The Lockheed-Martin plant in Fort Worth, Texas, where Canada’s F-35 jets are being manufactured, is gigantic.
You need a motorized cart to get around the place. The assembly line, with its dozen or so planes, is an impressive sight, and there are many people busily working around each craft. But the most surprising thing is how spotless everything is. No leaking oil, no workers with greasy hands, everything clean and shiny.
A little further out are hangars that house completed F-35s which are still in testing (usually a period of four to five months). One hangar contains six aircraft, including the BK-1, the first F-35 model made for the British military.
The F-35 has been in development for the last 15 years. Ten aircraft were built in 2011, and this year, Lockheed Martin expects to deliver about 40 of them.
But there is still a lot to be done on the production line. Lockheed Martin currently produces about four aircraft per month, and this figure should grow to 17 over the next few years. In order to achieve this, the American company plans to increase its workforce on the production line from 600 to nearly 1,500, even 2,000 if necessary.
In a briefing in Washington the day before The Huffington Post Quebec’s June visit to the plant, the vice-president of F-35 business development and customer engagement, Steve O’Bryan, said that 2012 was “a very, very good year for the F-35.”
According to Lockheed Martin, the program is advancing well and production is even a bit ahead of schedule.
As of June 30, 2012, the F-35A had flown 260 test flights, while the B and C versions had flown 202 and 133 flights respectively, for a total of 595 flights.
CHECK OUT PHOTOS OF THE F-35 ASSEMBLY LINE
Inside the F-35 Factory, Ft. Worth, Texas
A CONTROVERSIAL PROJECT
The F-35 has been a lightning rod for controversy in Ottawa. The Auditor General accused the Department National Defence of hiding the full cost of the radar-evading jet by playing down the estimated $10 billion in operational expenses anticipated for the aircraft in the coming decades. The report also criticized Public Works for not following proper procedure and not demanding more rigorous justifications from the military for its choice of the Lockheed Martin fighter.
Responding to the audit, the Harper government took the file away from defence and gave it to a secretariat under Public Works. The government also promised to release regular cost estimates on the aircraft, which is still in development, and independently verify the figures. It will be fall before the public sees an independent assessment.
The controversy is not lost on Lockheed employees, though they appear to take it in stride.
“It was the same thing at the time of the CF-18 purchase, but we saw them in action during the first Gulf War, in Kosovo and in Libya,” said Billie Flynn, a Canadian who works for Lockheed as a test pilot. (He's also married to Canadian Astronaut Julie Payette).
Chris Kubasik, chief operating officer at Lockheed Martin, said he's had good communication with the Canadian government. "There are financial difficulties all over the world and we understand that governments are under pressure,” he said.
However, Vice President Steve O’Bryan warned a few weeks ago that Canadian companies could lose out on F-35 contracts if this country doesn't purchase the fighter jet.
“Right now we will honour all existing contracts that we have. After that, all F-35 work [subcontracting] will be directed into countries that are buying the airplane," O’Bryan said.
DIMINISHED RETURNS
The F-35’s potential economic benefits for Canada have diminished somewhat over time. According to Defence Department documents, the 2009 projection of $16.6 billion in economic activity was revised to $15.4 billion in 2010. For the same period, Industry Canada estimated $12 billion in Canadian industry contracts. Now it looks like it will be closer to $9 billion — over the next few decades, and only if the contracts are renewed.
Industry Minister Christian Paradis, Defence Minister Peter MacKay and Public Works Minister Rona Ambrose have all said on several occasions that the government plans to pursue new opportunities to increase the economic windfall from the F-35.
According to Kubasik, who will replace Stevens as CEO on Jan. 1, there will be new opportunities as the program continues. However, he also said he would look for the most competitive quotes from suppliers. If costs are too high or if a new supplier comes up with a better rate, Lockheed may decide to look elsewhere.
TRUE COST UNKNOWN
When it comes to understanding the cost of the F-35, the situation is reminiscent of someone selling you a fantastic car without telling you how much the insurance, gas and modifications to your garage will cost.
In October 2001, when the U.S. government first contracted Lockheed Martin’s Joint Strike Fighter program, the estimated cost was $49.9 million per aircraft (factoring in inflation). The costs then rose steadily to $84.9 million by December 2009. Some reports in the press have quoted figures of $100 million to $125 million.
The confusion stems from what is and is not included in the price.
Department of National Defence representatives stated before a Parliamentary committee in May that the unit cost was estimated at $85 million, or $9 billion for the purchase of 65 planes.
Industry Canada has indicated that the "recurring flyaway costs" of Canada's model, the F-35A, "include the airframe, the vehicle and mission systems, the motor and the propulsion systems.”
The CEO of Lockheed Martin told HuffPost Quebec that the latest figures at his disposal were closer to $70 million per jet.
The acquisition budget is divided into two parts: the costs for purchasing the aircraft themselves ($6 billion, plus Canadianization costs) and the costs for additional infrastructure (weapons, simulators, inflation), amounting to another $3 billion, which adds up to a total of $92 million per aircraft.
According to estimates from DND, it could cost up to $16 billion more for maintenance and future upgrades to the fighter plane. But this figure is also the subject of debate.
That maintenance estimate is based on a 20-year life cycle, but in reality the “normal” life cycle of an F-35 is closer to 36 years. If costs remain constant, this number would increase from $16 billion to close to $29 billion.
The total would therefore be $25 billion over 20 years or $38 billion over 36 years.
Nevertheless, there are other costs that are not accounted for in the acquisition budget for what is being called the fifth generation of fighter planes, such as future equipment and software upgrades, replacement planes in case of loss, pilot training and infrastructure adaptation, among other things.
With a file from The Canadian Press