F-35 Joint Strike Fighter (JSF)

[drunknsubmrnr]

I think what HB is referring to is that the 46 Billion over 42 years includes only 9 Billion in capital.  Of that 9 Billion some 7 Billion will be spent with Lockheed Martin to purchase the aircraft and spares.  That money is subject to offsets.

That's $8.99 billion for acquisition with initial spares. As per the MOU, there are no offsets for that. Almost all of that would go to LM.

http://www.forces.gc.ca/site/reports-rapports/ngfc-cng/index-eng.asp#4

2 Billion of the 9 Billion capital, I believe, will be spent in Canada with Canadian companies buying hangars and also buying simulators, likely from CAE.  That money would not be subject to offsets.

Looks like $346 million for simulators, and they'd have to be bought from whomever wins that contract from LM. Probably through LM, but I'm not sure of that.

That leaves 46-9 or 37 Billion to pay the salaries of the pilots and the ground crew and such like as well as buying gas for the fuel tanks and replacement tires and other consumables together with domestic training costs. Those costs would not be subject to offsets as, like the hangars, they are paid with Canadian dollars to Canadians for services procured in Canada.

Nope. There's another $15 billion in sustainment costs for things like spare parts, which would normally ne subject to offsets but won't be under the MOU.

That works out to $24 billion so far.

The only portion of the 46 Billion liable for the IRB programme would be the 7 Billion or so spent on the actual fighters and some incidentals.

No, it's at least the $24 billion for the initial acquisition and sustainment.

Meanwhile Canadian aircraft manufacturers will sell 9 Billion in spares to the USAF, USN, USMC, RAF, RAAF, RNoAF, RNlAf........and the RCAF.  Amongst others.

That assumes we get all $9 billion in contracts that Industry Canada has identified, and which we're in competition with all the other countries in the MOU. That's pretty optimistic.

Your guess is as good as mine on how much of that we'd actually get, but 100% is unlikely. Even if we do, that's still a 33% return not 100%.

 

[Haletown]

Wonder if this story in a major Canadian newspaper by a well know journalist explains why the media coverage of the F-35 is so confused.

All these years later, the F-35 still hasn’t flown yet, and some countries, including Canada, are re-thinking their commitment. No one would be surprised if the U.S. cancelled the F-35, and that would be the end of it.

http://www.ottawacitizen.com/opinion/columnists/Christmas%2Bbreak%2Bjust%2Btime%2BHarper/7702339/story.html





Meanwhile, in the real world . .  .


"The Lockheed Martin F-35 Lightning II program surpassed 5,000 flight hours last month. This milestone was reached by the combined F-35 System Development and Demonstration aircraft flying at Edwards Air Force Base, Calif., and Naval Air Station Patuxent River, Md., and the training aircraft flying at Eglin Air Force Base, Fla. All three variants, the F-35A Conventional Takeoff and Landing, the Short Takeoff/Vertical Landing and Carrier Variant, participated in achievement of this goal.

Since the program's first flight in December 2006, F-35s have flown 3,464 times.
This total includes:
91 flights from the original test aircraft, AA-1;
2,510 SDD test flights; and
863 production-model flights.

In fact the program is concluding a very successful test year.  The program has remained ahead of its testing schedule throughout 2012.,

http://www.aerotechnews.com/news/2012/12/05/f-35-lightning-ii-program-surpasses-5000-flight-hours/

 

[PuckChaser]

Lets not cloud the issue with facts, its hard to sensationalize stories when you actually get facts and figures correct.

 

[Haletown]

Lets not cloud the issue with facts, its hard to sensationalize stories when you actually get facts and figures correct.

Probably just confused by the series of  "F-35 Porn" entries that are sprinkled throughout this thread.

Obviously faked footage of hours of F-35s flying. 

 

[Haletown]

Stevey over at the Rideau "Peace at any price as long as someone else pays for it" Institute gets caught red handed trying to juice the story by torquing  up the opinion pages.

"The second set of spam letters opposed the purchase of 65 F-35s, on pacifistic grounds. “Canada needs to reduce its military spending,” these letters declared. “$45-billion should be used instead for social programs … for the price of a single F-35 stealth fighter, 3,400 new teachers could be hired.”

