F-35 Joint Strike Fighter (JSF)

[Good2Golf]

So under this system, with the F-35 being the only option open to Canada where the benefits to Canadian industry is not guaranteed, we would be competing solely with the United States as the only two users in North America. Any work sent to Canada would be a job taken away from an American in the eyes of many down south, so if the sale of the F-35 were completed to Canada, going forward what would be the incentive for a large American company influenced greatly by the American government to assign any significant amount of work to Canadian industry?

Not meant in a derogatory manner, but have you at all familiarized yourself with the multinational participative nature of the JSF industrial program? 

The value of what American industry would gain in production due to another national procurement would more than offset the fractional production diversion to that participating nation's industry.  Even if Canada did not procure JSF, it did secure some element of industrial participation through initial Tier 3 and Tier 2 participation.

Regards
G2G

 

[daftandbarmy]

F35 vs. CF 104.... here we go again?

http://www.theglobeandmail.com/globe-debate/will-the-f-35-be-another-widow-maker-for-canadian-pilots/article19133525/

 

[Edward Campbell]

Buzz Nixon, a former DM at DND, and one of the founders of the uber-influential CFN Consultants* has some thoughts which are reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/globe-debate/canada-does-not-need-fighter-jets-period/article19503129/#dashboard/follows/

Canada does not need fighter jets, period

CHARLES NIXON
Contributed to The Globe and Mail

Published Tuesday, Jul. 08 2014

C.R. (Buzz) Nixon was deputy minister of National Defence from 1975 to 1983.

It appears Ottawa has put on hold its decision to purchase next-generation F-35 fighter jets. It should go one step further and junk the purchase of any new fighters, period – saving $45-billion in the process. Canada does not need fighter aircraft.

New Canadian fighters would almost certainly never be involved in serious strike or aerial combat operations and are not required to protect Canada’s populace or sovereignty. They would only be of symbolic assistance (such as Canada currently is doing in Eastern Europe via NATO) and could provide support of ground forces in low-combat hostilities, which could be had more effectively and at lower cost by other types of aircraft.

The only credible aerial threat to Canadian territory, sovereignty and populace is a copy-cat “9/11” attack – a danger that essentially cannot be defeated by fighter aircraft.

Natural disasters at home or abroad would not require fighters, but could require helicopters, transport aircraft and other forms of military assistance.

Canada could be involved in providing humanitarian relief, peace-keeping or to help maintain order and protection of people and property - a type of operation would not likely involve aerial combat, but could require aerial support to ground operations. This type of operation could be provided more effectively and at lower cost than by using fighters.

The more-demanding roles for fighter aircraft – aerial combat and striking – would occur during an intense war involving major powers, which have F-35 or comparable (“Gen 5”) aircraft and also have the economic ability to fully engage in heightened warfare. The only credible foreseeable future situation where that could pertain would be a highly improbable war between the United States and China. Russia is – and will be for decades – a weak economic and military power trying to play a significant role in world affairs, moving gradually closer to the western industrialized nations and not exhibiting a perceptible effort to build up offensive military capabilities. For the foreseeable future, despite current tensions re Ukraine, Russia will not aggressively challenge the United States or its allies, in which case Canada does not need fighters for defence of Western Europe.

In the most unlikely event of war between U.S. and China, it is difficult if not impossible to concoct a credible scenario which would merit Canada providing Gen 5 aircraft.

Fighters simply cannot contribute anything substantial toward the achievement of the six Canadian defence objectives. The best course for the Harper government would be to defer any further decisions on military equipment procurement pending a thorough rethink about Canada’s defence posture.

A rethink should start with a study, analysis and assessment of the foreseeable state and trends of the world and the action of the major nations. It would then be possible, with the perspective such a study should provide, to specify the roles that the Canadian Forces may be called upon to discharge, and therefore indicate the size, organization and equipment that the Forces – land, sea and air – should have for the 21st century. The result would be a report more substantial and specific than the weak and specious out-of-date Canada First Defence Strategy.

I agree with Mr Nixon that the Canada First Defence Strategy is "weak and specious."

I do not agree, not wholly anyway, that "Canadian fighters would almost certainly never be involved in serious strike or aerial combat operations and are not required to protect Canada’s populace or sovereignty. They would only be of symbolic assistance (such as Canada currently is doing in Eastern Europe via NATO) and could provide support of ground forces in low-combat hostilities, which could be had more effectively and at lower cost by other types of aircraft."

