
Dedicated To Providing the WorldDedicated To Providing the World’’s Best Jet Trainers Best Jet Trainer
MarionComposites
RockwellBFGoodrichAerospace
Established Structure for WorldEstablished Structure for World--Wide MarketingWide Marketing
Joint Marketing AgreementJoint Marketing Agreement
•• KAI and LM Aero Signed a Joint KAI and LM Aero Signed a Joint Marketing Agreement (JMA) in Marketing Agreement (JMA) in November 2000November 2000–– KAI Responsible for Marketing KAI Responsible for Marketing
TT--50 in Korea50 in Korea–– LM Aero Responsible for LM Aero Responsible for
Marketing TMarketing T--50 in U.S. 50 in U.S. –– KAI / LM Jointly Market KAI / LM Jointly Market
TT--50 Internationally50 Internationally
Program StatusProgram Status
• Phase I (Preliminary Design)Completed December 1995
• Phase II (Full-Scale Development)October 1997 ~ December 2005
• Phase III (RoKAF Production) December 2005 ~ 2015
• Phase IV (International Sales)
Production
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 1110
PreliminaryPreliminaryDesignDesignPhasePhase
First FlightFirst FlightAug 2002Aug 2002
First DeliveryFirst DeliveryDec 2005 Dec 2005
RolloutRollout31 Oct31 Oct
OMLOMLBridgeBridge
ProgramProgramCDRCDR
PreliminaryDesign
Full-Scale Development
DesignDesign
DevelopmentDevelopment
ProductionProduction
1312 14 15
FullFull--Scale Development Scale Development Program StatusProgram Status
•• Flight Test ProgramFlight Test Program–– Four Flight Test AircraftFour Flight Test Aircraft–– 1,411 Sorties Flown1,411 Sorties Flown
•• Ground Test ProgramGround Test Program–– Static Loads Testing CompletedStatic Loads Testing Completed–– Second Lifetime Durability CompletedSecond Lifetime Durability Completed–– Environmental Testing CompletedEnvironmental Testing Completed
•• Integrated Logistics Support (ILS) and Integrated Logistics Support (ILS) and GroundGround--Based Training System (GBTS)Based Training System (GBTS)–– Developed Simultaneously With Developed Simultaneously With
TT--50 Aircraft50 Aircraft–– Initial Systems Delivered To Support Initial Systems Delivered To Support
RoKAF OperationsRoKAF Operations
Development Program Completed!Development Program Completed!
•• Initial Production ContractInitial Production Contract–– Signed December 2003Signed December 2003–– Delivered All 25 AircraftDelivered All 25 Aircraft
•• FollowFollow--On Production ContractOn Production Contract–– Signed October 2006Signed October 2006–– 47 Aircraft47 Aircraft
•• ““Black EagleBlack Eagle”” Aerial Aerial Demonstration TeamDemonstration Team–– 10 Additional Aircraft10 Additional Aircraft–– Contract Signed March 2008Contract Signed March 2008
•• FAFA--50 Light Attack Variant50 Light Attack Variant–– 60 Aircraft (Future)60 Aircraft (Future)
Production Program StatusProduction Program Status
RoKAF Production Program on ScheduleRoKAF Production Program on Schedule
TT--50 Growth50 Growth
One Aircraft for Both Trainer and Light CombatOne Aircraft for Both Trainer and Light Combat
•• TrainerTrainer–– AJT / LIFTAJT / LIFT–– WSOWSO–– CompanionCompanion–– Aggressor / DissimilarAggressor / Dissimilar–– Pilot CurrencyPilot Currency
•• Light CombatLight Combat–– Homeland DefenseHomeland Defense–– Close Air SupportClose Air Support–– ReconnaissanceReconnaissance
900+ Aircraft Potential Worldwide Through 2030900+ Aircraft Potential Worldwide Through 2030
•• ROKAF: 100ROKAF: 100––300300
•• International: 600+International: 600+
Market PotentialMarket Potential
KTXKTX--2 / T2 / T--5050
Lockheed MartinLockheed Martin
KFP-1Offset
KFP-2Offset
T-50Development
KAIKAI International SalesInternational Sales
WorkWork--shareshare
T-50Offset
InternationalInternationalCustomersCustomers
International OffsetInternational Offset
TT--50 Offset Evolves50 Offset Evolves
Preparing Offsets to International CustomersPreparing Offsets to International Customers
Questions?Questions?