Lockheed launches RAF bid

THE US defence contractor, Lockheed, yesterday launched its bid to replace the RAF's ageing fleet of Hercules transport aircraft by claiming that it would help to generate 1,500 high-technology jobs and more than pounds 1bn worth of business for Britain.

Eighteen UK defence firms, led by Westland, GEC-Marconi, Lucas and Hunting Aviation, are backing Lockheed's offer to supply the RAF with the latest version of the Hercules, the C-130J, at a cost of pounds 750m-pounds 900m.

However, British Aerospace and Marshall's of Cambridge are promoting a rival bid to refurbish the RAF's existing Hercules at a cost of about pounds 300m and then replace them early next century with the Future Large Aircraft - a pan-European development involving BAe.

Lockheed puts the worldwide market for the C-130J at 400 aircraft. That translates into orders worth pounds 1.2bn for the British subcontractors that have already invested pounds 70m in the programme and will carry out 13-15 per cent of the work. Their share of any RAF order, initially for 30 aircraft, would be about pounds 100m.

In addition to the 1,500 direct jobs, Lockheed estimates that a further 6,000 indirect jobs would be created among suppliers. But BAe claims that buying the American aircraft off the shelf could put thousands of jobs at risk and rob Britain of a share in export orders worth pounds 3bn-pounds 7bn.

These are the first shots in a lobbying campaign that is certain to grow more intense as the Ministry of Defence weighs the rival offers. Lockheed expects to be invited to tender in the next few days. A decision is expected by the end of this year.

Mickey Blackwell, president of Lockheed Aeronautical Systems, disputed BAe's claims, saying the work on offer and jobs created would be broadly the same whether the RAF chose the US or the European option.

He also disputed the cost of refurbishing the existing Hercules, which are 20 to 30 years old, saying: 'There is no such thing as a cheap refurbishment and no one has ever attempted to refurbish aircraft that old.'

Speaking for Lockheed's 18 UK partners, Gordon Williams, chairman of Hunting Aviation, said: 'It means real jobs and real revenue for each of us now and in the future. What's more, it keeps us up with the hunt for follow-on and associated business.'

The RAF could order replacement Hercules now and buy the larger FLA next century, but BAe fears that the project could collapse if Britain chooses not to be the launch customer.