What the hell is a private enterprise?

Chapter 515 The Hawk Wants to Settle Down

Tang Wen and Zhao Hande had many conversations when the McDonnell Douglas 11 was introduced, and then they learned a lot of inside information, and then they realized one thing:

Huang Hao's previous public criticism of McDonnell Douglas was not excessive; they are truly ruthless!
McDonnell Douglas 12 was proposed in 85 and preliminary research began in 88. At that time, McDonnell Douglas was selling this rental plan everywhere, including to Koreans, Japanese, and even the University of Tokyo.

The benefits are obvious: this leasing model places the entire set of production equipment in the leased country, which has mastered a lot of aircraft production technology and assembly processes. Isn't that like getting technology for free?
But besides that, McDonnell Douglas also had "a few" additional conditions, just to mention the requirements for China in 95:
1. A request has been made to open the civil aviation market to 10 second-tier cities in China;
2. Obtain a 15% share of fuselage manufacturing domestically (limited to non-load-bearing structures only);
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3. Domestically, a commitment must be made not to develop large military transport aircraft in exchange for McDonnell Douglas lobbying Congress to continue seeking most-favored-nation status.

And additional terms:
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1. The Asia-Pacific factory is only authorized to execute drawings and has no right to modify the design;
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2. Key tooling and fixtures are provided by McDonnell Douglas Rentals, with a monthly fee of 3.5% of the purchase price;
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3. Quality certification requires McDonnell Douglas to dispatch a specialist, with a daily fee of US$2400 per person;
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4. The depreciation cost of the factory building is borne by the country where it is located;
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5. If the project fails, McDonnell Douglas will only need to pay 20% of the remaining lease term's rent as a penalty.

This essentially transferred all the risk to McDonnell Douglas. Even if the design failed, McDonnell Douglas wouldn't have to bear too much loss, and could even continue to siphon money from its Asia-Pacific factories. So, the deal fell through last year.

In contrast, South Korea and Chuawa chose to agree, and then at the beginning of this year, when McDonnell Douglas was in the merger crisis, their factories went bankrupt, and both lost billions of dollars of their initial investment. In particular, the reason why Chuawa remained calm and did not fight in the second half of the year was largely because McDonnell Douglas had emptied its foreign exchange reserves and had no money.

This time, Levi's revisiting of the old issue follows the same line of thought, but the conditions are slightly different:
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There's no need to open the market (the joint venture factory in Geijin already implies a fully open market, not to mention the upcoming WTO accession of Tokyo University), and the share of fuselage manufacturing has expanded to almost the entirety;
If Geiger invests $40 billion, he can acquire 50% of the McDonnell Douglas 12 intellectual property rights. The First Aircraft Plant would also be a joint venture, with shared ownership of jigs and blueprints without additional fees. Furthermore, McDonnell Douglas (domestic) would be obligated to resolve technical issues free of charge.
If the project fails, compensation will be provided in accordance with the agreement, including patents or physical assets.
"Finally: there are still military requirements, but it is not that the University of Tokyo has given up developing transport aircraft, but that McDonnell Douglas has been allowed to bid for and purchase a certain number of carrier-based fighter jets."

After Levi's finished speaking, he added with a slightly apologetic tone:

"This is not McDonnell Douglas's demand, but a forced increase by Congress, and there's nothing we can do about it."

After listening to the terms and comparing them with those of the previous two years, Tang Wen found that McDonnell Douglas's sincerity in this cooperation was sufficient, but its real purpose was probably to secure the $40 billion Gaikin investment.

With a $6 billion research and development budget, investing two-thirds of the funds to acquire 50% of the intellectual property rights doesn't actually sound excessive.

However, what he cared more about was the last binding condition: what did it mean that he had to purchase carrier-based fighter jets?
"F-18? It should be an early model, I think it's worth buying. Even if the military doesn't buy it, I'll pay for it myself."

Tang Wen thought that even the early F-18 was a pretty good plane, but Levi's shook his head awkwardly:

"The F-18 is too advanced; even our allies have difficulty buying it, and McDonnell Douglas cannot sell it."

