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Netherlands Looks At Leaving F-35 Program

by: Matthew Potter
July 11, 2012

Category: Business Line, Companies, Countries, development program, Events, Holland, Lockheed Martin, Military Aviation, production program, Restructuring | RSS 2.0

The Joint Strike Fighter (JSF) program led by prime contractor Lockheed Martin (LMT) was designed similar to the successful earlier F-16 aircraft. Different NATO and other allied nations would contribute towards the development and also the production to spread the costs and benefits of the advanced fighter. The Netherlands was one of those countries that did this with a commitment of R&D funding and ultimately having a plant that would support their and Italian aircraft deliveries.

Now driven by austerity and cuts to the budget the Netherlands’ Parliament voted on leaving the program. New elections will be held later this fall and by then the plan is to report on the costs to the country of abandoning participation.

For 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 the Dutch to buy the necessary amount of aircraft with the funding available. This vote just formalizes those concerns.

Even with the vote the program continues to move along. The Japanese military has gone ahead with their order. The U.S. has placed orders related to Lot VI and VII of the production while continuing to negotiate Lot V.

At the same time the cost growth experienced by the overall program is making all purchasers re-evaluate how many they may buy. Cuts to production orders will only further increase unit costs as there will be less aircraft to spread development funds over as well as reduce economies of scale. The situation where a program is stretched out and annual buys reduced is a common one in defense acquisition leading to higher unit and overall costs.

While the JSF has shown a great deal of improvement over the last four years it still has a long way to go and its final numbers will most likely be much lower then originally planned.

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