High Hopes : O.C. Firms Scramble for Share of U.S.-Japanese FSX Fighter Project as Defense Business Slows

When the debate was raging in Congress last month over the proposed U.S.-Japan FSX fighter plane project, Orange County aerospace executive Jeff Amacker was following the proceedings with more than casual interest.

Amacker’s firm, Leach Corp., is a subcontractor to General Dynamics Corp. on the F-16 fighter, the plane on which the FSX fighter will be patterned. And Buena Park-based Leach, which sells $25,000 worth of power system components for each F-16, badly needs the new business that the FSX might bring.

Amacker, Leach’s president and chief executive, said he was encouraged when the Senate bucked vigorous opposition and voted last month to approve the $8-billion deal, clearing the way for the joint development project to go forward.

“If they (the Japanese) keep the F-16 components in the plane,” Amacker said, “then we think we have an excellent chance of getting some business.”

The FSX will be designed jointly by General Dynamics Corp., prime contractor on the F-16, and Mitsubishi Heavy Industries Ltd. Under the agreement worked out by the Bush Administration, the United States will transfer designs for the F-16 to Mitsubishi, Japan’s prime contractor.

The Senate adopted restrictions in the FSX deal that will prevent the United States from providing Japan with technology for the new engine of the plane. It also required that U.S. companies be awarded at least 40% of contracts for production of the Japanese fighter plane.

Opponents of the FSX deal have argued that the agreement would amount to a “giveaway” of advanced U.S. technology to the Japanese. They said the Japanese might build on that technology and develop a civilian aircraft industry that could threaten McDonnell Douglas, Boeing and other U.S. aerospace companies.

Amacker said he does not agree with that view.

“The FSX would be a significant upper for my company,” Amacker said. “The aerospace industry is in a declining period of business, and we need some additional places to put our hardware.”

With its military business slumping from lower Pentagon spending, Leach’s bookings of new orders have been declining for more than three years, Amacker said.

Amacker said he disagrees with some other aerospace executives who believe that the Japanese will benefit by gaining access to sophisticated technology in the FSX deal. The F-16 “is an old-technology fighter,” Amacker said, adding that the agreement also provides the United States with access to any new technology that Japan develops under the project.

About a year and a half ago, Leach signed an agreement with a Japanese company to market its automated power systems to the Japanese for use in commercial and military aircraft. The systems distribute power generated by the engine throughout the aircraft. The systems allow a pilot to be able to control the flow of power in the plane using a computer terminal in the cockpit.

“We did not design this power system just for the FSX,” Amacker said. “We actually designed it for all future fighter aircraft based on Air Force specifications. This business with the FSX would be a good add-on.”

Leach’s ability to get a piece of the FSX business will depend largely on how successfully it is able to market the power supply equipment to the Japanese, Amacker said.

Another Orange County company also hopes to get a piece of the action on the FSX plane.

Parker Bertea Aerospace produces various fuel systems components for the F-16, which potentially could be used on the FSX.

“If they keep F-16 components on the plane, then we have an excellent chance” of gaining some business on the FSX project, said Jim Lowes, group vice president for the Irvine aerospace firm, a unit of Cleveland-based Parker Hannifin Corp.

Lowes said the FSX is unlikely to generate a significant amount of business for the company because Parker Bertea’s role in F-16 production is not that large.

He said the aerospace company is pleased that the Japanese chose a U.S.-built plane on which to base the FSX. But he said company executives have “mixed feelings about moving some of the technology over to Japan.”