By Lockheed Martin via the Canadian aerospace industry. A nice reason for Canada to select important military equipment, eh?
Canada’s aerospace industry would lose billions in contracts if the F-35 fighter jet contract were to be cancelled, according to documents obtained by QMI Agency [but we really have no idea what the value of those contracts might end up being, see below at "Plus" for the riverboat gamblers].
A copy of the Memorandum of Agreement that jet maker Lockheed Martin uses with its Canadian suppliers states clearly that Canada must be a partner in the Joint Strike Fighter program for Canadian suppliers to be able to bid.
In a section on requirements for a supply contract to remain in force, the memo lists several stipulations including: “C. the Government of Canada remains a Level 3 participant and procures JSF Aircraft as currently reflected in the JSF PSFD MOU dated December 31st, 2006.”
The document was provided to QMI Agency by an industry source…
About that 2006 Memorandum of Understanding on the JSF mentioned above, which is just between involved governments:
The F-35 and Canadian industry: What does the 2006 MoU say?..
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…What choosing the plane is all about: for the government it’s the economy–and jobs and votes–stupid, not really the CF:
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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 [emphasis added].”..
Plus:
F-35: Video of Gov’t ministers before Commons’ national defence committee/Real reason for decision Update
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Update: The truth about the government’s decision. At 11:00 industry minister Clement said that if Canada had not agreed this year to purchase the F-35 LM would have shut Canadian companies out of participating in much bidding for future contracts for the overall F-35 program. All about industrial benefits, made clear…Upperdate thought: This decision (not a contract yet) is not about traditional offset IRBs; it’s a fairly risky gamble when put under the gun by LM’s saying if we don’t commit now many fewer contracts will be available in a couple of years after a competition:
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Normally when aircraft are purchased, governments get iron-clad guarantees, called industrial regional benefits, that commit companies to spend dollar-for-dollar the value of the contract in Canada.Clement conceded the arrangement with Lockheed Martin provides no such guarantees and that Canadian companies will have to bid on opportunities, but if they win, they’ll be providing parts and services to the entire fleet…
The government’s decision has little, if anything, to do with defence or foreign/strategic policy considerations. The government is betting that Canadian companies will make a lot more money, and get better quality contracts, than would be the case through traditional IRBs were another plane chosen.
Riverboat types, eh?
And gambling with a Lockheed Martin gun to their heads. We are also now getting this completely misleading spin from the industry minister:
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Clement noted that in Britain, despite “the deepest cuts across the board in funding since the Second World War, reaffirmed its commitments to the F-35.”
Either Tony is being economical with the truth or he’s…
A prime Canadian F-35 ostrich
…
Future prospects for the F-35 joint strike fighter program got a lot murkier Tuesday after British government officials announced plans to delay and dramatically trim their purchases of the warplane from Lockheed Martin…
Meanwhile Lockheed Martin’s main US competitor, Boeing, is sniffing opportunities stemming from the F-35′s troubles (one does wish our journalists and political party researchers bothered to read the aviation and defence press):
Spending Reviews Stir Fighter Market
The U.K.’s decision to drastically alter its fast-jet fleet plans introduces new uncertainties into the global fighter market.
In a two-pronged move, London is trimming its buy of Lockheed Martin F-35 Joint Strike Fighters and changing course on the model.
…London has not specified its total inventory objective or when it will place its order [emphasis added--if ever depending on how the UK's finances develop over the next few years]…
The U.K. also opted to drop the F-35B short-takeoff-and-vertical-landing version in favor of the larger F-35C also being bought by the U.S. Navy. The SDSR says the decision was made because the F-35C would have a 25% lower life-cycle cost and greater range and payload capacity.
That could bolster the F-35C’s prospects. Long considered the most vulnerable of the three JSF versions—because the U.S. Navy is seen as less committed to the program because of its F/A-18E/F fallback option [emphasis added, that's the Super Hornet--see this post: "The F-35 and the fighters the US Navy still is buying…Will Canadian governments really need fighters more capable than the US Navy..."]…
With the F-35 in flux, rivals see opportunities not just in the export market. Rick McCrary, Boeing vice president for international business development, suggests a technology development for a new Navy strike fighter could begin in 2013 with work ramping up in 2016-17, as well as the extension of the Super Hornet as a “bridge” to the new program. He projects that a similar next-generation air-dominance fighter program for the Air Force would begin a few years later…
There sure is a lot going on the government either doesn’t know about, or else doesn’t want the public to know about.
