Potential Cuts by Foreign Partners Puts More Pressure on JSF

by: Matthew Potter
April 11, 2011

Category: Business Line, Canada, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, development program, Events, Federal Budget Process, Holland, Lockheed Martin, Military Aviation, production program, Restructuring, Services, U.S. Air Force, U.S. Marine Corps, U.S. Navy | RSS 2.0

One of the primary roles of the new F-35 JSF made by Lockheed Martin (LMT) is to replace the F-16 in service with the U.S. air Force and many Allied nations. Normally when the United States develops a new system it is not always with foreign sales in mind but with the JSF its sale to other countries has been a core consideration.

This does not only entail Allies such as Great Britain, the Netherlands, Canada and Australia contributing R&D funds but also their commitment to buy a certain amount of the advanced multiple-role aircraft. The price the U.S. will pay is adjusted for the larger annual and total quantity of aircraft purchased as part of the program.

This means ultimately that if current customers buy less then established with the current program the cost to the U.S. May go up. It also may affect the amount that may be bought with current planned funding. One option would be to increase the funding for the U.S. but at this time of planned reductions in the total Federal budget that may be hard to do. A more realistic scenario would see the amount of aircraft purchased for the Air Force, Navy and Marine Corps cut.

Right now there are serious debates ongoing over the JSF and it’s costs in two of the planned users. In Canada the Conservative government of Prime Minister Harper fell with a vote of no-confidence in Parliament partly due to distrust over the total price estimate for their F-35 buy. A new government formed aft elections could easily use this to walk away from the program and consider a different aircraft to replace aging CF-18 fighters.

In the Netherlands there have been serious debates over the program for three years which led to a vote to leave the program in their lower house. The Dutch like so many countries across the globe also announced cuts to their government spending including a potential reduction in the number of F-35 aircraft they would acquire.

Slight changes in annual and total quantities could easily cause bigger changes to the program with a negative effect on the U.S. plans. One option is to expand the potential customers with sales to Japan or Singapore or perhaps sell more to Israel to make up for these losses.

The JSF program is finally getting on track after years of delays and cost increases and does not need potential issues like this to cause more problems down the road.

Photo from Scootie’s flickr photostream.

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  1. Netherlands Looks At Leaving F-35 Program | Defense Procurement News on July 11th, 2012 2:33 am

    […] several years some representatives have expressed concerns with the growth of the unit cost of the aircraft and the delays to the schedule making it hard for […]

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