Fighter manufacturer offers deal if Canada commits to purchaseDavid Pugliese
Canwest News Service
Sunday, September 28, 2008
U.S. aerospace giant Lockheed Martin hopes to offer Canada and other nations interested in its high-tech Joint Strike Fighter a deal that would see the price of each aircraft ordered set at around $50 million US in return for countries committing to the purchase by a certain time.
There has been some concern among nations, including Canada, about the final price of the JSF. Australia has estimated the price tag for the aircraft will be $70 million US per plane when it takes delivery of its aircraft in 2013, according to media reports.
Other nations have considered delaying their purchases since the cost of the planes is expected to be higher at the beginning of the program.
But Lockheed Martin hopes to have a fixed price for the aircraft ready for various countries to consider by next year, said Tom Burbage, Lockheed's general manager for JSF program integration.
Canadian defence officials acknowledge they have taken part in meetings where the increasing cost of the JSF has been discussed. But they say they don't have an estimated JSF price tag for Canada since the government has yet to officially commit to buying the planes and the cost would depend on the number of aircraft purchased.
Canada has already invested $150 million US in JSF. The government has also decided to take part in the next phase of the aircraft's development, agreeing to invest around $500 million US over the next 45 years to pay for the specialized equipment for JSF production.
Burbage said Lockheed is gathering information from its suppliers to come up with a fixed price. A standard price that has been used previously is around $50 million US per plane, he added.
"We're certainly hoping that the pricing we get back from our suppliers will either ratify or improve that number," he said.
The proposal would see countries putting in their orders for a five-year run of aircraft before a specific date in return for a firm fixed price.
Canada expects to make its decision in 2011 on whether to buy the JSF or another fighter jet.
Norway, which is also considering the purchase of other fighter aircraft, has requested a binding price for the JSF. Media reports note that it was given a cost of $58.7 million.
Other aerospace firms are trying to entice countries to instead order their aircraft. In August, Boeing offered Denmark the Super Hornet, an advanced version of the F-18.
There has also been some talk in Canadian defence circles about whether the air force can afford the JSF since it is also in the process of purchasing new C-130J transport planes and Chinook helicopters. In the past the Defence Department has projected the total cost of replacing its CF-18 fighter jets at around $10 billion but that figure was based on 80 aircraft.
The Harper government has announced that its long-term defence plan would see the purchase of 65 aircraft to replace the CF-18s, although it has not specified the JSF. The CF-18 fighter aircraft fleet is expected to be phased out between 2017 and 2020.
Canadian defence officials have declined several times to discuss the JSF program. However, in an e-mail issued several months ago, the department acknowledged there have been some increased costs in the JSF program but it remains unclear what impact those might have.
"The Department is closely monitoring the cost of the Joint Strike Fighter program; however, at this point the figures are still being examined," the e-mail noted. "The partner countries should have a better appreciation of the total cost increase and the impact of any increase at a later date."
"Unit aircraft costs will be dependent on final order quantities and schedules," the department e-mail added.
Government officials have promoted the benefits of the JSF program for Canada's aerospace industry. They say Canadian firms have been awarded around 150 JSF contracts so far. Canadian industrial opportunities are expected to total more than $5 billion US over the life of the JSF program. That total could increase if other nations decide to buy the fighter.
But Martin Shadwick, a strategic studies professor at York University, said that he expects Canada's purchase of JSF to proceed.
"Politically and industrially we've thrown our lot in with the JSF," he said. "It would be difficult to go elsewhere now. The question is how many, when and what model."
Ottawa Citizen
© Ottawa Citizen 2008
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http://www.canada.com/topics/news/national/story.html?id=46f98e51-019a-45c0-8652-34b609d83f78
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