Fair points and worthy of print — except these comments lost all their currency when they were made over and over, supposedly on the initiative of different letter writers.

http://fullcomment.nationalpost.com/2012/12/15/paul-rusell-a-quick-lesson-on-how-not-to-get-a-newspapers-attention/

 

[HB_Pencil]

DNS:

I think what HB is referring to is that the 46 Billion over 42 years includes only 9 Billion in capital.  Of that 9 Billion some 7 Billion will be spent with Lockheed Martin to purchase the aircraft and spares.  That money is subject to offsets.

2 Billion of the 9 Billion capital, I believe, will be spent in Canada with Canadian companies buying hangars and also buying simulators, likely from CAE.  That money would not be subject to offsets.

That leaves 46-9 or 37 Billion to pay the salaries of the pilots and the ground crew and such like as well as buying gas for the fuel tanks and replacement tires and other consumables together with domestic training costs. Those costs would not be subject to offsets as, like the hangars, they are paid with Canadian dollars to Canadians for services procured in Canada.

The only portion of the 46 Billion liable for the IRB programme would be the 7 Billion or so spent on the actual fighters and some incidentals.

The fact that the programme offers Canadian companies the opportunity to supply parts to the entire fleet of some 2000 to 4000 aircraft and make over 9 Billion in return is the real sweetener to which HB refers.

The programme will spend 7 Billion in the US on the aircraft and some 40 Billion in Canada.

Meanwhile Canadian aircraft manufacturers will sell 9 Billion in spares to the USAF, USN, USMC, RAF, RAAF, RNoAF, RNlAf........and the RCAF.  Amongst others.

My numbers may not be exact but they reflect my understanding of the information I have seen to date.

Cheers.

Basically yes, what you said is mostly accurate... sorry I was doing my replies on the fly so I couldn't really spend much time with them. I don't know what portion of the O&M Phase is devoted to spares, foreign training and foreign support. Those portions of the program (if they are undertaken outside of Canada or purchased outside of Canada) all be subject to offsets... but would be covered under a different contract. However the JSF Program will launch another "phase" to the program devoted to ISS, where Canadian companies (some of which currently possess contracts, as well as new ones) may bid for new contracts.

This area is a bit convoluted, because there are many different ways that O&M can be carried out. There can be one or many companies involved, with short term or long term contracts. Its nowhere near as straightforward as the production phase, where there is one vendor.

 

[Kirkhill]

Thanks HB:

I am going to take a chance now to exercise my non-professional accounting skills and "have fun with numbers" (everybody has to have a hobby  ;D )

Some thoughts of mine to be challenged.

Capital Costs

The DND plan reported by KPMG per the National Post appears to have been based on the following assumptions:

In 2016, or 10 6 years from the time of the estimate, the cost of the F35 would be 75 MCAD each.

At 75 MCAD/AC DND could afford to buy 65 F-35s and operate them at a pace that would consume 1.25 BCAD per year, or approximately 6% of the annual DND budget of some 20 BCAD.

Because the projected purchase was so far forward in the future a precise price, or cost of acquisition could not be determined. Accordingly an estimated range of costs was determined.

The estimated cost of acquisition seems to have been established as 75 MCAD/AC plus 25% (93 MCAD/AC) or minus 10% (67 MCAD/AC).  Based on my experience with projects (much lower in value and with much shorter timescales) that is a reasonable order of magnitude range of estimates for any project.

At a cost of acquisition of 75 MCAD per F35 the DND plan set aside a Capital Cost Allowance of 9 BCAD.  This included 4.9 BCAD for the actual aircraft, 3.3 BCAD for infrastructure (including hangars, simulators, etc) and a contingency of 0.8 BCAD (800 MCAD or 10% of the estimated capital costs).

With that budget in place DND could afford to buy up to 71 F35s at the nominal purchase price of 75 MCAD/AC.  If the price of the F35 rose to the upper level of the estimate (+25%) then DND could only afford to buy 57aircraft.  If  the price of the F35 dropped to the lower level of the estimate (-10%) then DND could afford to buy 79 aircraft.

Whether DND could afford to operate 79 aircraft within the 1.25 BCAD annual budget is a separate matter.  Just as whether DND’s operating costs would drop by only buying 57 aircraft is also a separate matter.