I think Canadian governments can and will commit fighters, if we have them, to combat when that is the cheapest, safest way to accomplish national policy (strategic) objectives. Is that, in and of itself, a good enough reason to spend $45 Billion?  :dunno:  I'm not sure ...

If we don't defend Canadian airspace then who keeps or explicit promise to protect the approaches to America's strategic deterrent? (And make no mistake: it is a promise and it is one that the USA takes very seriously.) The obvious answer is that we would be required to cede some sovereignty to the USA - allowing the US to have sovereign bases in Canada and to fly in our airspace without our control.

___
* Crutchlow, Friedel and Nixon

 

[MarkOttawa]

E.R. Campbell:

...
If we don't defend Canadian airspace then who keeps or explicit promise to protect the approaches to America's strategic deterrent? (And make no mistake: it is a promise and it is one that the USA takes very seriously.) The obvious answer is that we would be required to cede some sovereignty to the USA - allowing the US to have sovereign bases in Canada and to fly in our airspace without our control.

Precisely.  And how all our lovely progressive nationalists would howl if the US took over our continental air defence.  What about defending our oh-so-precious "Arctic sovereignty"?

Now for that air defence role however "5th Gen" stealth fighters are not required as approaching bombers do not use radar to detect fighters as they approach since that would simply give away the bombers' position.

Mark
Ottawa

 

[dapaterson]

Maybe CFN lost out on a contract with Lockheed Martin?

 

[McG]

Buzz Nixon, a former DM at DND, and one of the founders of the uber-influential CFN Consultants* has some thoughts which are reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/globe-debate/canada-does-not-need-fighter-jets-period/article19503129/#dashboard/follows/

I would suggest another scenario the author should consider is Canada as the lead nation for a stability operation where belligerent factions do have an offensive air capability.  Canada has played the heavy lifter in such operations in the past, and there is also precedent for such peace/stability forces to get whacked by belligerent's air strike.

 

[RyanHealy29]

Not meant in a derogatory manner, but have you at all familiarized yourself with the multinational participative nature of the JSF industrial program? 

The value of what American industry would gain in production due to another national procurement would more than offset the fractional production diversion to that participating nation's industry.  Even if Canada did not procure JSF, it did secure some element of industrial participation through initial Tier 3 and Tier 2 participation.

Regards
G2G

Understood, but it's all unknowns and I'm talking perception among American voters, American companies, American government.

If Canada is not guaranteed X dollars in work when finalizing a purchase of the F-35, but instead has to bid, and our primary (only) competition in bidding will be American companies who hire American workers, I just question what LM's incentive would be to send significant work Canada's way if they've already got us locked in to the aircraft and there would potentially be major pressure on them to keep as much of the money for the 'North American' sector in the United States.

It just seems to me like the F-35 offers an unknown amount of benefit to Canadian industry under which Canada must compete for said benefits against a pretty significant juggernaut, while other options provide Canada with much  more definite and well defined industrial benefits as part of a procurement which do not require competition with firms from outside nations.

Right now LM has lots of incentive to dangle work in front of Canada because they want out orders badly. But once those orders are finalized and the wheels start turning and aircraft start being delivered to us, we're stuck with them, and then that incentive goes way, way down.

I'm not saying the F-35 is necessarily the worse option for Canada from an economic benefit standpoint, just that the system which Canada would have to compete in under the JSF framework seems to offer much more uncertainty and potential for funny business than the other aircraft on offer.

 

[PuckChaser]

I'm pretty sure that part of our purchase contracts on all major defense purchases require Canadian investment/business of a certain amount. The incentive to LM is not breaching that contract.

 

[RyanHealy29]

I'm pretty sure that part of our purchase contracts on all major defense purchases require Canadian investment/business of a certain amount. The incentive to LM is not breaching that contract.

But how would that work in a case like this where international bidding/competition is required? Can you really guarantee X amount of $s invested back into Canada if that is contingent upon Canadian industry having to bid to earn it? Doesn't the international bidding process sort of nullify the idea of a guaranteed investment?

Under a competitive bidding process what would happen if U.S. industry could, hypothetically, legitimately put together more competitive bids on all contracts than Canadian industry? Would LM have to select Canadian bidders despite this in order to meet the guarantees? I can't imagine that going over very well down south.

