FORT WORTH -- Inside a hangar at Alliance Airport, two F-16s await a major overhaul.
The fighter jets, which arrived from South Korea last month, will be the first to be worked over by engineers at BAE Systems, a British company that won a $1.3 billion contract to install new avionics and other systems on that country's fleet of about 130 F-16s.
To handle the work, BAE has set up shop at Alliance in space formerly occupied by Bell Helicopter. It has hired 175 workers, plans to expand its workforce to 300 by the end of the year and broke ground on a 40,000-square-foot expansion that will add a systems integration lab.
The operation represents another chapter in the long life of the legendary fighter jet that's celebrating the 40th anniversary of its first flight -- and a new competitor for its maker, Lockheed Martin Aeronautics in west Fort Worth.
More than 4,500 F-16s have been produced by Lockheed and its predecessor in Fort Worth, General Dynamics, with about half going to foreign nations. By some estimates, more than 1,000 of the 3,000-plus F-16s still in operation could become candidates for upgraded electronic systems in an era when defense funds to buy new jets are tight.
With Lockheed Martin focused on meeting development targets on its next-generation F-35 fighter jet program, which has been plagued by technical delays and higher costs, BAE believes it can pick up business by focusing on F-16 upgrades, said John Bean, a former Lockheed executive who is now vice president and general manager of global fighter programs for BAE Systems. (It also has about 200 employees in west Fort Worth working with Lockheed on electronic warfare and other systems for the F-35.)
"Customers were clamoring for competition," Bean said.
At Alliance, BAE engineers will write software and integrate the avionics and other systems to provide all new controls for the F-16s. New systems will include central mission computers, radar, communication, sensors, navigation and weapons targeting. The cockpits will receive high-definition displays and a new helmet system that displays information for the pilot on the visor, Bean said.
The equipment will first be installed in the two planes at Alliance, with ground testing planned for next year and flight testing for 2016. Once the systems have been developed, the upgrades will be installed on the rest of the fleet in South Korea.
While the F-35 was designed as a successor to the F-16, many nations are reassessing how many F-35s they want to buy because of the higher costs. As one alternative, some are upgrading their F-16s and flying them longer.
Greece, which has 140 F-16s, is expected to open up bidding for an upgrade contract this year, Bean said. Other countries considering upgrades include Singapore, Turkey, Egypt and Bahrain.
"As many as 1,000 to 1,200 F-16s will need to fly for 25 years or more," he said.
Lockheed has handled F-16 upgrades for years, including midlife enhancements for the Air Force, and believes that its knowledge of the aircraft is a major advantage over BAE or any other rival, said George Standridge, vice president of business development for Lockheed Martin Aeronautics. Two years ago, it won a contract with Taiwan to upgrade the electronics on 145 F-16s for $1.85 billion.
"We are the design and development authority on this airplane," Standridge said, emphasizing that it has unique know-how to take the plane to its maximum capability.
Despite budget concerns around the globe, Lockheed doesn't believe that F-16 upgrades will eat into potential sales of its F-35, which comes with stealth capabilities and other features that even upgraded F-16s won't have.
"There is nothing you can do to a fourth-generation airplane that will take it to the capabilities of a next-generation plane like the F-22 or the F-35," Standridge said. "Even as the F-35 enters into service, we will have F-16s out there in numbers for a long period of time."
Indeed, many nations with F-16s have already placed orders for F-35s, which sell for about $100 million each. Nine countries, including South Korea, have ordered about 700 F-35s.
And Lockheed could drum up more sales next month, when the plane is scheduled to fly overseas for the first time at the Farnborough air show in England. It expects the fighter's cost to drop as production increases.
The Fighting Falcon is no stranger to Bean, who spent 29 years at Lockheed Martin Aeronautics, including a stint as vice president and general manager of F-16 programs. He went to Bell Helicopter in 2004, where he was executive vice president and chief operating officer before leaving in 2009.
In 2012, after BAE won the contract with South Korea, officials said they planned to handle design and testing for the upgrades in San Antonio and at two other sites. But after Bean was hired in February 2013, BAE decided to centralize the work in Fort Worth "to improve productivity and help reduce program costs," spokesman Neil Frantz said.
The company operates inside half the 200,000-square-foot facility near the control tower at Alliance Airport. It will take over the rest of the building next spring when Bell moves to a flight-training academy being built at its headquarters as part of a $235 million modernization program at its east Fort Worth campus.
For now, BAE Systems is focused solely on upgrades to the F-16. With more than two dozen countries flying the fighter jet, Bean hopes to secure enough work for the employees being hired in Fort Worth to sustain a long-term business.
"We don't want to just upgrade the aircraft," Bean said. "We want to be a partner that goes to the end of life on an aircraft."
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