Sat, Jul 12, 2003 - Page 3 News List

US firms mulling sub contract

TEAMWORK Lockheed Martin and Raytheon are considering working with Northrop Grumman or General Dynamics to build eight diesel submarines for Taiwan's navy


Lockheed Martin and Raytheon are "viable" candidates to team with either Northrop Grumman or General Dynamics in building diesel submarines for Taiwan, a top US Navy admiral said.

The Navy will ask the companies for proposals within two months of receiving Taiwan's commitment for the money to design and build up to eight diesel submarines, Rear Admiral John Butler, the Navy program executive officer for submarines, said.

The George W. Bush administration offered Taiwan the submarines in 2001 as part of an arms package to counter the threat from China. China has 69 attack submarines; Taiwan has four.

The package -- which includes anti-submarine reconnaissance aircraft, four destroyers and missiles -- has been delayed as lawmakers debate defense spending.

Butler's comments to reporters in Washington are the first update on the issue in months. He said Navy officials in Taiwan say they can't commit funds until 2006 and Raytheon and Lockheed will vie to help build the submarines.

Northrop and General Dynamics, the only two US makers of submarines, will compete for the work.

"I expect the two shipbuilders to team up with whoever they want," Butler said.

The program's value hasn't been estimated.

Butler said the four companies were briefed on the Navy's notional plans. Lockheed and Raytheon participate in numerous Navy programs as systems integrators of complex electronic combat systems, radar, fire control and combat identification.

"The Taiwanese said last month that they don't believe they can get the money obligated against this program before 2006," Butler said.

"We believed that they would obligate funding in 2004 and we were ready to go in 2004," he said. "If they get us those funds earlier, we'll back the schedule up."

"We are certainly interested but we haven't teamed with any hull-maker at this time," said David Shea, a Raytheon spokesman.

"We are very interested in participating in the Taiwan submarine program," Lockheed Martin spokesman Jeff Adams said, without elaboration.

Northrop Grumman would build the submarines at its Pascagoula, Mississippi, facility and is still exploring its options as to US teammates and potential foreign subcontractors, Randy Belote, a company spokesman said.

General Dynamics' Electric Boat unit, Groton, Connecticut, is also exploring its options but hasn't determined where the submarines would be built, Neil Ruenzel, a EB spokesman said.

US President George W. Bush "made a commitment to help Taiwan procure its diesel-electric submarines," Pentagon spokesman Commander Jeff Davis said. "That was a commitment made in earnest and we intend to deliver on it."

Taipei has yet to commit funding for any of the major weapons programs Bush proposed in the April 2001 package although they are close to advising the Pentagon they plan to buy the destroyers, Lieutenant General Tome Walters, the director of Defense Security Cooperation Agency, said in an interview.

Legislators have been debating how much to spend on defense and what systems should be procured first, according to Shirley Kahn, an Asia affairs expert with the non-partisan Congressional Research Service.

The submarines, for example, were estimated by officials to require at least US$4.5 billion, the most costly element of the April 2001 package, Kahn said. The four Kidd-Class destroyers were estimated to cost about US$800 million, she said.

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