ATHENS – After Greece awarded a $279.7 million contract to US firm Lockheed Martin to upgrade aging F-16 jets, the Greek company due to take part could undercut the program because of management problems and a lack of staff.
The troubles at the Hellenic Aerospace Industry (HAB) are bad enough that it's not ready to participate unless they are resolved fast, with likely delays in delivering part so the Greek firm can implement its orders, said Kathimerini.
The Development Ministry, under Adonis Georgiadis, reportedly said the difficulties will be fixed by the end of the year. The deal was made to include EAB as a subcontractor.
Otherwise, Lockheed Martin will stop considering ΕΑΒ a “sole source” and launch a bid for the parts of the global F-16 production manufactured in Greece, effectively leaving it out of the co-production chain, turning instead to countries such as Bahrain, Morocco, Taiwan, Slovakia and Bulgaria, the paper said.
Besides losing face and credibility, EAB will lose out on a valuable part of the contract as 80 percent of the projects under way involve a Lockheed Martin project (F-16 and C-130-J co-productions, upgrades to P-3B naval cooperation aircraft, 84 F-16 upgrades to Vipers.)
Also at risk is the upgrade of the Hellenic Air Force’s 84 F-16s to next-generation F-16 Vipers may be in jeopardy within 2021. The contract also involves C-130 transport planes that EAB could lose out on.
Two more reasons cited for the delays were a series of employee strikes over reduced benefits, as well as the company’s inability to install a managing director, the infighting holding back participation and risking everything.
EAB wants the New Democracy government to expedite procedures to resolve pending problems by increasing the number of workers in Lockheed’s programs from 350 to more than 600.
When the contract was signed, Defense Minister Nikos Panagiotopoulos told Parliament that 84 F-16's would be upgraded to the Viper class by 2027 and came as Turkey was trying to buy US-made F-35's that would outclass Greece's F-16's.
The total cost of the upgrade program is estimated to reach $1.5 billion, Associated Press said at the time as tensions were soaring with Turkey, which is still ongoing over Turkish plans to drill for energy off Greek islands.
Greece had cut its defense budget during a near decade-long economic and austerity crisis but Turkish provocations and fears of a conflict led to the government to make a 500 percent increase to 2.5 billion euros ($2.96 billion) for 2021.