Limiting the number of aircraft purchased to 65, and allowing a pro-rated portion of the contingency fund to be consumed I estimate that DND could afford to buy the planned fleet even if the price at time of acquisition rose to 82 MCAD/AC.  In other words the plan could absorb a price increase of 10%.

Based on the numbers reported by the National Post and attributed to KPMG it appears that the current estimated purchase price is 78 MCAD, an increase of 4% over the planned price. That indicates that the programme is still affordable within the original plan and that DND could afford to purchase up to 68 F35 at the current rate.

Operating Costs

With respect to the Operating Costs DND projected an annual operating cost of 1.25 BCAD based on a 20 year operational life.  KPMG projects an operational life of 42 years and anticipates an annual operating cost of 1.1 BCAD.  This presumably includes capital cost depreciation and interest charges on the capital if any.

The reduction in operating cost is significant, amounting to 6.3 BCAD over the life of the project.  That means that the original DND projection permitted the purchase of a new fleet of aircraft after 20 years of service.  The revised projection means that the plan requires the F35 to fly for 42 years..........

As someone that has spent a good deal of his life trying to convince accountants, including KPMG accountants, to extend the capital depreciation period so as to make projects more affordable, I find it remarkable that KPMG or any other accounting firm would agree to such a structure.  In my industries the environment is less rigorous and the equipment is more rugged and can survive 20 to 25 years on the factory floor, and sometimes longer.  Yet it is virtually impossible to get an accountant to accept a mechanical equipment life longer than 7 years.

But here are those same accountants sanctioning the costing of a mechanical system over 42 years.

In the words of Yul Brynner “’Tis a puzzlement.”

Aircraft Costs vs Capital Costs vs Programme Costs

Based on the 75 MCAD/AC estimate and the 9 BCAD Capital Cost Allowance the total capital costs represent 20% of the total programme costs. 

But.

The aircraft costs are only 54% (56% at the current estimate) of the capital costs.

That means that only 11% of the total programme costs are going to Lockheed Martin to pay for the aircraft.  Lockheed Martin will receive other moneys for spares and maintenance but the vast majority of the remaining 89% of the programme costs will be spent in Canada by Canadians with Canadians.  Those costs include the costs of pilots, maintainers, trainers and administrators; hangars, barracks, runways and ground radars; refuelling services on the ground and in the air and training simulators.

Training Simulators.

Training Simulators deserve special mention.  It is anticipated that Canadian industry will generate some 9 to 10 BUSD (BCAD) in revenues from selling to the F35 programme and its clients.

Given the high cost of operating and replacing any modern aircraft more and more training time is being spent in simulators.  One of the world’s leading supplier of simulators is CAE (Canadian Aerospace).  CAE can reasonably be expected to be a major recipient of a large part of those revenues.  That will generate an additional 9 to 10 BUSD of foreign revenue to fund Canadian salaries, pensions and National Parks.

9 to 10 BUSD is 200% of the amount being spent with Lockheed Martin in the US to buy the aircraft.  This compares to 120% discussed above under the “traditional” IRB plan discussed above.

The income generated means that Canada is likely to make a foreign trade account profit of 5 BCAD on the programme.

In Short.

The programme seems to be affordable within the current plan.  The benefits to Canadian industry and the economy appear to be real and greater than the conventional alternative.

Also, given that the cost of the aircraft is only 11% of the programme cost, it seems unlikely that any alternative aircraft will significantly impact the total cost of the project. 

Most of the programme costs will be spent in Canada on Canadians supplying services to Canadians.

See the attachment for my worksheet/(playsheet)

 

[Haletown]

Kirkhill . . .  That's really, really good . . .  Thnx for the spreadsheet.

That would make an excellent Letter to the Editor or a submission to a Guest Writer section of a national newspaper.

