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  August 17, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  Reform efforts in South Korea create ecosystem for defense industry growth

  By: Mike Yeo MELBOURNE, Australia — South Korea has over the past decade become a defense industry powerhouse in its own right, and it's seeking to widen its reach, with progress in international markets in recent years marking the maturity of its defense articles. This year's Defense News Top 100 list of the biggest defense companies in the world features four South Korean businesses. They are Hanwha (ranked 32rd), Korea Aerospace Industries (55th), LIG Nex1 (68th) and Hyundai Rotem Company (95th), all of which made last year's list. Continued reform The strong performance of South Korean defense companies comes in the wake of a series of reforms over the past decade, with the latest designed to consolidate industrial gains and create momentum for growth. The defense industry reforms are part of President Moon Jae-in's Defense Reform 2.0 program announced in 2018 — a complement to efforts seeking to create a slimmer, yet more efficient South Korean military that is less reliant on foreign defense technology. The push for further self-reliance is most prominent in Korea Aerospace Industries' KF-X program. KAI is developing a next-generation fighter for the South Korean Air Force. Although an American GE F414 turbofan will power the aircraft, its avionics will primarily be indigenous. These include the active electronically scanned array radar under development by Hanwha and the country's Agency for Defense Development, with support and some components supplied by Israel's Elbit Systems. Defense Reform 2.0 also puts emphasis on defense industry investment, and it comes as little surprise that the domstic market still takes up the biggest share of the pie where sales are concerned, backed up by the steady growth in defense spending: South Korea's defense budget grew 20 percent from 2009 to 2017, reaching $43 billion. Export success The reform program also places an increased priority on defense exports. The country is already successful in this area, with research by the Stockholm International Peace Research Institute think tank showing the country was the 11th biggest arms supplier in the world in 2017, with sales totaling $5.5 billion. In a further indication of how much South Korea's industry has grown, SIPRI also noted in a 2018 report that the country's defense exports grew 94 percent in the 10 years prior, a growth figure only bettered by Turkey for the same period. This growth has been underpinned by two of the highest-profile South Korean defense exports in the past decade: the KAI T-50 Golden Eagle family of trainer and light combat aircraft, and the Hanwha K9 Thunder self-propelled howitzer. The T-50 was earmarked by the Air Force as its mainstay advanced trainer and light combat aircraft. Despite losing a number of trainer competitions, including in Poland, Singapore and the United States, the Golden Eagle has since scored a number of notable contracts for export. Compared to its rivals in the trainer market, such as the Leonardo M-346 and the Boeing T-7, the main draw of the T-50 family is its combat capability in the form of the TA-50 and FA-50 equipped with sophisticated combat capabilities in the form of radars and precision weapons employment capability. This makes the aircraft attractive to nations unable to afford a high-end trainer with a light attack capability, and the list of the type's customers bears this out, with Indonesia, Iraq, the Philippines and Thailand operating the type in their respective air forces. The Philippine Air Force used its FA-50PH fleet to attack Islamic State militants in the southern part of the country in 2018. Meanwhile, Hanwha's K9 Thunder has carved a niche for itself in the global market for self-propelled howitzers. The 52-caliber, 155mm system has been selected by a number of NATO nations, beating out the similar Panzerhaubitze 2000 by Germany's Rheinmetall in Estonia, Finland and Norway. Turkey is building the K9 under license as the T-155 Firtina. The system has also been selected for license production by India and Poland, and had previously been selected by Australia in the early part of the 2010s only to be canceled following budget issues caused by the global financial crisis. Hanwha is also one of two companies left in the running to supply the Australian Army with a new infantry fighting vehicle. The AS21 Redback, which is based on the K21 vehicle operated by the South Korean Army, is to take part in an evaluation program against the Rheinmetall KF41 Lynx to supply 450 vehicles to replace M113 armored personnel carriers. The evaluation will see three of each vehicle delivered to Australia for testing, with the first two Redbacks due to reach Australia at the end of August, having left South Korea by ship late last month. Post-pandemic support Like much the rest of the world, the COVID-19 pandemic has hit South Korea hard, though the worst appears to be over for the country. The local defense industry was forced to adjust financially and operationally, and it remains unclear how revenue will be hit by the events of 2020. The pandemic has claimed at least one sale for the South Korean defense industry, with Argentina, which had appeared set to be the next customer for the T-50 family, deciding in April to put off the acquisition indefinitely. The South American country is yet to sign a contract, despite choosing the aircraft for purchase in July 2019. However, the South Korean government is not waiting for foreign action. Defense Minister Jeong Kyeong-doo has unveiled plans for the country to spend more on locally produced defense articles, partly as a move to help curtail the effects of the pandemic. Jeong said during a mid-June meeting with industry CEOs that his ministry plans to adjust spending plans to continue its drive to spend more on indigenous products, and move delivery timelines to reflect the reality of schedule delays while also waiving penalties for late payments. He also plans to expand an existing strategy aimed at establishing “defense industry innovation clusters”; this move adds to the first one established in April with an initial government investment. As a result, more funding will be made available to industry and research institutes, and will be used to support regional collaboration in defense-related research and development as well as manufacturing. https://www.defensenews.com/top-100/2020/08/17/reform-efforts-in-south-korea-create-ecosystem-for-defense-industry-growth

