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The F-35 and Canadian industry: What does the 2006 MoU say?/US Upperdate–plus Dutch

Industry minister Tony Clement was interviewed (complete video at right on link) Sept. 21 on CBC News Network’s Power and Politics about the government’s decision to buy the F-35.  Almost all the discussion was about future Canadian industrial participation in the fighter’s production; nothing was said by the minister (nor interviewer Evan Solomon) about what military roles the government expects the F-35 to perform and what capabilities are required for them.  What choosing the plane is all about: for the government it’s the economy–and jobs and votes–stupid, not really the CF:

Industry Minister Tony Clement insisted on Tuesday that the government’s plan to spend $9 billion on 65 fighter jets would ensure that Canadian companies aren’t ignored from future defence contracts relating to the purchase.

During an interview Tuesday on Power & Politics with Evan Solomon, Clement spoke about a 2006 memorandum of understanding [text here, section 7.3, p. 48, seems to be the key; it does say that industries in countries actually buying the aircraft do in fact have preferential status--but subject to "best value", which rather muddies things] signed by Ottawa and a number of other countries regarding the U.S-led Joint Strike Fighter (JSF) program and the purchase of a new generation of fighter jets.

Clement said that according to the memo, the aerospace industries of countries ordering the planes get a preferred line on bidding for some of the contracting work to build components of the jet.

He referred to one section of the memo that states participants in the JSF program require the main contractor of the jets to select subcontractors from participating nations, “on a competitive, best value basis to the maximum practical extent.”

But a 2008 news release issued by then industry minister Jim Prentice [text here] appeared to suggest that Canada did not have to purchase the planes to obtain preferential treatment for its aerospace companies.

It stated that Canada’s participation in the program still “makes it eligible to benefit from the preferential condition and advantages reserved for JSF partners.”

The news release added that “this participation does not commit it to purchase the aircraft.”

Asked about the 2008 release, and the fact that it seemed to contradict Clement’s interpretation, Clement said the release made no sense to him and that he would talk to Prentice about it at the first opportunity.

Clement insisted however that the memo states that “in order to have preferential access to the bidding process, you have to be a participating country.”..

There’s much more detail about the MoU in the video; CBC did some good and serious research. The following is from a December 2006 story by the American Forces Press Service:

Canada, Australia, U.K. Sign Joint Strike Fighter Agreements

With the first flight of the Joint Strike Fighter set for this week, Canada, the United Kingdom
and Australia have “re-enlisted” for the program.

Canada signed on for the project’s production, sustainment and follow-on development phase during a Pentagon ceremony here yesterday. Australia signed on today as part of the U.S.-Australia ministerial meetings at the State Department, and the United Kingdom signed at a Pentagon ceremony today.

The Joint Strike Fighter is the Defense Department’s program for a “multi-role” stealth air-to-ground strike aircraft. The Navy, Air Force, Marines and allies are developing the system together.

Canadian Deputy Defense Minister Ward Elcock and U.S. Deputy Defense Secretary Gordon England signed a memorandum of understanding that calls on Canada to pledge $150 million toward production of the Joint Strike Fighter. Canada already has contributed $150 million to the system-development and demonstration portion of the program…

Elcock stressed that the program demonstrates how well the United States and Canada can work together. “The program will allow the United States and Canada to continue to benefit from each others’ wealth of technology and expertise,” he said.

Canada expects to retire its CF-18 fleet sometime after 2017, Elcock said. “Canada needs to explore what it needs from the next generation of fighter aircraft,” he said. “Our continued involvement in this project will help us determine our future fighter requirements for the Canadian Forces [so no commitment to buy at that time either]. Certainly, one capability we know we want to have is interoperability with the United States and our allies.”..

Earlier:

Canada and the F-35: Not much news here about possibility of a competition/Peter MacKay Update

The US Marine Corps, the F-35, and the Super Hornet–4.5 for Canada?

F-35: Video of Gov’t ministers before Commons’ national defence committee/Real reason for decision Update

Update: Round-up article from Defense Industry Daily:

Canada Preparing to Replace its CF-18 Hornets

Plus a balanced comment at Milnet.ca:

In fairness to Industry Minister Tony Clement, he is supposed to talk about industrial benefits and Canadian industry participation in the programme. Defence Minister Peter MacKay is supposed to explain the defence requirements and why the JSF is the answer to a military maiden’s prayers.

And see the following comment, relevant to this:

New fighters, Joint Support Ships, and Arctic Offshore Patrol Ships: What’s good enough?/Canada and the F-35 competition Update

US Upperdate: Thirty aircraft for Americans, note just one firm foreign sale, no price per plane given:

Pentagon, Lockheed sign F-35 contract

As for the Dutch (and Danes):

While the US government has completed negotiations with Lockheed Martin covering the fourth low rate initial production (LRIP) batch of F-35s, discussions about the price of the engines – covered by a separate contract – are not complete. This was disclosed by the Netherlands Ministry of Defense in a letter to Parliament yesterday [Sept. 23].

