Sold American

At Paris' elegant Hotel Ritz, the champagne flowed until the small hours. Beaming U.S. Air Force generals mingled with aircraft executives and diplomats. The party's host, General Dynamics Corp. of St. Louis, had every reason to splurge. After more than a year of knee-and-gouge competition, Belgium had decided to buy the company's F-16 fighter-interceptor instead of the French Dassault Mirage F1-M53 as a replacement for aging U.S. F-104 Starfighters. That clinched what everyone was calling "the arms deal of the century."

Belgium had been the holdout in a NATO consortium that also includes Norway, Denmark and The Netherlands. Once the Belgians decided, General Dynamics was assured of sales to the four countries of 348 planes worth $2.1 billion. That will be in addition to the 650 F-16s already ordered by the U.S. Air Force as its new generation of fighters for the 1980s. General Dynamics estimated that the 998-plane sale could create 40,000 jobs in the U.S., plus thousands more in the four NATO countries, which will share in production.

If other countries, particularly Iran, opt for the trim Mach 2-plus (1,500 m.p.h.) craft, total production could reach almost 1,500 planes worth $9.1 billion. The agreed "not-to-exceed" price of $6.09 million (v. $5.5 million for the Mirage) per basic airplane, could, if 1,500 planes are in fact sold, add $4.3 billion to the credit side of the U.S. trade balance during the next ten years. The long-range total could be even higher; such extras as spare parts and technical additions could boost the per-plane price to $7.6 million.

The French were understandably angry. Although the F-16 was clearly superior, the Mirage was a smart performer itself and had other things going for it, among them a large number of French-speaking Belgians who would be outraged at a decision to choose the F16. But not even that consideration could outweigh aggressive salesmanship by General Dynamics and the U.S. Government. In the final hours before the decision, U.S. Secretary of Defense James Schlesinger sagely offered Belgian policymakers a rationale for buying the F-16 while at the same time mollifying French-speaking voters. He gave Belgian Defense Minister Paul Vanden Boeynants assurances that the U.S. would consider buying $30 million worth of Belgian machine guns, which happen to be made in the French-speaking portion of Belgium.

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