Or alternately, would Canada have to forgo the requirement of guaranteed Canadian investment amounts as part of a purchase agreement on the F-35?

 

[Journeyman]

Understood.....

Apparently you haven't.  Go back and read G2G's last line.  It's not unknowns; it's already contracted.

 

[Good2Golf]

For those with the patience to read the entire article, the United States Air War College published a paper earlier in this year on the subject of Canadian participation in the JSF program:

The Joint Strike Fighter / F-35 Program - A Canadian Technology Policy Perspective

Notable in its analysis, the paper investigates the amount of money invested by Canada to date (in the range of $150-200M) against confirmed revenue/earnings, as well as potential revenue earnings.

Regards
G2G

 

[RyanHealy29]

Apparently you haven't.  Go back and read G2G's last line.  It's not unknowns; it's already contracted.

No, it is unknown. Yes, there have been existing contract signed, but they are just that, existing contracts. They do not represent the total industrial benefit to Canada that the F-35 will produce, which is currently unknown. You're talking about things in the past, I'm talking about opportunities in the future. That's fairly obvious, but I suppose you just couldn't pass up an opportunity to be snarky.

http://www.ic.gc.ca/eic/site/ad-ad.nsf/eng/ad03968.html#toc_b

Look at the scale of "identified opportunities" compared to existing contracts in that document and tell me that the numbers are known and definite. They aren't. The final overall amount of industrial benefit that Canada would gain by continuing its participation in the F-35 and finalizing orders of the aircraft is currently unknown.

From that document, for your benefit:

"an overall prediction of the final value of work that will be secured by companies in Canada (or even a range of possible outcomes) cannot be reliably made at this point."

 

[Humphrey Bogart]

No, it is unknown. Yes, there have been existing contract signed, but they are just that, existing contracts. They do not represent the total industrial benefit to Canada that the F-35 will produce, which is currently unknown. You're talking about things in the past, I'm talking about opportunities in the future. That's fairly obvious, but I suppose you just couldn't pass up an opportunity to be snarky.

http://www.ic.gc.ca/eic/site/ad-ad.nsf/eng/ad03968.html#toc_b

Look at the scale of "identified opportunities" compared to existing contracts in that document and tell me that the numbers are known and definite. They aren't. The final overall amount of industrial benefit that Canada would gain by continuing its participation in the F-35 and finalizing orders of the aircraft is currently unknown.

From that document, for your benefit:

"an overall prediction of the final value of work that will be secured by companies in Canada (or even a range of possible outcomes) cannot be reliably made at this point."

The JSF has been in development since the mid 90's and is presently in the production stage.  At this point I think it's safe to say that Lockheed Martin and the GoC have a pretty good idea of what the final value of work secured by Canadian Companies will be  : regardless of whether we sign the contract to buy the planes or not.  The numbers just haven't been released for political reasons. 

Not meant in a derogatory manner, but have you at all familiarized yourself with the multinational participative nature of the JSF industrial program? 

The value of what American industry would gain in production due to another national procurement would more than offset the fractional production diversion to that participating nation's industry.  Even if Canada did not procure JSF, it did secure some element of industrial participation through initial Tier 3 and Tier 2 participation.

Regards
G2G

G2G, best let Ryan go off on his own, wouldn't want to let your "FACTS" get in the way of a good agenda. 

 

[RyanHealy29]

The JSF has been in development since the mid 90's and is presently in the production stage.  At this point I think it's safe to say that Lockheed Martin and the GoC have a pretty good idea of what the final value of work secured by Canadian Companies will be  : regardless of whether we sign the contract to buy the planes or not.  The numbers just haven't been released for political reasons. 

G2G, best let Ryan go off on his own, wouldn't want to let your "FACTS" get in the way of a good agenda.

I have absolutely no pony I'm backing in this race. Besides, industrial benefits should be, and certainly are, of secondary consideration to operational capability/needs. I find it very curious though how anyone can try and argue that the government already knows what the total industrial benefit to Canada will be when awarding of future contracts depends on a competitive bidding process that hasn't happened yet and there are future opportunities that haven't necessarily even been identified yet.

And based on your post, it's pretty clear which of us has the agenda.

