BAE says U.S. 'conservative approach' hurt S.Korean upgrade deal

WASHINGTON, Nov 5 (Reuters) - The U.S. unit of Britain's BAE Systems Plc on Wednesday said it was disappointed by South Korea's decision to end the company's initial work on upgrades for 134 F-16 fighter jets, a deal that would have been worth over $1 billion over time.

Company spokesman Brian Roehrkasse said BAE had offered Seoul a cost-competitive, innovative solution, and the U.S. government - which managed the government-to-government arms sale - had validated CAE (NYSE: CAE - news) 's "strong performance" on the first phase of the program.

He said BAE remained committed to a firm, fixed-price contract for the overall scope of the work that had been agreed last year by the U.S. government and South Korea, and remained confident that it could have done the work "in an efficient and cost-effective manner."

"Unfortunately, the program was impacted by Korea's strict budget limitations and the U.S. Air Force's conservative approach to the overall program cost," Roehrkasse said. (Reporting by Andrea Shalal)