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U.S. arms makers look overseas as domestic demand shrinks

As the U.S. government eyes cuts in military purchases, defense contractors' sales overseas are likely to hit a record this year. The boom is drawing fire from arms-control advocates, who worry that weapons could end up in the wrong hands.

June 15, 2011|By W.J. Hennigan, Los Angeles Times

Outgoing Defense Secretary Robert M. Gates said last week that allies in the North Atlantic Treaty Organization need to spend more on defense, including weaponry. "This is no longer a hypothetical worry," he said. "We are there today. And it is unacceptable."

Close U.S. allies get money to help pay for the military equipment they buy. For example, Israel received an estimated $2.78 billion in U.S. aid to purchase arms. Other countries, such as Iran and China, cannot buy U.S. military hardware. Pakistan, India and Indonesia were once on that blacklist but have since been taken off. Before that, the countries purchased more arms from Russia and other European countries.

Although U.S. military technology is widely viewed as cream of the crop, it does not always win lucrative contracts overseas. In April, India announced its short list of bidders for about $10 billion in fighter jets, which bypassed American firms in favor of European ones.

France makes sought-after fighter jets. Britain is a leading tank builder, and Russia's airplanes, cargo carriers, missiles and bombs have long been tough competition worldwide.

At next week's Paris Air Show, one of the largest aerospace showcases, arms makers worldwide will compete to win some of the biggest foreign military deals.

The Obama administration has embarked on an initiative to reform export control that will roll back many of the restrictions on the way weapons are sold to foreign countries. Northrop, which specializes in systems such as drones and cyber security, is supporting the change, saying it will help U.S. companies win contracts.

"We have been so focused on protecting our technological edge that we have actually done severe and unnecessary damage to our defense industrial base," Northrop Chief Executive Wesley G. Bush said at a recent conference in London.

"To the credit of President Obama's administration," he said, "the U.S. has finally started serious attempts to reform the laws and regulations governing our export control."

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