F-35 contracts hinge on Canadian purchase: Lockheed Martin

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Peter Kovessy
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Billions of dollars worth of contracts to build the F-35 fighter jet – a project several Ottawa firms are helping develop – could go to other countries if Canada chooses not to purchase the planes, warned a senior Lockheed Martin official.

Tom Burbage, an executive vice-president with the defence giant, did not make any explicit threats during an appearance before the House of Commons defence committee Thursday.

Instead, he praised the Canadian defence industry as having some of the best companies in the world, and said industrial benefits would exceed the estimated $9-billion up-front purchase price.

But under questioning, Mr. Burbage conceded that while Canada has contributed to the plane’s development so far, many of the contracts to manufacture the stealth fighter jets will go to countries that actually buy it.

“The program was founded on good-faith principles. There are industrial benefits that are being enjoyed by all partners and the assumption is there is going to be participation in the program,” said Mr. Burbage.

“If at some point Canada decided not to participate … we would look for nations that are interested in buying the airplane because we have to use the industrial work towards building the airplane with partners that are interested in flying it.”

Canada was the first country to join the F-35 Lightning II Joint Strike Fighter program in 2002 and has contributed US$150 million over the past decade to its development, according to Mr. Burbage.

While that contribution puts Canada in the lowest tier of contributing nations, he said the government support “positioned Canadian industry well to capitalize on the benefits that the Joint Strike Fighter program is offering.”

Several Ottawa companies are already involved in the project.

In May 2009, GasTops won a US$48-million contract through Pratt & Whitney to supply sensors for the F135 engine that will be aboard the F-35 Lightning II.

This past April, Mxi Technologies announced an extension of an agreement with Lockheed-Martin to include its autonomic logistics information system in the F-35.

In total, there are 54 contracts, worth $320 million, with Canadian companies already in place, said Mr. Burbage, adding some domestic firms – namely Mississauga’s Magellan Aerospace – are all but guaranteed future contracts because of their world-leading expertise.

A further 206 projects would go to Canada under Lockheed-Martin’s current industrial plans, which assumes this country’s participation in the project.

“The potential total industrial return for F-35s is unprecedented in the history of Canadian military procurement,” said Mr. Burbage.

Over the summer, the Conservative government drew criticism for announcing it would purchase 65 F-35s without a competitive bidding process. The total price tag, when support and maintenance costs are included, is estimated at $16 billion. The opposition Liberals have vowed to scrap the purchase if they form the next government.

Lockheed Martin has approximately 200 Ottawa-based employees, according to Ottawa Technology Magazine, but Mr. Burbage said they are not directly involved in the F-35 project.

See also: F-35 Lightning II: Striking economic gold?

Organizations: House of Commons, GasTops, Mxi Technologies Magellan Aerospace Ottawa Technology Magazine

Geographic location: Canada, Ottawa, US Mississauga

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