 

[HB_Pencil]

That's $8.99 billion for acquisition with initial spares. As per the MOU, there are no offsets for that. Almost all of that would go to LM.

http://www.forces.gc.ca/site/reports-rapports/ngfc-cng/index-eng.asp#4p

Either not reading the document or just willfully stating wrong information to support your views. Its not 8.99 billion for acquisition with initial spares. This is the government breakdowns. I've marked X on things that IRBs would not apply, and ~ for things that IRBs might only partially apply:

F-35A URF Total 5,992
Ancillary Equipment 246
~Training and Simulation 346
~Support Equipment 379
Autonomic Logistics 44
X Manpower 371
X Depot Stand-Up 14
Initial Spares 259
X Programming Lab 216
X Infrastructure 244
X Ammunition 52
~Training 65
X Project Management Office 120
~Other 40
X Contingency (Note) 602 - Contingency funding may or may not happen. You can't really count something that you don't know what you might spend on, if at all, be paying for as a claim for IRBs.

So the Xs add up to 1.6 billion dollars... or $7.4 billion dollars that can be covered by the offsets. The ones marked by a ~ is difficult to be sure of, since some likely have some proportion of Canadian contracting contained within them. So no, its not $9 billion.

Nope. There's another $15 billion in sustainment costs for things like spare parts, which would normally ne subject to offsets but won't be under the MOU.

Again, you're not reading this right at all. This is the sustainment portion of the government's projections.

~Unit Level Consumption 5,357
X Depot Maintenance 791
X~ Contractor Support 1,979
~ Sustaining Support 4,530
~ Other Support 633
~Contingency 1,950
Sustainment Total 15,240

Depot maintenance will likely be done in Canada, and if contractor support is undertaken by an approved third party Canadian vendor (like Cascade with the C-130) then that could be excluded from the IRB total. Unit Level consumption includes labour costs, which means that a significant portion of that  $5 billion dollar line would not be hit by offsets. Its quite possible out of that $15 Billion, less than $10, if not $7 billion might come under the GCR. Contingency may never be spent and therefore really shouldn't be added to that total.

Furthermore There are plenty more industrial opportunities available to Canadian firms for the industrial development side, as I mentioned earlier. Since you're so fond of citing DND material, I'm surprised you completely missed this line:

As well, over the long-term, there may be other development opportunities to upgrade the aircraft's technology. Such work would represent additional opportunities not currently reflected in the data received by Industry Canada from the prime contractors.

Finally, sustainment opportunities will become available as global and domestic needs for maintenance and training are more clearly defined. At this stage of the Program, sustainment planning is still on-going and one sustainment opportunity has been identified for companies in Canada as of June/July 2012 reporting. However, over the life of the Program, substantial opportunities will be available in areas such as engine and airframe maintenance, component repair, and pilot and maintainer training. Companies in Canada will have the opportunity to compete for work, not only on domestic sustainment, but on sustainment for the global fleet. Except for one example, the value of sustainment opportunities is not yet included in the projections of industrial benefits for companies in Canada.

As I said, this phase of the program development has not really started and will likely obtain significant levels of contracts going forward. Canada is a major MRO hub in the military and civil sectors and is poised to obtain a large segment of contracts in the future.

That assumes we get all $9 billion in contracts that Industry Canada has identified, and which we're in competition with all the other countries in the MOU. That's pretty optimistic.

Your guess is as good as mine on how much of that we'd actually get, but 100% is unlikely. Even if we do, that's still a 33% return not 100%.

In my work, I've seen that Canadian Industries have actually been winning most of the competitions they have participated in. That's in part due to their strengths in aerostructures manufacturing and other specific sectors. They aren't entering into these competitions blind; in many cases they know their field quite well and have a good sense of where they stand. Furthermore a large proportion of the production contracts have already been won and that $9 billion dollar figure is fairly solid, allowing for changes in production length. I also don't think it includes current or potential sales to non-Partner countries, such as Israel and Japan

 

[Haletown]

Sad days at CBC and in Opposition Research.

"Assuming that the production ramp-up in the revised program unfolds as planned, the cost to build each Air Force variant of the plane should fall to $64 million in today's dollars in the tenth production lot, funded in fiscal 2016 and delivered in fiscal 2018. As with the legacy fighters in the force today, that does not include the engine, which the government procures under a separate contract. When you add up all the expenses, though, the cost of manufacturing each F-35A (the Air Force variant) five years from now looks likely to be identical to what manufacturing the latest version of a single-engine F-16 costs today. That's important because the plane was conceived mainly as a replacement of the aging F-16 -- although the F-35 will be far more survivable and versatile than the F-16."

