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     Mar 28, 2012

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As drones rise, a manned fighter falls
By Phil Radford

SYDNEY - The world's biggest international defense project, the United States-designed F-35 strike-fighter aircraft, was put on probation by international partners at a formal meeting held this month in Sydney, Australia.

Responding to the latest in a series of cost increases and delivery delays, representatives from the Australia, Canada, Denmark, Italy, Netherlands, Norway, Turkey and the United Kingdom have all threatened to pull out of the project unless the Pentagon and lead private contractor Lockheed Martin can deliver the fighter plane more quickly and cheaply.

The trouble started on February 13 when the US Department of Defense's Comptroller released detailed projections of future Pentagon spending which revealed cuts in planned US purchases


of the F-35 fighter as well as related cost increases in the fiscal period spanning 2013- 17.

The 2012 price of the US Air Force version of the F-35 aircraft is almost US$197 million, three times the plane's original projected cost. By postponing the ramp up to mass production, the Pentagon in effect confirmed that the F-35 will not be available in the near-term at a cost allies are willing to pay.

Within days, the Canadian government called an unprecedented meeting of F-35 partners at its embassy in Washington to organize a collective response. The aircraft is the most expensive procurement project on the defense budget books of most project participants. Together the eight countries had committed to purchase over 700 of the fighter planes.

Delivery delays, meanwhile, mean the countries' air forces will face yawning gaps in combat capability. Canada needs new aircraft by 2016, while Australia wanted its first 14 of the fighter planes by 2014. The United Kingdom desperately needs a naval version of the F-35 for its two 60,000 ton aircraft carriers due to enter service in 2016 and 2018.

Before the Sydney meeting, Canadian Associate Defence Minister Julian Fantino underscored the allies' bottom line. "We have not as yet discounted the possibility of backing out of the program," he said, adding in case the point of the meeting was missed, "none of the partners have".

The plane's wider export prospects are also under threat. The F-35's first Asian customer, Japan, warned on February 29 that cost increases or delays might force Tokyo to cancel its contract for 42 aircraft. The multi-billion dollar deal was signed just three months previously.

More broadly, the US's ability to turn its pre-eminence in military technology into lucrative, long-term exports and diplomatic leverage is also at stake. Faced with cost increases, continued delays and technology risks, US strategic allies have started to investigate cheaper, more reliable alternatives, and there is little the cash-strapped US government can do to stop them.

Arm in arm
Back in 2001- 2, the allure of the F-35 "fifth-generation" fighter proved irresistible to many US allies. It would possess high resolution sensors and secure high-capacity data links so pilots could fight armed with an exceptional awareness of the situation around them, while "data fusion" features would make that information easy to comprehend. The plane's stealthy look would produce a tiny radar signature that increased survivability in combat situations.

Many air force chiefs, almost all of them ex-fast-jet pilots, pronounced the F-35 the best fighter of the future. Prospective customers were promised the F-35 would also be economical, with lower maintenance costs than existing aircraft.

For the US, inviting allies to collaborate on F-35 development looked like a neat way to cement its position at the apex of the global defense industry. The collaborative arrangement would help the US to defray development costs, increase export orders and ultimately make allied air forces more useful in US-led operations. It would also subtly make those air forces dependent on the US for support and upgrades because the US would retain the source code required to upgrade the software the plane needed to fly.

What hooked allies most apparently was the commercial opportunity. The Canadian government, for example, which joined the F-35 project in 2002, estimated that by 2010 its C$168 million development contribution had led to C$350 million of contracts from Lockheed Martin. This 2:1 return on investment boosted national capabilities in advanced composites and helped fund research laboratories and universities. (The US and Canadian dollars are currently at parity; all amounts here are in US dollars unless otherwise stated.)

With the US committing to purchasing 2,443 aircraft, plus 700 from the allies and perhaps another 2,000 in exports to non-partner countries, allies eyed a commercial bonanza that would simultaneously propel local technology firms into world-class players once full-scale production began.

Postponed profits
Flash forward 10 years, and the plane is still six years away from full-scale production. In its latest report, released last week, the US Government Accountability Office (GAO) identified deficiencies in the plane's fifth-generation capabilities, including the helmet-mounted display which cannot "fuse" data.

More worrying is the backlog in software coding. The F-35 needs an estimated 24 million lines of code to become operational, including 9.5 million on-board the aircraft. This is six times as much software as on the F/A-18 Hornet, and three times more than the F-22. The GAO reports that "testing of the most complex software and advanced capabilities [is] still in the future," while only "four percent of the aircraft mission system for full combat capability has been verified".

Partly as a result, the flight tests are approximately five years behind schedule. A fully integrated F-35 won't now begin testing until 2015 at the earliest, coinciding with when allies had expected deliveries to have already commenced. Moreover, a Department of Defense (DOD) presentation that accompanied the release of budget figures shows that F-35 funding for testing will now continue up to 2018, which implies full-rate aircraft production will only ramp up at the end of the decade.

But what has the allies more trapped is the cost. Last month, the US DOD's fiscal year 2013 figures showed it will purchase 19 fighters for its air force this year at a unit cost of $197 million, nearly three times higher than the 2001 projected cost of $69 million per plane. This makes the F-35 hopelessly expensive compared to the only practical alternatives available on the international market: $67 million for an F/A-18 Super Hornet; $87-90 million for a Dassault Rafale; and approximately $110-120 million for a Eurofighter Typhoon. [1]

Currently, the Pentagon projects a decline in F-35 unit costs as production ramps up and economies of scale kick in: $171 million for each fighter next year, $140 million the year after, and $121 million in 2016, when it plans to buy 70 aircraft. 

Continued 1 2  

Japan delivers Lockheed some cheer (Dec 20, '11)

Crisis closes in on China's inner circle

2. Iran not keen to walk Turkey's red carpet

3. Sri Lanka rights vote stirs nationalist passion

4. Russia rules Pipelineistan

5. Ankara ups the ante on Syria

6. Kazakh connection in French killings

7. 'Nomophobia' strikes Indian phone addicts

8. Hong Kong passes China's democracy test

9. The China-US rare earth games

10. Takahiro Miyao and William S Comanor

(24 hours to 11:59pm ET, Mar 26, 2012)



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