 

[PuckChaser]

No, it is unknown. Yes, there have been existing contract signed, but they are just that, existing contracts. They do not represent the total industrial benefit to Canada that the F-35 will produce, which is currently unknown. You're talking about things in the past, I'm talking about opportunities in the future. That's fairly obvious, but I suppose you just couldn't pass up an opportunity to be snarky.

http://www.ic.gc.ca/eic/site/ad-ad.nsf/eng/ad03968.html#toc_b

Look at the scale of "identified opportunities" compared to existing contracts in that document and tell me that the numbers are known and definite. They aren't. The final overall amount of industrial benefit that Canada would gain by continuing its participation in the F-35 and finalizing orders of the aircraft is currently unknown.

From that document, for your benefit:

"an overall prediction of the final value of work that will be secured by companies in Canada (or even a range of possible outcomes) cannot be reliably made at this point."

Your comparison is not just a F-35 issue. How do we get economic spinoffs and contracts for the Gripen, or Typhoon which have well-established production lines in the EU? Same issue with Super-Hornet. The purchase agreements stipulate they must put money into the Canadian industry. How they do it, is their issue. You can bet if we buy F-35s, some Canadian companies will get contracts with similar or slightly higher bids so LM can meet the obligations.

 

[RyanHealy29]

Your comparison is not just a F-35 issue. How do we get economic spinoffs and contracts for the Gripen, or Typhoon which have well-established production lines in the EU? Same issue with Super-Hornet. The purchase agreements stipulate they must put money into the Canadian industry. How they do it, is their issue. You can bet if we buy F-35s, some Canadian companies will get contracts with similar or slightly higher bids so LM can meet the obligations.

You may very well be right, but it certainly doesn't present that way. In the IC link I posted above it clearly states that part of the structure of the F-35 program is that partner nations give up the right to offsets, and that is where the difference lies. The other options available to Canada do not preclude the government from requiring guaranteed offsets. Hence, the numbers for those options would be known upon the time of signing a procurement contract.

The F-35 program does not permit partner countries to demand these offsets, the tradeoff being the opportunity to bid on a larger scale of potential work, but with no guarantees.

From Industry Canada:

"In order to achieve best value through the competitive approach, the partners agree that “no requirement will be imposed by any Participant for work sharing or other industrial or commercial compensation in connection with this MOU that is not in accordance with this MOU.”Footnote 1 This commitment precludes the application of what are known as "offset policies", such as Canada's Industrial and Regional Benefits (IRB) Policy. Canada's IRB Policy requires companies that win defence and security contracts with the Government of Canada to place business activities in Canada at the same value of the contract."

 

[Humphrey Bogart]

I have absolutely no pony I'm backing in this race. Besides, industrial benefits should be, and certainly are, of secondary consideration to operational capability/needs. I find it very curious though how anyone can try and argue that the government already knows what the total industrial benefit to Canada will be when awarding of future contracts depends on a competitive bidding process that hasn't happened yet and there are future opportunities that haven't necessarily even been identified yet.

And based on your post, it's pretty clear which of us has the agenda.

Mate it's a company that makes stuff and in order for them to make stuff they need suppliers, some of which will inevitably be Canadian due to the fact that our defence industries are conjoined at the hip.  You ignore the fact Canadian industry has already benefitted from the production of this aircraft and will continue to do so, whether we buy the plane or not. 

 

[Good2Golf]

No, it is unknown. Yes, there have been existing contract signed, but they are just that, existing contracts. They do not represent the total industrial benefit to Canada that the F-35 will produce, which is currently unknown. You're talking about things in the past, I'm talking about opportunities in the future. That's fairly obvious, but I suppose you just couldn't pass up an opportunity to be snarky.

http://www.ic.gc.ca/eic/site/ad-ad.nsf/eng/ad03968.html#toc_b

Look at the scale of "identified opportunities" compared to existing contracts in that document and tell me that the numbers are known and definite. They aren't. The final overall amount of industrial benefit that Canada would gain by continuing its participation in the F-35 and finalizing orders of the aircraft is currently unknown.

From that document, for your benefit:

"an overall prediction of the final value of work that will be secured by companies in Canada (or even a range of possible outcomes) cannot be reliably made at this point."

Which is consistent with what i said earlier:

Notable in its analysis, the paper investigates the amount of money invested by Canada to date (in the range of $150-200M) against confirmed revenue/earnings, as well as potential revenue earnings.