It  is difficult to keep the " out of control costs" meme going when the price is decreasing.

But I am sure they will try.

http://www.lexingtoninstitute.org/latest-f-35-production-contract-keeps-program-on-glide-path-to-affordable-planes?a=1&c=1171

 

[a_majoor]

Just to throw in a winger:

Assuming the CF-35 cannot be revived for political reasons under a "review", maybe we should be looking at the "Silent Eagle" as a better option. Boeing is preparing to offer 60 to the ROK, and the Eagle is probably a better fit for us as well, given the long range and pretty impressive array of weapons it can carry.

This provides a platform which can do long range patrols of our arctic airspace or deliver a large amount of ordinance to support troops on the ground (or by varying the load out, can loiter for long periods of time and deliver PGM's on targets). Price wise, we are probably still looking at something very similar to what is already being mooted for the CF-35, but then again, almost anything up for offer is in that price range:

http://defense-update.com/20120914_silent_eagle.html

Boeing Cuts F-15SE Design Feature in Korean Fighter Bid
Posted by Richard_Dudley

F-15E with conformal fuel tanks and conventional vertical tail. The F-15SE will be similar to the current configuration, but will feature a conformal weapons bay, instead of the conformal carriage. Other features include improved new cockpit displays, avionics and defensive aids.

As competition to secure a $7.3 billion deal with South Korea for the Asian nation’s next-generation fighter enters its final stages, key “stealth” feature were dropped off Boeing’s F-15 Silent Eagle (F-15SE). Boeing’s F-15SE is in a tough round of evaluations as it competes with Lockheed Martin’s F-35A Lightning II Joint Strike Fighter (JSF) and EADS’ Eurofighter Typhoon to nail down a multi-billion contract with South Korea for as many as 60 fifth-generation fighters.

Back in 2009 Boeing praised the Silent Eagle’s stealth capabilities. Along with conformal weapon’s bay, canted tail fins were key stealth-enhancing features that would go far in reducing the fighter’s radar cross-section (RCS) return while also delivering slightly greater range, and much improved flight characteristics.

The canted tails would also, Boeing claimed, reduce the aircraft’s overall weight. Some industry specialists claim that the tail fins, canted outward 15 degrees, are essential in a stealth fighter design.

And now, Boeing said the canted tail-fin configuration would be offered only as an option and not a standard feature on the F-15SE. According to reports published by the Korean media, wind tunnel tests revealed the canted tail fins delivered only marginal improvement in the aircraft’s performance. (The most significant contribution of the canted tail in reducing radar reflection cannot be tested in wind tunnel)

In response to inquiries from Defense-Update, Boeing responded “Silent Eagle builds on a continuous evolution of capability in the combat-proven F-15 family of aircraft.” The company is “confident that our compliant Silent Eagle offering is best suited to address F-X requirements. Canted Vertical Tails, one of the many capability elements of the Silent Eagle, were offered as an option in our proposal to Korea…” Boeing commented.

Boeing went on to say that “our Silent Eagle offering is best suited to address F-X requirements and provides our ROK customer a highly capable, yet low-risk and affordable Silent Eagle F-X solution on a schedule that will meet the ROK requirements.” As clarification, Boeing insists that development of the canted tail surfaces was not being abandoned or suspended and the company intended to continue development efforts.

As with all things in life, cost and timely availability are also primary concerns, what makes reducing the developmental risk the F-15SE an advantage, rather than drawback for the Silent Eagle. With The F-35A is still in the developmental stages, the F-22 Raptor cannot be had, the Typhoon is no longer cutting-edge – the Silent Eagle may be the best deal on the table.

 

[Words_Twice]

As an old grunt who spent all is time in the back of things that fly, here is my ill informed opinion. The F-35 has one engine (strike one) it's max speed is less than what the North Koreans fly, it's payload is lame, it's range is lame, you could send very kid in Canada to Medical school plus a Porsche of his or her choice to go along with it, and thats about it. Who are we expecting to fight that requires these things? Nothing a Super Hornet or an F-15 could not deal with for way less than half the price. Our future wars are not to be against the Warsaw Pact, it will dropping bombs on Libyan freedom fighters or Syrian Freedom fighters or Fantasian freedom fighters, where we will enjoy total air supremecy. Just sayin'...............

