F-35: an Update
Mar 15, 2013

Government officials have been soundly criticized for insisting that the unit cost of Lockheed Martin’s F-35 Lightning II would come in around the $75-million mark. Now, as the government bows to the turbulence of continued criticism by ostensibly assessing other replacements for the aging CF-18 Hornets, Lockheed Martin says it is achieving astonishing cost reductions. Steve O’Bryan, vice-president of F-35  integration and business development, insists the company has managed to halve the cost of an aircraft in “combat configuration” by streamlining its supply chain and production line.

“When I hear things like the F-35 cost is increasing, nothing could be further from the truth,” O’Bryan said during a February media teleconference. Acknowledging skepticism, he repeated several times that LRIP5, the fifth low-rate initial production batch, had come in at a unit cost 50% below LRIP1 aircraft five years earlier. He said the LRIP5 cost was 13% below the $67 million U.S. government’s official estimate for aircraft ordered in 2017 for 2020 delivery. That worked out to slightly more than $58 million, including the Pratt & Whitney F-135 engine and the missions systems.

O’Bryan asserts that his company and its suppliers have been “really driving down the learning curve” from lessons learned from its own F-22 Raptor as well as legacy platforms such as the Grumman F-14 Tomcat, the McDonnell Douglas F-15 Eagle and the F-18.

“We more efficiently put the airplane together, we more efficiently put the supply chain together, and we drive down the price,” he told reporters. “We’re going to continue to do that and continue to add volume. We’re able to absorb the overhead rates [...] and [...] amortize that overhead over a larger quantity of airplanes.”

He explained that most previous fighter production lines had not been designed from the outset to handle the volumes envisaged for the F-35. With 187 aircraft delivered on a project run of more than 3,100 by 2039, contracts have been signed with the three U.S. customers – Air Force, Navy and Marine Corps – and eight export customers.

O’Bryan leveraged his presentation by pointing out that “even before Canada has ordered its first jet, we have more than $450 million with more than 70 Canadian companies under contract.” He believes the program will create more than $12 billion in industrial opportunities for the Canadian aerospace sector. “This isn’t just about bending aluminum; this is about advancing the Canadian aerospace industry,” he said, citing work already placed with Magellan Aerospace, Composites Atlantic, Honeywell, NGRAIN and Avcorp – work he says could include commercial as well as military application. Magellan, for example, manufactures a key element of the lift fan in the Short Take-Off and Vertical Landing F-35B even though Canada is not interested in carrier operations.

Ed O’Donnell, vice-president of international programs and business development at Pratt & Whitney, was also on the teleconference. He agrees that there were “huge opportunities” for Canadian industry. Describing the F-135 engine as essentially an evolution of the F-119 in the Raptor, he says P&W has transitioned fully into production now that “virtually” all the engine testing has been done.

Of the 87 engines manufactured by February 2013, he says 48 had been built in 2012, and predicts that “we will produce more F-135 engines than all of our other military engines combined at Pratt & Whitney.” Like LM, it had “exercised the supply chain” to improve efficiency, having started about four years ago on an aggressive “long cost initiative.” The result was “stronger and tighter relationships with the supply base” resulting in F-135 unit costs being reduced by $1.5M annually so far.

O’Bryan explains that 100% engine commonality across the entire F-35 production schedule, coupled with almost 100% avionics commonality, inevitably led to “much more effective” production and sustainment costs. He also notes that the ability to upgrade the aircraft’s software, which involves 9.4 million lines of code, is about 97% completed, and bodes well for Canadian suppliers. A measure of the F-35’s systems complexity is that the F-22 operates with only 2.2 million lines of code.

Approximately 70 F-35s have been rolled out of the factory, including more than 30 delivered last year to the U.S. Air Force and USMC as well as Britain which, like Canada and the U.S., is one of the original nine JSF partners. The others are Australia, Denmark, Italy, the Netherlands, Norway and Turkey.

Israel and Japan are the first non-partnership customers which have contracted to purchase F-35s and O’Bryan points out that for each copy they acquire, Canada will get “a cash payment” because of its status as an original partner in the Joint Strike Fighter program. Lockheed Martin does not track those numbers, however. Such data might eventually be available through Industry Canada as such transactions are government-to-govern­ment.

If Canada opts for the F-35, it will share parts inventory with the three U.S. services (Air Force, Navy and Marine Corps) and with coalition allies, which could also help contain operational costs, plus, says O’Bryan, “we’re necking down from nine different make/model series of airplanes to really one […] common F-35.”

General James Amos, Commandant of the U.S. Marine Corps, has said the Lightning II would replace his fleets of AV-8 Harrier jump-jets, and Boeing F/A-18 Hornets, and EA-18 Growler electronic warfare variants. Coupled with savings on training, spares and logistics, Amos evidently expects a $1 billion saving in USMC infrastructure costs alone.

The three decades of cooperation and increased interoperability between Canada, the U.S. and their NATO allies bodes well for the F-35, says O’Bryan “The future, the backbone, of the allied coalition fighter force, that is the F-35, and it will be for many, many years.”

Ken Pole is a contributing editor at FrontLine Defence.
© FrontLine Defence 2013