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Bogdan: Canada Pullout Would Drive Up F-35 Cost

October 22, 2015 (Photo Credit: Lockheed Martin)

WASHINGTON — If Canada pulls out of the Pentagon’s F-35 joint strike fighter program, the remaining international partners will be forced to pay a higher price for each plane, according to the head of the Joint Program Office.

Canada is set to see a major shift in defense policy with the election this week of a new Liberal Party government. Prime Minister-designate Justin Trudeau has promised to pull out of the F-35 program, and to move quickly on replacing Canada’s aging fleet of CF-18 aircraft with another plane. He said Canada does not need a stealth fighter for its defense needs and that the F-35 is too expensive.

On Capitol Hill today, Lt. Gen. Chris Bogdan, JPO chief, said the remaining international partners would see a million-dollar increase in price per plane if Canada pulls out of the program. That country had planned to buy 65 F-35s.

“If any partner, or any service, moves airplanes to the right, takes airplanes out, the price of the airplane for all the other partners and all the other services goes up,” Bogdan told the House Armed Services subcommittee on tactical air and land forces on Wednesday.  “We have estimated the increase in price is 0.7 to 1 percent [or] about a million dollars a copy for everybody else.”

If Canada pulls its F-35 buy, there would be no impact to the development program, which ends in 2017, Bogdan stressed.  However, the international partners would be forced to absorb Canada’s 2.1 percent share in the cost of future sustainment and follow-on modernization, he said.

One unanswered question: If Canada pulls out of the F-35 program, what happens to the Canadian supply base, which has spent millions to help develop technology and components for the plane?

Bogdan said the JPO does not have a “set rule” to deal with this scenario, but said the international and industry partners should have a “discussion” about what to do with the Canadian companies building parts for the F-35.

“We do not have a set rule as to what happens to that industrial participation if a partner reduces airplanes, adds airplanes or leaves the program,” Bogdan said. “But it is my opinion that the remaining partners and our industry partners are going to have a discussion about what to do with all of the industry in Canada that is building parts for the airplane.”

However, Bogdan stressed that the JPO has not received any notification that Canada is prepared to pull out of the program. 

Liberal Party leader Justin Trudeau does not become prime minister until Nov. 4 and details about how he will proceed with the withdrawal from the F-35 program are still unclear. Asked about the impact on Canadian firms now building components for the F-35, a Liberal spokesman pointed to the party’s election platform that argues such companies could earn more work from an open competition for Canada's fighter jet replacement. That platform noted that under the F-35 program Canadian firms are not guaranteed work but under a Canadian-run competition they would be.

Email: lseligman@defensenews.com

Twitter: @laraseligman

 

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