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Exclusive Lockheed says U.S. may take fresh look at its India F 16 plan


U.S. defense firm Lockheed Martin (LMT. N) wants to push ahead with plans to move production of its F-16 combat jets to India, but understands President Donald Trump's administration may want to take a "fresh look" at the proposal. With no more orders for the F-16 from the Pentagon, Lockheed plans to use its Fort Worth, Texas plant instead to produce the fifth generation F-35 Joint Strike Fighter that the United States Air Force is transitioning to. Lockheed would switch F-16 production to India, as long as the Indian government agrees to order hundreds of the planes that its air force desperately needs. Trump has criticized U.S. companies that have moved manufacturing overseas and which then sell their products back to the U.S. In his first few weeks in office, he has pushed companies, from automakers to pharmaceutical firms, to produce more in the United States. In Lockheed's case, however, the plan is to build the F-16 to equip the Indian Air Force, and not sell them back into the United States. Lockheed said it has been talking to Trump's transition and governance teams as well as the U.S. Congress for several months on its plans, including the proposed sale of F-16 planes to India, a spokesman told Reuters in Washington."We've briefed the Administration on the current proposal, which was supported by the Obama Administration as part of a broader cooperative dialogue with the Government of India," the spokesman said."We understand that the Trump Administration will want to take a fresh look at some of these programs, and we stand prepared to support that effort to ensure that any deal of this importance is properly aligned with U.S. policy priorities."

India is expected to spend $250 billion on defense modernization over the next decade, analysts say, and there is concern that a veto on making the F-16 in India would not only hit Lockheed, but also threaten other military contracts to come up in India for Boeing (BA. N), Northrop (NOC. N) and Raytheon (RTN. N). The White House did not respond to requests for comment on the plan to build the plane in India. NO THREAT TO U.S. JOBS Lockheed has said that moving F-16 assembly to India would create 200 engineering jobs in the United States to help support the production line in India.

It has also said that about 800 workers in the United States making the non-Lockheed parts for the F-16 would keep their jobs if construction shifts to India."We are offering to make the F-16 Block-70 aircraft with a local partner in India. This is an offer exclusive to India," Randall L. Howard, head of F-16 business development, told Reuters ahead of India's biggest air show beginning in Bengaluru next week. In India, the F-16 is up against SAAB's (SAABb. ST) Gripen combat aircraft, which the Swedish firm has also offered to make locally, as Prime Minister Narendra Modi drives a Make-in-India campaign to build a domestic aerospace industry and reduce costly imports. The Indian government is expected to decide this year on which company will build a single-engine fighter plane, in collaboration with a local partner. A defense official said the process was at a very early stage.

The Indian air force alone needs 200-250 fighters over the next 10 years, its former chief Arup Raha said before he left office in December. Defence ties between India and the United States have grown rapidly, with U.S. arms sales of more than $4 billion in 2012-15, mostly under government-to-government foreign military sales, upstaging long-term supplier Russia and even Israel. Lockheed's executive director for international business development, Abhay Paranjape, said his team has met with representatives from 40 defense and aviation firms in India to help build the ancillary network for the aircraft assembly program."We want to be prepared, that's why we started the ground work," he said, adding Lockheed has also scouted possible factory sites in India. Lockheed has a joint venture with India's Tata Advanced Systems Ltd to make airframe components for the C-130J Super Hercules transport plane and the S-92 helicopter."The capability for building components exists here, it's been proven with the C-130s. The challenge now is to pick the right partners," Paranjape said.

Wall Street rises to records as Trump ignites tax cut hopes


Wall Street's three main indexes hit record highs on Thursday after President Donald Trump said he would make a major tax announcement in a few weeks."Lowering the overall tax burden on American business is big league," Trump said during a White House meeting with airline industry executives. U.S. stocks have rallied since Trump's Nov. 8 election amid expectations he will not only usher in lower corporate taxes, but also reduced regulations and increased infrastructure spending. The rally had stagnated in recent days as investors seek details about Trump's economic policy agenda. Financials . SPSY, which have soared since the election, were the best-performing group, up 1.3 percent after three sessions of declines, while energy shares . SPNY gained 0.9 percent. Those sectors stand to benefit should lower taxes spur economic activity as interest rates and the demand for energy rise, said Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland. “Given the groups that responded and the enthusiasms within the market, it seems to be the tax comments that lit off the rally today," said Bruce McCain, chief investment strategist at Key Private Bank, in Cleveland. But, McCain said, “when you get to these levels of market sentiment, usually the returns are much more modest and you’re much more subject to a pullback."

The Dow Jones Industrial Average . DJI rose 134.14 points, or 0.67 percent, to 20,188.48, the S&P 500 . SPX gained 14.72 points, or 0.64 percent, to 2,309.39 and the Nasdaq Composite . IXIC added 37.58 points, or 0.66 percent, to 5,720.03. All three indexes hit new intraday all-time highs. The utilities sector . SPLRCU, which is considered a defensive bet, fell 0.9 percent, the worst-performing group.

The focus on Washington comes with U.S. companies in the midst of their corporate reporting season. With about 70 percent of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.5 percent, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S. Shares of Viacom (VIAB. O), Kellogg (K. N) and Prudential (PRU. N) all gained after their respective quarterly results. Coca-Cola (KO. N) forecast a surprise drop in full-year profit. Its shares fell 2.4 and were the biggest drag on the Dow and the S&P.

Repubican Hensarling plans to ease Wall Street rules: memo WASHINGTON The Republican leader of the House Financial Services Committee plans to scale back banking reforms, curb the consumer finance agency and ease regulations on financial institutions and companies looking to raise capital, according to a proposal seen by Reuters on Thursday.

Coca-Cola forecasts drop in 2017 profit amid refranchising Coca-Cola Co forecast a surprise drop in full-year profit as costs related to refranchising its U.S. bottling operations are expected to be higher than previously anticipated.

Fed's Bullard says rates can remain low through 2017 ST. LOUIS U.S. interest rates can likely remain low through at least 2017, with no clear sense yet of whether the Trump administration's policies will spark higher inflation or growth, St. Louis Federal Reserve Bank President James Bullard said on Thursday.