JTull wrote:They'd be willing to transfer the production line for 1 aircraft too. Just at what cost, is the question. I can assure you that the domestic job compulsions will not allow US to "transfer" any production line even if we're the only country buying the stuff.
Lockheed is going to have to take some hard decisions as the C-130J winds down. The best way for them financially to keep it going along is to strike a Joint-venture with a private or public sector player in India for example in order to " try " (not a guarantee by any means) to reduce the price of the aircraft to spark greater interest given that they have sold a lot of them and new market capacity (by a lower cost) has to be created especially for the LM-100J. The market needs to be there, the private or public sector player needs to be willing and step up and they need to strike an agreement. This area is doable in my opinion and as good a case for being mutually beneficial (to LMA and to say a Tata) to actually come to fruition if seriously pursued.
I am not saying that this is happening or even likely to happen, but if any such JV between any companies is explored in the short to medium term then it is unlikely to be as good as or better then the case for the C-130 FACO or production in India through a 50/50 JV. Another candidate for such a partnership for LMA is Turkey.
Singha wrote:they would merely agree to a assembly line here if we ordered 150, like airbus has a line in tianjin. but rest assured all the 1000s of parts including the engine would 95% be sourced from vendors in amrika alone. it is simply not cost effective to locally produce all such parts unless its a local project where the vendors are already here and have supplied parts for the protos - like the Tejas ecosystem or Dhruv ecosystem.
thats why its important to develop domestic products from the ground up, it carries along and scales up tens of vendors who can help with later projects.
The decision to setup up shop is a financial one taken after considering a host of factors. Moving 100% the component production or even sourcing them locally has a tremendous disruptive affect on the supply chain and production yields in the short-medium term and that needs to be offset by either huge demand or a huge subsidizing efforts on part of the party interested in receiving this capability. A FACO on the other hand tackles the problem of the Assembly_Man_hours and tries to control costs there to ensure a lower price thereby partially meeting the objective. You could potentially move the entire production-process to India but the entire capability would require quite a long time which in turn requires huge investments and a steady order stream to justify all that disruption. How many years has it taken the Su-30 production to become 70% indigenous? It takes a while when local partnerships, MOU's need to be signed/created and then the supplier base given time to actual reach threshold capacity and gain competency in delivering components. Another point to keep in mind is that the suppliers are likely to charge a higher price. The US suppliers made the hard-investments decades ago and have only invested in upgrading some of their facilities. As the production trickles most of their profits have been squeezed and they have a certain degree of flexibility when it comes to working with Lockheed to adjust the price down to become more competitive. A new supplier on the other hand, would have made huge investments in cash and in overcoming the learning_curve and would want to recover that over a relatively short term given the uncertainty surrounding the future export orders. If a JV can guarantee a steady production run for 15 years, then it may be worth the effort, otherwise you would have to think about a FACO and perhaps a gradual outsourcing of component production for the low-hanging fruit. The reason why the US military projects are more competitive in pricing then the European ones even though certain skilled and engineering jobs are higher paying in the US (especially after factoring in the benefits) is because there is a subsidizing effect of the massive Pentagon order. Suppliers working on projects like the C-130/C17 know that there is going to be a steady flow of orders lasting decades.