LMT Lockheed Martin Corp

Plane maker says Denmark's choice of Lockheed fighter was deeply flawed

By Robert Wall and Doug Cameron 

The Boeing Co. is challenging Denmark's decision to pick another company's aircraft in a closely watched combat jet competition highlighting the importance of export deals to U.S. fighter plane makers.

Denmark this year said it would buy the Lockheed Martin Co. F-35 Joint Strike Fighter, the Pentagon's biggest weapons program. Boeing had offered its F/A-18 Super Hornet. The Eurofighter Typhoon, built by a consortium of Airbus Group SE, BAE Systems PLC, and Leonardo-Finmeccanica SpA also lost out.

Though U.S. contractors often challenge Pentagon decisions, such action is rare overseas.

"We believe the Ministry's evaluation of the competitors was fundamentally flawed and inaccurately assessed the cost and capability of the F/A-18 Super Hornet," Debbie Rub, vice president and general manager for global strike programs at Boeing, said Thursday.

The Danish Defense Ministry in May recommended the purchase of 27 F-35 combat planes to replace the country's aging F-16 jets. Denmark has been using the F-16, also made by Lockheed Martin, in the Middle East as part of the coalition striking Islamic State targets. The decision was later endorsed by the government in June.

Denmark said it planned to take delivery of the planes between 2021 and 2026.

The decision was a setback for Boeing, which has been scrambling for export orders to keep the F/A-18 in production. U.S. orders for the plane are nearing an end. "We're taking this step because there's too much at stake for Denmark and, potentially, other countries considering the Super Hornet," Ms. Rub said.

Boeing has slowed production to just two jets a month, though the company has become more confident over the past year that it can keep the line in St. Louis open into the 2020s.

Dan Gillian, the jet's program manager, said this week Boeing was confident about securing additional orders from the U.S. Navy. It is also trying to complete an order for as many as 28 planes from Kuwait that is still awaiting final U.S. government approval after Israel raised concerns about the planned deal.

Boeing also remains hopeful it can secure a share of Canada's plan to update its fighter fleet after shelving an initial plan to acquire F-35s from Lockheed Martin Corp.

The Danish Defense Ministry published its selection criteria and said the F-35 won in all categories covering everything from military performance to industrial aspects. The document angered both losing bidders.

Boeing said it has submitted a so-called Request for Insight to the Danish Defense Ministry, requiring it to turn over documents related to the decision.

The ministry said Boeing would be given access to the information. A spokeswoman said the process had been "transparent" and led to broad political agreement. "It is natural that in a process like this only the company that wins ends up being satisfied," she said.

Airbus, which led the losing Eurofighter bid, Wednesday said it noted Boeing's move "with interest." The Toulouse, France-based plane maker said "we have similar concerns about the rigor of the competition and the quality of the technical assessment of the candidates."

Airbus said it remained in talks with the Danish government to have those concerns addressed.

Write to Robert Wall at robert.wall@wsj.com and Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

September 16, 2016 02:48 ET (06:48 GMT)

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