Canadian companies employing thousands of workers would be hurt if the Harper government abandons the multibillion-dollar purchase of F-35 fighter planes, said the head of aerospace cluster Aero Montreal.
F-35 Lightening II Joint Strike Fighter (Image courtesy Lockheed Martin)
Gilles Labbe said the aircraft's lead manufacturers, Lockheed Martin and Northrop Grumman, could remove work destined to be completed in Canada by various suppliers if the federal government doesn't buy the 65 planes.
The warning echoes statements made in Ottawa by a Lockheed Martin executive in December 2010, who said Canadian contracts would depend on the federal government purchasing the planes.
Several Ottawa defence and security firms have previously received contracts for the F-35 project, including GasTops and Mxi Technologies.
The Conservative government froze spending on the defence program earlier this month after the auditor general produced a withering report accusing the Department of National Defence of keeping Parliament in the dark about the program's spiralling problems.
Labbe heads Heroux-Devtek (TSX:HRX), which provides landing gear for all fighter planes produced.
The company's work will continue in the United States but work done in Canada by itself and other F-35 suppliers could be shifted outside the country if the government's commitment evaporates, he told reporters at Aero Montreal's annual meeting.
Labbe wouldn't say what he thinks Ottawa and other countries will decide, but he believes the entire program will ultimately go ahead and deliver more than 3,000 aircraft in the long term.
The United States has reduced the number of aircraft it will purchase in the short term.
That will have an impact on Heroux-Devtek, but "nothing that we cannot cope with," he said.
Overall orders should be flat in 2012 and start ramping up a little in 2013 and more in 2014.
In three to five years, more planes will be delivered, helping Heroux-Devtek and other Canadian suppliers, Labbe added.
Meanwhile, Labbe said the aerospace industry has started to recover from the global economic crisis with increased commercial aircraft production and orders for business jets.
-With files from OBJ staff