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  August 12, 2019 | International, Aerospace

  Finland’s Air Force chief tackles recruiting challenges and its quest for a future fighter

  By: Valerie Insinna TIKKAKOSKI, Finland — The Finnish Air Force is changing. In a matter of years, it will decide on its future fighter — a €7-€10 billion (U.S. $7.8-$11.2 billion) program that could tie Finland more closely to the country that wins the competition. It's revamping its command-and-control infrastructure. And like other international air forces, it's putting increased pressure on itself to boost readiness. Maj. Gen. Pasi Jokinen, who became the commander of Finland's Air Force in April, oversees the transformation. The job has its perks: During U.S. Air Force Chief of Staff Gen. Dave Goldfein's trip to Finland in July — his first visit to the nation — the two officers took a break from meetings and sat backseat in two Finnish F/A-18 Hornets for a training mission. Goldfein later said the flight signified the growing trust between the two air forces. Jokinen spoke on July 21 with Defense News, which traveled to Finland with Goldfein, about the service's readiness challenges and its modernization priorities. Tell me about your conversation here today with Gen. Goldfein. Well, we talked about a lot of interesting topics. We talked about the operation environment and the Finnish Air Force and what we do here, and the cooperation with the U.S. and all that. He obviously was aware of a lot of things, but we went into very good detail about everything like that. We know what's happening here, we are strongly here, we are committed here and everything is running smoothly. You said you talked about the operational environment for Finland right now. Can you characterize that, and is it changing? Well, I think we have been using that word “new normal” after Crimea and after 2014, so activity in the Baltic region and in this region is in a little bit elevated level — let's put it that way. And of course our eastern neighbor is actively doing things in Syria and eastern Ukraine. It has had some effects. It seems that they have this big exercise cycle, [in] running the Zapad [exercise] and how they rotate the different regions. In 2017 we saw again this western Russia exercise, and it was noted. It was at peak activity level. Activity-wise, 2017 was the highlight, and now we are calmed down a little bit, but still we are above the level before 2014. Is it fair to say that the number of intercepts peaked in 2017? Yeah, well, when their activity is high, our activity is high. And of course the Gulf of Finland, which is the international airspace nearby our border, that's one of the areas of interest. You used the word “intercepts,” though; that activity is there. I mean, of course then they are operating also in the other, the northeast and eastern border, but that's a solid border. I mean, obviously they are on their side and we are on our side. Then the international airspace where we meet, OK. The Gulf of Finland is mainly transit for mainland Russia to Kaliningrad and back, and in the southern Baltic Sea, or the Baltic sea down more south, there's more room to maneuver, do stuff like that. Here is the very narrow — long but narrow — corridor that normally there is no operational type of maneuvers, neither side, but it's a transit. But we like to know who is going where and all that. Then obviously one the things are that they do not always use transponders or flight plans. There are no flight plans, so we need to find out who is there. That has improved a bit over the years. The equipment is newer and they have the western transponders and they use them, so it's a little bit better situation that we had a few years back, but it's not 100 percent covered with the flight plans or transponders. As you look across the entire Air Force, what's your No. 1 concern? Is it budget? Is it what you're seeing threat-wise from potential adversaries? Well, I'm not concerned about the adversary. Things are relatively stable. We have good relations in all the directions, all directions there. Defense forces in general has been resourced relatively well. The readiness, of course, requires some money. And of course the Army has had a bigger transition the last few years out of the services, from a training organization into a readiness organization. There's of course a need for more money, for operating money also. And the government has been giving quite good money in the last few years. Now the future is not that bright. I mean, there's some dark clouds there. I'm concerned. Of course, the main procurement program, like the HX [fighter replacement program], seems to be well on track, and I'm very happy about that, and that is their main priority, of course, to keep that in schedule and in budget for the procurement side of the house. People have been — I don't know if “stressed” is the right word — but they have been under pressure for the readiness, and we've also gotten more vacant jobs. We are recruiting people, people on the field and into the practical work— so the aircraft maintenance, the surveillance tasks. It's very important that the recruitment works. Aside from HX, are there other modernization efforts that you're trying to keep on track? Well, we are, before the HX selection, before the HX comes in. Right now we are working on our C4I system. But we have had quite a lot of new pieces there and they are IOC [initial operational capability], becoming FOC [full operational capability]. Then whatever solution or whatever HX candidate is chosen, there is a requirement to be able to process and handle all that [information]. So we are working that before so when selection is