The world's largest defense corporation, Lockheed Martin, yesterday denied a report that it will withdraw from a joint venture to maintain military aircraft here.
Lockheed Martin's Taiwan office said the company is considering the possibility but has not made a final decision.
It made the statement yesterday in response to a report in a Chinese-language newspaper that said it had decided to pull out of a military-aircraft repair and maintenance business because its local partners insisted it hold no more than a 40 percent stake in the joint venture.
A spokeswoman for the office said that Lockheed Martin had differed with its partners over what stake it should have.
"Lockheed Martin is still negotiating with local investors over the issue," the spokeswoman said, declining to go into details.
The government, led by the Ministry of National Defense and the Ministry of Economic Affairs, has decided to open up certain aspects of military services to the private sector, including aircraft maintenance.
This involves privatizing several of the air force's aircraft depots, starting next year.
Under the privatization plan, the Taichung-based second depot will be the first to be privatized, becoming a government-owned and contractor-operated (GOCO) company.
Minister of National Defense Tang Yao-ming (
Lockheed Martin signed an agreement last year with four local companies to form a GOCO business. The four companies are: the state-run Aerospace Industry Development Corp (AIDC); Air Asia, China Airlines and Evergreen Aviation Technology Corp.
Under the agreement, a new company -- called Aviation Technology Services -- was established late last year to handle the GOCO business.
Lockheed Martin initially asked to hold 45 percent of the shares of the company, but later agreed to take a smaller share, 40 percent, after negotiations with other investors.
However, last month the legislature's Committee of National Defense agreed on a resolution limiting the Lockheed stake to 20 percent.
The resolution has now become a major obstacle to the venture and has elicited complaints from Lockheed Martin.
Local investors have continued negotiations with Lockheed but no agreement has been reached.
In yesterday's newspaper report, unidentified government officials blamed AIDC for the standoff, saying the company had taken on the role as leader of the local investors in the project.
An official with AIDC, who declined to be identified, said yesterday the accusations were unfair to AIDC since it was the legislature that demanded the 20 percent limit on Lockheed Martin's stake.
"We do not want Lockheed Martin to withdraw from the business. We need their investment," the official said.
Some, though not all, local investors are unhappy about the dominant role Lockheed Martin is seeking in the venture, sources said, so they sought help from lawmakers.
Defense committee lawmakers were unavailable for comment yesterday.
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