So the Industry Canada 2013 contracted amount of $504M (which is a bit more than the $350-450M that then Minister Eggleton stated in 2001 would result from the investment of the initial $10M and follow-on Tier 3 $150M investment) - this is the amount I referred to highlighted above in blue, and the potential ESTIMATED contract revenue to be in the range of $2.8B (per 2003 DoD estimates) to IC's 2013 estimate of $9.4B - amounts that relate to the orange highlight above..

No one is questioning that future potential contracts are difficult to estimate accurately, understanding that much of that depends on whether Canada actually procures the aircraft or not, however, the program major elements of: 1) Investment of $150-200M as a Tier 3 partner, 2) $504M confirmed contracts in 2013, and 3) POTENTIAL future contracts of UP TO $9.4B, are extant elements.  Nor is anyone that I can see "arguing" that the GoC "knows" what the total industrial benefits will be.  Everyone other than you has used qualifiers such as potential, estimate, future, etc..., similar to the wording that other organizations have used when referring to future contracts.

For the record, as others who know me here would attest, I have no skin in the 'JSF game', other than to generically reference programmatics and note some specifics of this program as it relates to the larger programmatic framework.  I look forward to having it pointed out where I have missed out on the major financial elements of the investment/revenue framework of the JSF program.


Regards
G2G

 

[RyanHealy29]

Which is consistent with what i said earlier:

So the Industry Canada 2013 contracted amount of $504M (which is a bit more than the $350-450M that then Minister Eggleton stated in 2001 would result from the investment of the initial $10M and follow-on Tier 3 $150M investment) - this is the amount I referred to highlighted above in blue, and the potential ESTIMATED contract revenue to be in the range of $2.8B (per 2003 DoD estimates) to IC's 2013 estimate of $9.4B - amounts that relate to the orange highlight above..

No one is questioning that future potential contracts are difficult to estimate accurately, understanding that much of that depends on whether Canada actually procures the aircraft or not, however, the program major elements of: 1) Investment of $150-200M as a Tier 3 partner, 2) $504M confirmed contracts in 2013, and 3) POTENTIAL future contracts of UP TO $9.4B, are extant elements.  Nor is anyone that I can see "arguing" that the GoC "knows" what the total industrial benefits will be.  Everyone other than you has used qualifiers such as potential, estimate, future, etc..., similar to the wording that other organizations have used when referring to future contracts.

For the record, as others who know me here would attest, I have no skin in the 'JSF game', other than to generically reference programmatics and note some specifics of this program as it relates to the larger programmatic framework.  I look forward to having it pointed out where I have missed out on the major financial elements of the investment/revenue framework of the JSF program.


Regards
G2G

Right which in no way contradicts what I've said, that the overall value of JSF program benefits are all currently all hypothetical and estimates, and there is absolutely no guarantee that once the procurement has been made that the actual contracts awarded by LM will meet or even approximate the estimates since its entirely dependent on Canadian companies' ability to outcompete their American counterparts in a situation where there are no guarantees to Canada. My position is simply that this is riskier to Canada (from an industrial benefit standpoint) than choosing an aircraft where the contract can include guaranteed offsets which, while possibly less than the upper potential of the JSF, are locked in stone contractually.  I.e. Dassault offered 100% offset. Earlier on, SAAB had offered 120%. While these amounts are less than the upper estimate of potential JSF benefit, they would be contractually locked in stone. Potentially less reward, but also essentially zero risk if these offsets are contractually guaranteed.

I get the impression we're saying the exact same things but just looking at them from different directions. You see the estimates of potential benefits to Canada from the F-35, acknowledge that the total is an unknown, but see it as a positive overall due to the potential. I see the estimates, acknowledge that the total is an unknown, and see the risk associated with a lack of guaranteed reinvestment in Canada (which other fighter options would provide) despite the overall potential for higher benefits if the estimates are close.

And the quote about arguing that the government knows what the total industrial benefits will be was in response to RoyalDrew, who said exactly that in his second to last post, claiming the government knows essentially what the overall value will be and is withholding that number for political reasons.

 

[Journeyman]

......but I suppose you just couldn't pass up an opportunity to be snarky.

You saw that as snarky?! 

I was simply pointing out a line that you may have missed, which could have informed your thinking.


(No response required; by all appearances, you're the only one in step)