 

[ArmyRick]

Words_Twice,

Seriously? I noted you started off with my ill informed opinion. Thanks for the honesty and being up front.

All we are going to do is drop bombs on Libyan Freedom Fighters? Really? Who knew when we got the CF-188 back in 1982 that someday we would be using them in Persian Gulf, Kosovo or Libya (amongst many other missions). So you know what the threats will be for the next 40 years? You know what technology will be around in the next several decades?

F15 or Super Hornet? So you want to use eighties/nineties technology/design concepts for the next almost half century?

The F35 is/was supposed to be something that kids in elementary school today would be flying in ten to fifteen years or so. Ya, the fighter may come on line in the next several years (at least it will for the US armed forces I bet) but there will be that stage of achieving initial operational capability.

If you have any real meat to your argument can you please put it forward. Read the stuff on here about F35 and you realize guys have discussed its capabilities and its cost and extended life cycle cost in detail.

 

[Jarnhamar]

Our future wars are not to be against the Warsaw Pact, it will dropping bombs on Libyan freedom fighters or Syrian Freedom fighters or Fantasian freedom fighters, where we will enjoy total air supremecy. Just sayin'...............

That's a heck of a call to make.

 

[George Wallace]

As an old grunt who spent all is time in the back of things that fly, here is my ill informed opinion. The F-35 has one engine (strike one) it's max speed is less than what the North Koreans fly, it's payload is lame, it's range is lame, you could send very kid in Canada to Medical school plus a Porsche of his or her choice to go along with it, and thats about it. Who are we expecting to fight that requires these things? Nothing a Super Hornet or an F-15 could not deal with for way less than half the price.

So you want our pilots to fly aircraft that would equate to the Sabres flown in Korea against the more maneuverable North Korean MiGs?

Our future wars are not to be against the Warsaw Pact, it will dropping bombs on Libyan freedom fighters or Syrian Freedom fighters or Fantasian freedom fighters, where we will enjoy total air supremecy. Just sayin'...............

To have total air supremacy, first you need to have aircraft to do so.  Those aircraft must also be more capable than those of the enemy.  We already have many potential enemies out there that have more capable aircraft. 

 

[Ostrozac]

The F-15 Silent Eagle is interesting. Well it is really an upgrade of an old-school designs, so is the Super Hornet that the Aussies are acquiring. And the Boeing corporation has a very large Canadian footprint (larger than Lockheed Martin), so when it comes time to talk industrial benefits around the cabinet table that may help their cause.

And it is a two-seater. Back in the days of the CF-101 Voodoo, what was the MOC of the back-seater? Was he an AirNav, Pilot or something else?

 

[SeaKingTacco]

Air Navigator.  Now known as Air Combat Systems Officer.

A two crewed aircraft, while possibly operationally desirable, would certainly increase the overall life cycle costs of operating it.  Those PYs have to come from somewhere (pretty much a zero sum game in the CF today); they have to be trained and paid.  I cannot see that making it cheaper than the F35.

 

[AlexanderM]

It would require major design changes to make the F15 a supercruise aircraft, correct?  They can't just tweak the design for supercruise, can they?

 

[Retired AF Guy]

The F-15 Silent Eagle is interesting. Well it is really an upgrade of an old-school designs, so is the Super Hornet that the Aussies are acquiring. And the Boeing corporation has a very large Canadian footprint (larger than Lockheed Martin), so when it comes time to talk industrial benefits around the cabinet table that may help their cause.

And it is a two-seater. Back in the days of the CF-101 Voodoo, what was the MOC of the back-seater? Was he an AirNav, Pilot or something else?

Apparently the F-15SE has been having some problems. There is only one model flying (from what I understand) and they have been having problems with the canted vertical stabs and with the design of the conformal weapons bays. May be when we see more of them flying we can then consider them as an candidate. 

 

[Haletown]

It would require major design changes to make the F15 a supercruise aircraft, correct?  They can't just tweak the design for supercruise, can they?

It does it now, why tweak it?