F-35 Cancelled, then what ?

[MSOCS]

An oft-missed benefit of being a partner is the industrial work share that comes with it. This reduces the cost of the Program to countries. For instance, the U.K. Will get around £3 back for every £1 put in, provided the total numbers forecast are eventually ordered - clearly that's not guaranteed but there's a way to go yet.

If you no longer want to be a partner, why should you retain the work share? Far better to split that amongst the committed nations and concomitantly reduce the cost of the Program to them.

[ORAC]

It seems the Danish order will only be a firm order for 21 aircraft, the remaining 6 being an option - depending on what the price and running costs actually turn out to be.......

Agreement for the Acquisition of New Combat Aircraft


(EDITOR’S NOTE:

So, in the final analysis, Denmark does not know what price it will pay for its F-35As, and if the price increases it will buy fewer of them. This is the reason why, instead of the publicized figure of 27, the parties have in fact committed to buy only 21, with the remaining six to be bought only if there is enough money to pay for them.

This, by the way, would bring the purchase in line with the intentions of the Konservative party, which voted against the purchase because it wants to limit the number to 21. Given that this is barely enough to equip a single operational squadron, if it hard to understand why, given the cost, Denmark does not simply do away with fast jets altogether.

All the more so that Danish media, including the Berlingske daily newspaper, puts the lifetime costs of the F-35 fleet at well over 50 billion krone, or about $7.6 billion, while Henrik Dam Christensen, defense speaker for the opposition Social Democrats, puts that figure at 55 billion kroner.

In any case, given the F-35’s history of cost inflation, late delivery and mandatory upgrades, it is more than likely that, like Norway and the Netherlands, it will end up with far fewer aircraft that it initially wanted – in this case no more than 21.

[glad rag]

Originally Posted by MSOCS

An oft-missed benefit of being a partner is the industrial work share that comes with it. This reduces the cost of the Program to countries. For instance, the U.K. Will get around £3 back for every £1 put in, provided the total numbers forecast are eventually ordered - clearly that's not guaranteed but there's a way to go yet.

If you no longer want to be a partner, why should you retain the work share? Far better to split that amongst the committed nations and concomitantly reduce the cost of the Program to them.

So you support the blackmailing of a NATO ally by LM then?

[Turbine D]

I Told You So

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together. President Dwight D. Eisenhower - January 17, 1961

So MSOCS, who is running the US DoD these days, would it be LM? It seems to me the message to Canada on the F-35 should come from the US Government, not the industrial supplier. Keep in mind, everything about that aircraft developed by means of government funded R&D programs is owned by the US government, not LM. IMHO, the US government sets policies like this, not LM, unless the US DoD have ceded their role and responsibility to LM. Then I refer you back to Eisenhower's warning.

[MSOCS]

Turbine, FWIW I agree it should come from the US govt, not LM. Doesn't change the rationale or validity of arguments as to why the contracts should be re-competed, without Canada, should that country decide to buy a 4th Gen jet off the shelf that will last a few more years than the venerable CF-18.

Glad Rag - no, but you can't secure industrial work share on the basis of a purchase commitment, pull the plug on that commitment and hope nobody notices. If Canada buys SHornet, good for them. Every bit of expert study and competition they've conducted still points to F-35 as the answer. I have that on good authority from a Canadian individual involved in the studies. It's kinda like leaving the EU but hoping you can still have your current tariff-free access to the single market. So no - this stuff needs to be re-negotiated and hashed out between Governments. I think LM weren't wise to state this as it does appear like a threat / blackmail coming from the contractor and beneficiary.

[Tourist]

Originally Posted by glad rag

So you support the blackmailing of a NATO ally by LM then?

Blackmail is one way of looking at it.

Another is enforcing a contract.

You buy this many, you get this workshare.
If you no buy any, you no get workshare.

[Turbine D]

MSOCS,

Doesn't change the rationale or validity of arguments as to why the contracts should be re-competed, without Canada, should that country decide to buy a 4th Gen jet off the shelf that will last a few more years than the venerable CF-18.

Canada never has had a signed contract to buy F-35s, only an "intent" to buy. The $800M+ positioning of F-35 component manufacturing in Canada was just the typical "carrot and stick" enticement by LM. As far as contract renegotiations with other country participants should Canada back out, as I see it, that is a strictly a "LM proceed at your own company's risk" as LM seems in charge of US DoD F-35 procurement contracts. Personally, I think the whole partnering arrangement on the F-35 is like none other that have successfully happened in the past. The F-35 arrangement is putting the cart in front of the horse, typical when the supplier calls the shots of contract arrangements.

[ORAC]

It would appear many have forgotten, or are unaware, of the F-35 subcontractor work share model.

F-35 Reality Check Ten Years On, Part 2: The Jobs Mirage and Other Stories

[MSOCS]

Unlike any other. Agreed.

Now, nobody committed to buy their declared numbers at the start but they had to start somewhere, so an initial statement of purchase numbers was made by all partners, to allocate the industrial work share. You're right, there was no contract per se, just mutual trust and an agreement on numbers between the US DoD and each country's Armed Forces and lo, the work share was allocated. Canada declared 65 IIRC.

Extricating yourself from the Program doesn't give you Grandfather rights to continue to make a select group widgets and components for all F-35s for the next 40-50 years.

[ORAC]

And buying doesn't guarantee keeping production - but since since each subcontractor was chosen on lowest cost and has to absorb all costs, it is logical moving any production will lead to both delays and higher cost per aircraft as the disruption and retooling costs by the manufacturer are absorbed by the program.

