82. Telegram From the Department of State to the Embassy in Iran1

226031. Subject: Co-production in Iran. Ref: Tehran 8591.2

1. Following message sent to Secretary in Cairo Oct. 10:

“In order to respond to the Shah’s strong interests in co-production, the Under Secretaries Committee is now under way on the study that you directed of the long-range implications of large-scale co-production of defense articles in Iran.3 Due to the complexity of the issue, this study will not be completed until November 15. Nevertheless, several of the Shah’s co-production requests have already been acted upon. With regard to the Bell 215 utility helicopter, it was the consensus of the Interagency SAPRC Working Group that this request should be moved forward and approval was given to go ahead with its co-production.4 The decision was made not to approve co-production of the Bell 216 attack helicopter concurrent with the Bell 215, primarily because it would overtax the already shallow pool of Iran’s skilled/technical manpower. Authorization has been given to Hughes Aircraft to enter into discussions with the GOI regarding the Maverick missile in order to determine which components might be co-produced. However, final approval of any co-production proposal would be subject to interagency concurrence. The TOW and Dragon anti-tank missile co-production requests are still being reviewed by Defense prior to any interagency action. The question of a lightweight fighter is several months away, awaiting the U.S. selection between Northrup and General Dynamics fly-off competition.

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We are informed that the GOI (General Toufanian) has expressed pleasure regarding the USG approval of the Bell 215 co-production request and according to the MAAG Chief in Tehran (MG Brett) for the time being pressure is off the co-production issue. With regard to your forthcoming trip to Iran, it is the consensus here that it would be sufficient to address co-production with the Shah only in the most general way while stressing our interest in the Bell 215 developments, and informing the Shah that we are in the process of a comprehensive study of his other co-production requests which we shall be able to act on in the near future.

As a matter of special concern, we suggest that selected Congressmen and Senators should be briefed on the Iranian co-production issue. We propose that the Department undertake a series of briefings for these persons to be certain that they are kept abreast of our program as it develops. I would like your approval to initiate these briefings.”

2. Secretary replied to above that he wants to see the preliminary results of the co-production study before he leaves on his Moscow–South Asia trip.5 Also, Secretary replied that he wants no repeat no briefings on the subject until he returns.

3. Above messages sent you for information only and no repeat no action should be taken.

4. October 10 letter from Naas to Ambassador, together with above messages, will bring you up to date.6

  1. Source: National Archives, RG 59, Central Foreign Policy Files, D740291–1002. Secret; Limdis. Drafted by Naas; cleared by Edward S. Walker, Jr. (NEA), Judd L. Kessler (T), D. Farnum (PM), and David C. Gompert (S); and approved by Naas.
  2. Not found.
  3. See Document 79.
  4. See footnote 5, Document 76.
  5. Kissinger traveled to Moscow and South Asia October 23–November 1. On October 22, Maw sent Kissinger a preliminary report on the study of co-production in Iran. While noting that the program would arouse public and Congressional objections for losing U.S. jobs, relinquishing U.S. technology, and intensifying the Mideast arms race, Maw indicated that the program should proceed in order to maintain U.S. interests and influence on Iranian policy. (Library of Congress, Manuscript Division, Kissinger Papers, Box CL–153, Iran Trips, 1–3 November 1974) Maw’s memorandum is also included in a packet of briefing materials for Kissinger’s November 1–3 visit to Iran. (Ibid.)
  6. Not found.