"Could that be one of the F4 ghosts?"

Tang Wen thought the Navy probably wouldn't accept this, after all, the J-10J was already on its way, and a proper third-generation fighter was no better than a modified second-generation fighter.

"However... if it's an F4S, I only want the top-of-the-line model."

"..."

Levi remained silent, only awkwardly rubbing his thigh.

Tang Wen was stunned upon seeing this:

"You guys aren't planning to sell another batch of TA4Js, are you? The Navy really doesn't need those anymore, and besides, A4s aren't worth much."

"No, no, no, McDonnell Douglas is selling a brand new, technologically advanced carrier-based fighter jet that is currently in service, definitely not an A4."

Seeing Tang Wen's confused expression, Levi finally revealed the answer:

"It's AV8B." "A Harrier?"

"Yes, that's it, and it's the latest 'Harrier II+' improved version, a new model that just rolled off the production line last year. It's definitely a good aircraft."

"..."

The Harrier, well, in Tang Wen's mind, is a... well, not a very important aircraft in terms of global military status.

Too many sacrifices were made for vertical takeoff and landing, resulting in a combat radius so short that it was comparable to that of a helicopter, and early versions couldn't even be equipped with radar.

The key point is that its technical approach was jet engine splitting, but it turned out that the Yak-141's lift fan approach was more correct, and this led to the famous "Fat Electric" F-35.

In addition to this, there is one more point:
"Wasn't this aircraft jointly developed by McDonnell Douglas and Rolls-Royce? Is it permitted by the British?"

Levi immediately replied:
"Please rest assured that, according to our agreement with Dai Ying, the sales rights in the Asia-Pacific region belong to McDonnell Douglas, and we own more than 80% of the patents, so there will absolutely be no disputes. In addition, the latest AV8B we sell is equipped with the same APG65 attack radar as the F18C, and its electronic warfare capabilities are by no means weak."

"how much is it?"

"It's very cheap. Congress demanded $5000 million per aircraft, but after President Robert's persuasive arguments, McDonnell Douglas was willing to sell it for $4500 million, just slightly higher than the price offered by its allies. Bulk purchases could see the price drop even further."

Tang Wen silently turned his head, his eyes looking elsewhere:

"I'm just a small-time businessman; I can't get involved in this kind of thing."

Are you kidding me? $4500 million for a Harrier jet?

He speculated that besides the fact that the Harrier was somewhat impractical, McDonnell Douglas might also have thought it had grasped the customer's needs:
Huashan and Taishan.

These two aircraft carriers have never faded from the public eye. Their flight decks are not very large. Perhaps McDonnell Douglas believed that the AV8B, which could take off and land vertically and was small in size, would be suitable for the use of air combat, which is why it promoted it so vigorously.

After all, isn't it perfectly reasonable for battleships to have powerful land-attack capabilities combined with AV8B missiles to cover landing forces? It's practically perfect!

As for the purpose of this combination... Tang Wen didn't believe these guys hadn't thought about it, but they were just gambling.

If we were to sell 24+8 (spare parts) aircraft, the bare aircraft price would be $14.4 billion, but with the weapons package that would almost certainly be bundled with it, it would be at least $20 billion. Add to that the exorbitant maintenance costs, and it would probably cost $25 billion to make it worthwhile.

$25 billion, which is more than 200 billion RMB, if the Navy had that kind of money, Tang Wen could just grit his teeth and buy domestically produced F-14s instead of buying AV-8Bs.

Besides, Tang Wen absolutely doesn't believe there wasn't some kind of censorship involved. Even if he's after the APG/65 radar, what he gets will definitely be the Ultimate Youth Edition, the kind that's completely different from the original.

Compared to the AV8B, it's not even as good as buying the KC10 technology license to modify the McDonnell Douglas 11 into a refueling machine, at least it would be somewhat useful.

Tang Wen's indifferent and aloof attitude gave Levi a headache. Everyone knew that he had a deep relationship with the military and might even be a mouthpiece for their interests. If he resolutely refused to accept AV8B, things would become difficult.

(End of this chapter)