VZCZCXYZ0026
OO RUEHWEB

DE RUEHAK #6159/01 3031355
ZNR UUUUU ZZH
O 301355Z OCT 06
FM AMEMBASSY ANKARA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9680
INFO RUEKJCS/SECDEF WASHDC//USDP:PDUSDP/ISA:EUR/ISA:NESA/DSCA//
RUEKJCS/JOINT STAFF WASHDC//J-3/J-5// IMMEDIATE

UNCLAS ANKARA 006159 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV MARR TU
SUBJECT: TURKEY: WORKSHARE AND TECH TRANSFER REMAIN DEFENSE 
PROCUREMENT PRIORITIES 
 
REF: ANKARA 6080 
 
¶1. (SBU) SUMMARY: Defense Minister Gonul will raise two 
issues during his October 30 Pentagon meetings and also in 
Texas with Lockheed Martin on October 31: maximizing 
workshare and technology transfer on the Joint Strike Fighter 
(JSF) program; and, negotiating workshare or offset work as 
part of the purchase package for 30 new F-16s, he told the 
Ambassador on October 26.  Gonul noted Turkey's preference 
for used F-16s over new aircraft to fill the gap while its 
current fleet is being upgraded and reiterated a request that 
the USG consider such a sale to Turkey.  Ambassador dismissed 
the used F-16 option as unlikely and urged the GOT to resolve 
its workshare requirements directly with Lockheed Martin. 
Undersecretary for Defense Industries Murad Bayar said Gonul 
would raise Turkey's continued concerns with the licensing 
process and would be prepared to discuss US defense industry 
concerns about Terms and Conditions contained in the standard 
procurement contract.  END SUMMARY. 
 
TOP PRIORITY IS JSF 
------------------- 
 
¶2.  (SBU) In a meeting to discuss his October 30-31 trip to 
the United States, Minister of National Defense (MND) Vecdi 
Gonul advised the Ambassador that his top priority is to 
resolve Turkey's outstanding issues on the JSF (F-35) program 
before signing the multilateral Production, Sustainment and 
Follow-On Development (PSFD) MOU.  Gonul said Turkey takes 
issue with several points in the bilateral supplement to the 
PSFD MOU.  Technology transfer is critical, Gonul stated. 
Turkey "wants a success, not just a toy that it doesn't know 
what's inside."  Turkey would also like to incorporate a 
domestically-developed crypto system that was previously 
integrated into Turkey's F-16s, helos and other equipment. 
Additionally, Turkish law requires that at least 50% of the 
procurement price be contributed in the form of local 
production or offset work.  Gonul expressed concern over PSFD 
wording that suggests that Turkey stands to lose 100% of its 
JSF workshare in the event that total production falls below 
a certain level and said that Turkey's loss should be 
proportionate to the overall production loss, not greater. 
 
CRITICAL GAP IN F-16 FLEET 
-------------------------- 
 
¶3. (SBU) The modernization of Turkey's F-16 fleet has left it 
with a gap that it hopes to fill with new or, preferably, 
used F-16s, Gonul stated.  Referring to Turkey's past request 
for used F-16s, he expressed dismay that the US had sold used 
aircraft to Pakistan and Italy but not to Turkey, and 
reiterated the GOT's interest in such a purchase.  Ambassador 
underscored that we had thoroughly explored that option but 
that no used F-16s were available.  He expressed doubt that 
the circumstances had changed.  Barring that possibility, 
Gonul said, Turkey is willing to buy 30 new F-16 Block 50 
aircraft.  Given Turkey's past production of 280 F-16s at 
Tusas Aerospace Industries (TAI), however, the GOT would have 
difficulty justifying an off-the-shelf purchase of US 
aircraft to the Turkish public unless it could demonstrate 
that it was not cost-effective to produce all or portions of 
such a small number of aircraft in Turkey. 
 
¶4. (SBU) Bayer described a lab in Eskisehir that produced 
mission-support software for the 280 F-16s produced by TAI. 
The upgraded F-16s will use different software that will 
render obsolete the Eskisehir plant capabilities.  Turkey 
would like to keep the Eskisehir software facility 
competitive by producing software for the upgraded F-16s.  To 
do so, Turkey would need access to the new F-16 technology. 
 
¶5. (SBU) Ambassador pointed out that the Turkish Air Force 
Command (TAFC) had requested fast delivery of F-16s at the 
lowest price; local production would add to both the 
production schedule and the cost.  Gonul acknowledged that 
Turkey could not make an balanced decision absent detail on 
the added costs and time and said that if the delay or price 
increase is so extensive as to severely limit the utility of 
the buy, Turkey would reconsider.  He dismissed the TAFC 
requirement, stating that the military focuses on its 
equipment needs without considering the development of the 
defense industry, and suggested that Turkey would be willing 
to live with a six-month delay in order to secure local 
production.  Bayar responded that TAI claimed it would be 
able to produce the planes on time and within budget.  If 
local production of the new F-16s is not possible, Gonul 
suggested, perhaps Turkey could do F-16 upgrade work for 
aircraft destined for Pakistan or other countries.  He also 
raised the option of an offset package in lieu of workshare. 
Ambassador welcomed Gonul's October 31 visit to Lockheed 
Martin in Texas and urged the delegation to work out Turkey's 
requirements directly with the company. 
 
US LICENSING PROCESS A CONTINUING FRUSTRATION 
--------------------------------------------- 
 
¶6. (SBU) USG licensing requirements will also be on the 
agenda for the Pentagon meetings, said Bayar.  SSM 
appreciated the USG efforts to approve several revised 
marketing licenses for Turkey's second purchase of Sikorsky 
Seahawks, but  others remained outstanding.  Bayar said he 
plans to address the continued difficulties facing Turkey in 
securing appropriate marketing licenses on a timely basis. 
Gonul offered the opportunity to discuss the continuing US 
defense industry concerns about the Terms and Conditions 
contained in SSM's standard contract. 
 
¶7. (SBU) Gonul said he does not intend to raise specific 
issues related to Iraq, the PKK, Afghanistan, NATO or any 
other topic, but would be interested in the USG perspective 
on the future of Iraq in light of the ongoing Baker 
initiative and the recent Holbrooke letter to the President. 
 
Visit Ankara's Classified Web Site at 
http://www.state.sgov.gov/p/eur/ankara/ 
 
WILSON