America's hottest export: Weapons - Full version
http://money.cnn.com/2011/02/10/news/international/america_exports_weapons_full.fortune/index.htm"February 24, 2011: 3:02 PM ET
FORTUNE -- This time last year, Boeing's F-15 production line, which is housed in a beige, dreary building on the outskirts of Lambert-St. Louis International Airport, was on the verge of shutting down. The F-15 is an old jet, first designed in the 1970s to outmaneuver Soviet MiGs. It has long been surpassed by more advanced rivals, and the U.S. military hasn't bought a new one since 2001. When production slowed to a trickle a few years ago, a pair of orders from Korea and Singapore kept the line alive, barely, and it has been churning out about one F-15 a month since then. Local politicians fretted that Boeing would have to close the production line, eliminating hundreds of jobs and delivering a blow to the struggling regional economy.
Then, last summer, rumors surfaced about a deal -- a big one. The workers at the plant followed the news online, where defense publications reported on the details of the sale. The would-be buyer, they learned, was Saudi Arabia, and the proposed order was massive -- 84 planes, as well as upgrades to older jets. In October the Department of Defense, which administers sales to foreign countries, finally announced an arms package worth some $60 billion, including 70 Apache attack helicopters, also made by Boeing (BA, Fortune 500), and the fleet of F-15s.
It was the biggest overseas arms sale in recent memory, and it extended the life of the production line through 2018. The F-15 may live even longer -- a Boeing executive says there are two other overseas buyers waiting in the wings. Dale Lauer, a 52-year-old flight mechanic, smiled slightly when I asked him what he thought about the news. "People thought this program was dead a long time ago."
Far from it. Thanks to a surge in overseas demand, the F-15 and other aging U.S. weapons systems are hotter than they've been in years.
The Department of Defense last year told Congress of plans to sell up to $103 billion in weapons to overseas buyers, a staggering rise from an average of $13 billion a year between 1995 and 2005, according to Deutsche Bank analyst Myles Walton. Signed agreements have tripled since 2000..."