Despite Lockheed Martin’s predictions of bargain prices, the Dutch government is still bracing for higher-than-expected costs.

The defense ministry says that it is still waiting for US government’s approved CAPE cost estimate for the F-35A. (CAPE figures so far lump the three variants together.) However, the defense ministry has told parliament that it it is working with the JSF Program Office and its own government auditors to analyze the cost of the Dutch program. “To all appearances, the impact on the F-16 replacement project will be considerable,” parliament is told.

The ministry has also formally confirmed to Parliament that, if the JSF buy is approved by the next government [emphasis added], first production deliveries will be slipped to 2016 from 2014, in line with the delayed completion of development testing announced in March.

This follows Denmark’s decision to delay its own [F-35] fighter program…

More Dutch details:

September 24: In a statement to the Dutch parliament, the Minister of Defence Eimert van says that the cost of the F-35A for the Royal Netherlands Air Force faces a “considerable increase” and that the impact on the F-16 Replacement Project will also be “considerable”.

Van Middelkoop said that since the last report in 2009 the average cost per aircraft has risen from $69.2 million (€51.4 million) to $92.4 million (€68.6 million). To offset some of this cost the Dutch Ministry of Defence has pushed back the first delivery two years from 2014 to 2016.

Current plans are for 85 F-35As to be purchased in two batches (57 and 28 aircraft) to replace the entire F-16 fleet of 100 aircraft.

Why cannot (or will not) our government gives us any serious estimate of our price per plane?  Interesting also, is it not, that the Netherlands–a very small country geographically and with half our population–is planning to buy more new fighters than Canada?

Mark
Ottawa

9 Responses so far.

  1. old white guyNo Gravatar says:

    the idiots in government will keep talking until the f18′s are falling out of the sky. a jet fighter has one function and that is to wage war from the air.

  2. Blame CrashNo Gravatar says:

    The Conservatives are doing what they can to make this happen and all you want to do is moan and groan about it.

    Is “absolute perfection” the only standard you’ll accept?

  3. MarkOttawaNo Gravatar says:

    Hardly. It’s the government that say’s only the “best” will do for Canada (the F-22 not being available for export). That of course assumes that the F-35, now in flight testing and not operational, performs as advertised.

    I argue that the government should first define what types of missions, in what priority, it requires the new fighter actually to be able to conduct. Then hold a real competition.

    The fact is that the F-35 (Joint Strike/Strike Fighter) is optimized for ground attack, using stealth to enhance capability in strikes through heavy and effective air defences in the first days of a war. How relevant is that to what our Air Force is likely to be asked to do by future governements (keeping in mind that we would be hard pressed to deploy any more than say 20 aircraft abroad, which would not add that much in practical terms to an allied force)?

    Mark
    Ottawa

  4. Ha!No Gravatar says:

    Mark,

    It’s rather difficult to anticipate exactly what missions we may or may not be involved in over the next 20-30 years.

    The F-35 is clearly the best multi-use aircraft, regardless of it’s primary optimization.

    What’s the problem with that?

  5. wilsonNo Gravatar says:

    Well then maybe we should just buy some dilapitated garbage the Germans or Brits don’t want,
    and sink the saved billions into a new social program,
    like an Insite, junkie kiosks, on every corner in Canada.

    Then we would have military equiptment that we picked out of other countries recycle bins, (Suzuki would be proud!) boats that don’t float and aircraft that won’t fly !!!
    Crikie, we have to hang on to the Sea Kings tooo!

    And if we wait long enough, dither (Paul Martin would be proud)
    all the tec contracts will be picked off by other countries,
    and maybe, just maybe, we can get the unempl0yment line up to 10%…. just like Iffy’s homeland!!
    And use the billions saved for EI 360

    YES! I’m all in on keeping 20th century military equiptment,
    and begging for US to protect our borders….

  6. real conservativeNo Gravatar says:

    This is absurd. The missions are known from recent history and the F-35 is a multi-role aircraft, a new generation. When people ask ‘what roles for the F-35′ are you asking if we are planning a war or something? What happens will happen I’d say. Take the arctic, the Liberals got their knickers in a bind over the Russian bomber incursion while ignoring that England often chases the same planes our of its airspace and recently for example. China has argued that it ‘deserves’ a say in the coming arctic regime, will we have to fight them? If the Northwest Passage opens up, and it will, then anybody can go through there literally. We can’t patrol thousands of miles of shoreline with only a few ships, it isn’t enough.

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