Italy Takes $1 Billion Risk With F-35 FACO

By Amy Butler
Source: Aviation Week & Space Technology

The pair then inked a deal in late April for wings for LRIPs 6 and 7, including $60 million in non-recurring engineering cost. Alenia has already delivered six initial F-35 wing components to Fort Worth, starting with the “carry through,” or wingbox sections. It will begin building full wings within the next two years in LRIP 7 and deliver fewer components and more full wings until LRIP 11, when the company is expected to have its first all full-wing delivery to Lockheed Martin.

Some in Lockheed Martin have been skeptical about whether Italian workers will be able to work down the learning curve on the wings and deliver the same quality product at the same cost. This uncertainty is only bolstered by a previous rivalry between the companies stemming from soured relationships over the C-27J (Lockheed Martin was Alenia's U.S. marketing partner early in the tactical airlifter project), and the U.S. Marine One helicopter replacement program (Alenia's sister company, AgustaWestland, was partnered with Lockheed Martin until the Navy canceled it).

Debra Palmer, vice president of the FACO and international F-35 production for Lockheed Martin, says the company is actually “impressed by the lack of parts shortages on the wing . . . . Their parts discipline is amazing.” Parts shortages contributed to $1.2 billion in cost overages for early lots of F-35s rolling off Lockheed Martin's production line. “The marriage of lessons learned we had along with the demonstration of discipline they had on parts management will bode very well for the FACO,” Palmer says.

Italy plans to begin full FACO operations in LRIP 6, which is now being negotiated between the Pentagon and Lockheed Martin. As of now, the Netherlands is not expected to buy from the Italian line until LRIP 10, at the earliest. So, unless Italy can garner more customers for its FACO, it will only produce Italian aircraft until then.

Italy's FACO capacity is set at two aircraft per month, while Lockheed Martin's is up to 24 per month. The Italians opted not to have the “moving” production line, which moves aircraft through the stations at a set pace. Italian officials say that their FACO may eventually prove to be more efficient without the moving line. Lockheed Martin installed it expecting to roll one aircraft out per day, a prediction which is far from being realized.

Despite aggressive marketing in Europe by the Eurofighter consortium—which includes Alenia—for the Typhoon as an alternative to the F-35, the company's CEO, Giuseppi Giordo, says the two programs can coexist in Italy. “What we would like to have is a return in terms of quality of the work, not only a return in quantity of the work,” he says. In the near-term, “the real issue is not the recurring price, the real issue is the learning curve factor,” Giordo notes.

Before the ribbon is even cut, Italy has overcome significant hurdles to the FACO project. The U.S. government was opposed out of security concerns, but came around after seeing the physical location of Cameri, its inherent security and measures taken by the industry partners. Some prominent Italian politicians were skeptical. The U.K., the only Tier 1 F-35 development partner, passed on the FACO idea because it could not come up with a suitable cost-benefit case.

Italy's defense ministry, however, expanded the assumptions. While the U.K. studied only building aircraft for its own military, Italy widened the net to include final assembly of other partners' aircraft as well as MRO work, which could stretch to 2050. The FACO has 11 final assembly workstations, including four for the electronic mating and assembly system, and five MRO workstations. Seven of the FACO stations can be switched to support MRO in the future. The inclusion of the MRO in the financial assumptions shifted the math in Italy's favor when studying the FACO and helped get support for the project when it kicked off in 2009.

It remains to be seen, however, whether Rome will continue with plans to buy the F-35. Like other F-35 partners, the country is struggling with the economic downturn, and the program's dubious cost and schedule slips are not reassuring. Italy has already trimmed its buy to 90 from 131, including 15 F-35Bs each for the air force and navy.

Comments On Articles