Lockheed Orders C-130J Trainers from CAE

by: Matthew Potter
January 24, 2011

Category: Boeing, Business Line, CAE, Canada, Companies, Contract Additions, Contract Awards, Countries, Events, Lockheed Martin, logistics, Military Aviation, production program, Services, Sikorsky, UTC | RSS 2.0

Canada has been investing over the last several years in significant upgrades to its military as equipment from the Eighties ages and the demands of the fighting in Afghanistan have caused requirements for certain systems. Due to its availability and the need for integration with the larger American forces much of the new procurements are coming from the United States.

These include Boeing’s (BA) CH-47 helicopters and Lockheed Martin (LMT) C-130J transports and in the largest contract of all advanced F-35 Joint Strike Fighters to replace their CF-18 fighters. The JSF team is headed up by Lockheed as well.

Because Canada is buying from a non-domestic source they have written into a lot of their contacts offset rules that require a percentage of the value to be spent in Canada. For example Sikosrky, a UTC company, is providing S-92 helicopters to meet a search-and-rescue mission. In recent contract negotiations to settle delays the company agreed to invest a further $80 million in the Canadian economy beyond the initial contract plan.

As part of the massive JSF contract Lockheed will use a Canadian company, Bristol Aerospace, to build components for the aircraft. One advantage of this contract is that even if Canada reduces its buy or ends the contract Bristol Aerospace will still have the opportunity to make parts of the JSF aircraft being purchased by the U.S. and other Allies.

Then there are contracts that will go to Canadian companies anyway. CAE (CAE:TSX) is a Canadian based company that manufactures flight training devices and simulators for civil and military aircraft. It has operations and facilities all over the world including a substantial presence in the United States.

In the last week they announced they had received a series of contracts for simulators and training aids. These include one from Lockheed Martin to build C-130J weapon systems trainer, a fuselage trainer and a loadmaster part-task trainer. No value for the contract was given.

Even though this contract is not a direct result of the Canadian C-130J buy it illustrates how connected that country’s defense industry is to the American and world market. Canada is not making large systems for itself or other customers anymore but it is certainly providing supporting products and is able to use the offsets and investment by larger foriegn contractors to help its domestic defense industry and economy.

Photo from Stephen Edmond’s flickr photostream.

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