Wednesday, September 04, 2013
F-35 Could Cost Canada 71-Billion Dollars
It's only 25-billion more than the current estimates of the Department of National Defence but, hey, it's only money.
A worst-case scenario of cost risks in a Department of National Defence report on a possible acquisition of 65 Lockheed Martin F-35 stealth fighter jets estimates the airplanes could cost Canada up to $71-billion through acquisition, sustainment and operations over 36 years.
The costs, $25-billion more than the current National Defence estimate, are contained in a section of the department’s latest report to Parliament on the F-35 that outlines “cost risk and uncertainty” and is intended to provide a range of effects on the cost of buying and operating a fleet of stealth attack planes if factors such as inflation, the exchange rate between the Canadian and U.S. dollar, the cost of fuel and the rate of aircraft to be produced by Lockheed Martin fluctuates either higher or lower than the estimates that are behind the current National Defence figures.
Okay, so we won't know what this pseudo-stealth light attack bomber will likely cost until it's been sitting in our hangars for many years at least, but we might do a little bargaining to protect our investment. You know, at the start, when the dealer may be willing to make a few concessions.
How about something like this? Let's say the warplane's stealth factor accounts for half of its value. Why not get a guarantee from the manufacturer, Lockheed, that the F-35's stealth advantage will be valid for at least 20-years of the aircraft's 36-year lifespan.
If our potential adversaries deploy counter-measures that effectively defeat the F-35's stealth advantage within 20-years they give us, say, a 15-billion dollar rebate. If that happens within 10-years, make it a 25-billion dollar rebate. Within 5-years, boost that to 35-billion dollars.
This isn't playing games with Lockheed and their iffy, prototypical technology, not at all. It's recognizing reality. If the F-35's stealth mask is taken down, it loses most of its value. It is subpar in speed, agility, payload and range. On the other hand, it is conceivable that Lockheed or another contractor could continue to engineer new systems and system upgrades - new materials, new sensors, new cloaking mechanisms - to keep the F-35 at least somewhat viable but they could introduce massive extra costs we haven't reckoned on.
The rebate idea would put Canada in funds to either afford to upgrade and retrofit new stealth technologies, if they're feasible, or to help with the costs of finding a replacement aircraft sooner than anticipated if the F-35 has to be prematurely written off.
Given the price tag for the F-35, it's not reasonable that Canada carry all the risk for buying Lockheed's second-line stealth warplane. If we're to take Lockheed's promises at face value, then Lockheed should put real value behind those promises - in the form of a performance guarantee.