JSF Multi-Year Buy - Dead or Just Resting?
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Posted
by Bill Sweetman at
10/5/2009 6:03 AM CDT
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A plan for a five-year, eight-nation, 368-aircraft order for Joint Strike Fighters is dead, according to a senior Australian government official. According to Australian Financial Review (subscription site) Defence Management Organization chief executive Stephen Gumley has told Australia's parliament that a lack of interest among partners, plus US procurement rules, has killed the plan. (To "cruel" something, in Australia, means approximately the same as "kibosh" - its implication is terminal.)
Gumley also told AFR that, as a result, Australia may defer its main JSF orders by two years, to 2015 (with delivery in 2017) to avoid buying high-priced low-rate initial production aircraft.
Although Lockheed Martin says that the team is still working on the consortium buy, Gumley's statement - from a senior, pro-JSF customer representative - does not read like a negotiating position.
The idea of a consortium buy was mooted in early 2007. It was designed to address an emerging problem: many of the industrial partners need most or all of their aircraft early. As a result, many of their aircraft would be ordered under the Low Rate Initial Production (LRIP) phase rather than from the much less expensive multi-year production (MYP) stage - which can't, under US law, begin until operational testing has finished.
The consortium buy would have leveled out the price over time, and would have given the international partners some reward for their contribution to stabilizing the early production program: unlike US buys, these would represent firm advance commitments for deliveries as much as seven years from the contract date.
 2008 consortium buy plan The plan would also have included penalties. Any customer canceling or delaying deliveries would have to compensate the other members of the consortium for the increased unit costs that would result from their backsliding.
The consortium buy plan has been through several iterations. An early plan foundered in May 2008 because partners did not like the idea that they were locked into penalty payments but the US was not. A revised plan that also locked US buys into place was scotched because Congress was unlikely to accept it. An August 2008 revision ran into the same problem.
If the consortium buy does not go ahead, the next question is what impact it will have on costs. Gumley predicts that customers will delay their orders - reducing production rates and increasing unit costs in the later LRIP years. Some governments, including the Netherlands and Norway, have also promised low, fixed prices to their parliaments and voters, based on the multi-nation buy. Ministers such as the Netherlands' Jack de Vries may have some explaining to do.
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He has a lot of explaining to do, he has been planning for 52 F-35s instead of 85 since 2005 when he realized that Holland could never afford to buy 85 jets, but to the public and the parliament he kept on saying that they could afford 85...
Also, when the F136 is cancelled, the dutch industrial package is reduced with about $1 billion. The dutch industry will probably be supporting the Gripen NG in a few months...
"An early plan foundered in May 2008 because partners did not like the idea that they were locked into penalty payments but the US was not. "
Yeah, that would have been great. USAF cutting their order with about 1000 jets, unit price sky-rocketing. Denmark, Norway & Holland paying $200 million a piece for 20 jets only since they could not afford to get out of the program...
Seriously, what do you get in return for being a european "partner" in this program (except for having your flag on the test aircrafts)???
Can RAAF F/A-18 A/B Hornet fleet maintain front line A2A superiority out to 2019-2020??
Perhaps at least another squadron of Super gap-fill will be necessary? Maybe something like: 2 squads of Supers, 1 squad block IV and 1 squad block V JSF??
And just something totally random, just noticed (looking at the graphic included above)... is that a Typhoon heading straight for the 'U.S. Buy' text (left hand side of chart)? Hmmmm.. lol.