done and it's actually coming in, the infrastructure is prepared for that. Obviously we need to then fine-tune it, depending on the selection, at the end of the day, but right now we are working on the basic infrastructure. What has Finland already fielded? What is coming up that is still in the planning stages or in the competitive stages? For the C4 side of house? Well, OK, we've got our sensors, relative new sensors for the surveillance sensors. And our networks and the infrastructure and the servers, kind of like the infrastructure there, both the networks and for the servers. They are relatively new. So it's there, and we are getting that into use as we speak or in the near future. Then it's all about the processes and methods and how to handle the data and how to use the data. So that's something that people in organizations need to learn. Not the hardware, but the people need to learn, so that's something that we are working on. Then, when we get the HX here and we know what it is, then we do the necessary adjustments. And it's obviously platform-specific and [dependent on] the requirements there. In all cases, we need to be able to be better in joint warfare inside Finland with data services and of course maintain the international interoperability portion, whether it's about tactical data links or whether it's other things. Did you discuss interoperability with the U.S. Air Force with Gen. Goldfein? Well, yeah, sure. Technology is one thing. You are interoperable and you can use the data and all that. But the processes [of] how you do it is one thing, but then there's this policy side of the house, that if you don't have the policy or to actually be there — interoperable all the time — then you just need to be prepared for that. We are an independent nation. We are not a NATO member, and we are not doing common planning. We are operating as neighbors here. Our AOR [area of responsibility] and the EUCOM [U.S. European Command] AOR and NATO AOR, they are all overlapping or next to each other. Coordination and deconfliction [are] some things that we need to be ready to do. The policy is important and the SOPs [standard operating procedures] and all that. The U.S. is interested in rapidly generating air power in times of crisis. How can the U.S. better defend its bases or set up new expeditionary air bases if needed? From what I understand, that's something that Finland has the capability to do. Did that come up in conversation, and do you think that there are things that the U.S. can learn from Finland in that area? In Finland, we have our main base. But yes, we can deploy and we can swarm, distribute our assets, and then have them under the command and control, and make centralized effects out of those distributed things. So yeah, that was talked about. Of course, it requires the ability to move and begin to move [your resources from the base]. It requires a good situational awareness and plans [for] how to do it, and then the timely execution of that. We've talked about the general concept, and yes, it was mentioned by Gen. Goldfein that they are looking for a more expeditionary mindset, that huge massive bases that you can generate the air power may not be the thing that you want to stick. Finland is not that small [of an] area. There are smaller nations than us, but still in the global or the U.S. scale, it's still a small area. The thing is to look for the agility and mobility and know what's happening and do the right things from there, either move or disperse. Is that a capability in which Finland continues to invest? Yeah, it's part of the HX program. So now the question is how much. It's good for that fight that you distribute, but the main operation is get out there and do the job, then come back and you can go out again. That is the important thing — that you get the effect in the air, what you're doing from the air or in the air. Then it's nice for the survivability part and all that to be distributed. That's what we are still looking [at]. But then, to what extent? That is to be determined. We will find it out when the HX goes forward. On HX, I understand Finland is looking for some industrial incentives. Has it become clear yet what each company might be willing to offer? We are in the middle of the process. I don't know whether the offers are final. We have the ideas that we are discussing. There is a requirement that we need to be able to do certain stuff in Finland, with the Finnish resources and [people with] Finnish passports. That is a requirement [that] is still there. How do you think Finland will have to balance the cost of this project with the capability it wants? That equation needs to be solved, but we have two years of time to solve it. We have the money — €7 billion to €10 billion. And we need to maximize the capability on that money. Are you making additional investments in intelligence, surveillance and reconnaissance capabilities? There is a desire to have the proper amount of ISR. Obviously the HX is going bring something into it, and we also have a recent area there that we are investigating. Probably when there's better visibility, when we are actually selecting and getting through HX, then we [will] know where the gaps are, and then we are going to fill them in [with] other programs. https://www.defensenews.com/2019/08/09/finlands-air-force-chief-tackles-recruiting-challenges-and-its-quest-for-a-future-fighter/

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  October 26, 2023 | International, Aerospace, C4ISR

  Northrop reports strong growth, expects ‘zero profit’ on B-21 contract

  Northrop Grumman officials cautioned that the B-21 Raider won't be profitable at first, though they see it driving future growth.