Moving production would be one of those cut off your nose to spite your face moves.

[Tourist]

Originally Posted by ORAC

Moving production would be one of those cut off your nose to spite your face moves.

Not really. They would have to balance the cost of losing a buyer of a trance of aircraft against the possible cost of moving production.

The "stick" might just persuade a wavering customer to stick with the programme.

[glad rag]

But are/were Canada actually ever a "customer"? ?

[ORAC]

Canada is a program member and a prospective customer.

If Canada acquires F-18E/F/Gs as an "interim" measure pending final testing of the F-35 and software, with the stated intent of an eventual purchase, it remains a program member and prospective customer.

It would be interesting to see the legal consequences and court cases if LM proposed withdrawing contracts based on such a buy - caused by the LM slippages in F-35 delivery.

[kbrockman]

Meanwhile USMC are reintroducing some of their boneyard F18's
http://snafu-solomon.********.be/201...ng-30-f18.html

via IHS Janes

The US Marine Corps (USMC) is having to recover Boeing F/A-18C Hornet combat aircraft from the 'boneyard' at Davis-Monthan Air Force Base (AFB) in Arizona to bridge the delayed introduction into service of the Lockheed Martin F-35B Lightning II Joint Strike Fighter (JSF), a Boeing official said on 10 June.
Speaking at Boeing's Global Sustainment and Support (GS&S) site at Cecil Field in northern Florida, Bill Maxwell, senior manager F/A-18 operations, said that the USMC has contracted the company to recover 30 legacy Hornets from the 309th Aerospace Maintenance and Regeneration Group (AMARG) facility at Davis-Monthan AFB to cover a projected shortfall in numbers and capability as the service transitions over to the JSF.

[PhilipG]

Should the USN and USMC now concentrate on the C?

Having seen the article about the USMC planning to spend significant money on updating and life extending F18s from the boneyard, so that the squadrons on CVNs have something to fly, I was confused about the reference to the F35B in the press release.

As I understand it the legacy Hornets have been very heavily used and are requiring a lot of costly maintenance.

If the F35C's IOC and hence FOC is focussed on more than that for the F35B then the USN /USMC can replace their legacy F18s with F35Cs and transition to two fixed wing fast jets on a carrier sooner.

The F35B as far as I know has never been planned to regularly operate off a CVN and an F18 has never operated off an LHD.

[Just This Once...]

In the 'fair and open' world of F-35 competitive contracts has, unsurprisingly, favoured US companies that enjoy more favourable terms - particularly with USD pricing. That these contracts have been spread out to encompass almost every state in the US is fortuitous for LM. When LM claims to congressmen and governors that the F-35 will bring money to their electorate they are not fibbing. When LM claim that partner nations could also attract large contracts the truth may be something different.

[Turbine D]

When LM claim that partner nations could also attract large contracts the truth may be something different.

This is where the F-35 contracting goes amiss. In a US government led push to sell aircraft overseas, agreements are reached on product pricing and the amount (value) of offset contracts required in the buying country. The US government (DoD) tells the major suppliers what must be achieved, not the other way around. The F-16 foreign sales program was a good example of how it should work. Thanks to the current F-35 arrangement, LM is cleaning up. First cost overruns are paid for by the American tax payers and soon the same will occur for "Partner" participants with no guarantee promised work will stick if the full quantity isn't bought. What a deal for LM! Some one will write a book about it...

[sandiego89]

Originally Posted by Just This Once...

In the 'fair and open' world of F-35 competitive contracts has, unsurprisingly, favoured US companies that enjoy more favourable terms - particularly with USD pricing. That these contracts have been spread out to encompass almost every state in the US is fortuitous for LM. When LM claims to congressmen and governors that the F-35 will bring money to their electorate they are not fibbing. When LM claim that partner nations could also attract large contracts the truth may be something different.

Given the likely overall projected buy, it would be logical that US companies would get the lions share, but just as LM has done a good job at involving numerous congressional districts, they have also built an impressive list of foreign producers as well. It was quite clear early in the program if you wanted to get on board you had better do so- this was going to be a partner program from the start- and to play you had to buy into the program. LM and EVERY country involved has tied production considerations/jobs to the program as well. I am sure the good folks at Cameri and Nagoya assembling the jets, and hundreds of other places around the globe, are happy to have the jobs, and their politicians are working just as hard to bring home the bacon (except Trudeau perhaps )

[ORAC]

If you want a job creation scheme I assure you buying into a multinational aerospace programme costs at least a hundred times more per job than the workers involved will ever earn. Better to give them a salary of 50-100K each and send them on gardening leave.....

[MSOCS]

...but it isn't a job creation scheme ORAC. It's a Fighter creation scheme. Those who secured the lucrative industrial contracts to manufacture and supply bring money to the country. Ergo, the Fighter creation scheme is (for some countries at least) a money creation scheme to one's treasury.

If Canada "wants in" on that great sounding deal, they have to maintain their desire to procure their 60-odd F-35. If Canada doesn't care about that deal and wants to commit itself to a sticking plaster solution for its future combat aircraft requirement, then that's their (Liberal PM's) choice....buuuut, the extant Canadian contracts will be re-competed amongst the committed partner nations if it turns its back completely. Being Liberal, there's a certain centricity to this issue. Canada may not turn completely, but may instead keep feeding the JPO the holding response that it's still considering a buy. There was a time only a year or so ago where every partner could have hidden behind the language of non-committal but, now that jets are being built and flown by many of those same partners, that tactic no longer works.

Play stupid games, win stupid prizes.