Update thought: All three versions of the F-35 are still in flight testing so it’s hardly “off-the-shelf“.
Mark
Ottawa
Continue your great work on this important file, Mark.
Those who care about defence more than politics, and good policy more than political games, appreciate it.
Hey, Mark, do you remember who Gordon O’Connor used to work for before his 2006 election?
The name sounds familiar…offices in Bells Corners I think…
Wow, Mark you have an uber-liberal cheerleader!
Jobs jobs jobs.
The last thing Liberals want is for PMSH to succeed in keeping Canada’s economy off the rocks.
$12 BILLION is contracts is not a threat, it’s a promise.
Bring on the jobs!
Those countries reducing their committments have a HUGE debt problem, yet they are still buying.
The Conservatives don’t care about jobs. They care about elections and keeping power. Which is why they lie their way through this file and every other one.
If jobs mattered, they would have gotten ironclad guarantees, as is usual practice and has always been done in the past.
Like census and so many other files, they didn’t think anyone would pay any attention to this file after the photo ops (which for them is really the only really important thing when it comes to things military). But like census and so many other files, it is blowing up in their face because they got caught breaking a significant promise (on sole sourcing) and bungling the file (read the AG’s report and what everyone else in the world is doing/saying).
So they have to scramble and make up even more stuff about why they are breaking promises and why their bungling is OK.
It’s all after the fact spin. And it’s why Canadians increasingly think the government is going in the wrong direction.
Oh give it a rest Ted.
Iffy wants to kill the corporate tax cuts and kill thousands of jobs.
Iffy wants to shut down the oilsands for environmental review, and kill thousands of jobs.
Of course Prime Minister Harper wants to stay in government, and in power.
That’s what we elected him to do.
Of course the Coalition of Losers ‘says’ the government is going in the wrong direction.
They have said so for 4 years and 10 months.
Come the next budget, the ‘progressives’ on the opposition benches have been bitching and moaning for 5 years.
Except they have not signed contracts.
Mark
Ottawa
Actually, in effect sole-sourcing the Chinook Foxtrot was the right thing to do as there really is no competitive helicopter. What the AG criticized were aspects of the way the ACAN process was abused by DND/CF people, not the result. And technically, when an ACAN is used, it is not sole-sourcing as other companies are formally given a chance to bid.
But with the F-35 there has not even been an ACAN as the government appears not to have detailed requirements for the capabilities our new fighter must have (which necessarily involves specifying what roles it is expected to carry out, e.g. first-strike attack against a heavy and effective air defence?–the main mission requiring stealth).
Mark
Ottawa
What $12 billion Wilson?
Again, if it was even a thought of theirs before this debacle, then they would gotten some guarantees or at least some mention in the MOU, as is normal, or even have mentioned it once in their first spinning.
They didn’t.
And no one is saying we’re not going to buy planes so those theoretical job opportunities are not even theoretically gone.
Wilson Wilson Wilson. Dear oh dear.
The tax cuts have not been implemented so there are no jobs killed. We seemed to have managed quite well during the 1990s without them, as Harper keeps telling us the Liberal economy fared better than others during the recession without them, and we can’t afford to go deeper into this Conservative debt right now.
As for oilsands, Iggy has been fully supportive so I don’t know what you are talking about. Perhaps you’ve spent too much time cleaning ducks in the oilsand tailings ponds and the fumes have gotten to you.
And it isn’t the opposition parties saying the government is going in the wrong direction. It is the majority of Canadians and our view of the direction of the government has taken a sharp turn downward in the last 10 months.
Do keep up, please. Or stay away from tailings ponds.
Good lord, your logic is silly. Threats lead us to need a fighter capabability. Agreed. But why an all-purpose bomber/fighter like the F-35. There are other state of the art fighters that cost less. There is nothing superior about the F-35 to other similar 5th generation fighters.
If the government has $16 billion to spend it will create jobs whether it buys fighters or makes a $16 billion tax cut or spends $16 billion on roads. An expenditure that large will have an effect. It is a lame argument to suggest that $16 billion spent on the F-35 is the only way to make jobs.
The Conservatives have already put us into a $55 billion deficit. We can’t afford Harper and his fuzzy thinking.
The threats I’m referring to are from Lockheed Martin and the Canadian aerospace industry.
Mark
Ottawa
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