Quotulatiousness

December 7, 2012

Is this the epitaph for Canada’s F-35 plans?

Filed under: Cancon, Military — Tags: , , — Nicholas @ 11:56

At the National Post, Kelly McParland offers two interpretations:

Ottawa is finally owning up to the fact the F-35 jet fighter purchase program is dead in the water. The Prime Minster’s Office insists the decision has not been made yet, but that’s reportedly just a formality. The killer was the cost: the government just couldn’t keep pretending it could deliver the jets for $9 billion plus expenses; it was more likely to be around $30 billion (which, curiously enough, is roughly what Parliamentary Budget Officer Kevin Page said they’d cost. Probably just a lucky guess. We’d ask him, but the Tories have duct-taped his mouth shut). The half-full view is that Ottawa bought into what seemed a worthwhile fighter, only to have the program unravel, and it’s doing the right thing (if a bit belatedly) in admitting it. Half-empty view is that the Tories totally mucked up the whole operation and were too pig-headed to look at alternatives from the beginning. Ya pays yer money and ya takes yer choice.

The odds against the RCAF ever getting their hands on the F-35 have been getting longer for a while: “GAO latest to attempt to shoot down the F-35” (March), “F-35 and the “bubbling skin” problem” (March), “David Akin: The F-35 fiasco is now a boondoggle” (April), “The F-35 program is “Military Keynesianism”” (April), “The F-35, the “supersonic albatross”?” (April), “The F-35 is “unaffordable and simply unacceptable”” (July), “The F-35 program in the cross-hairs” (November).

7 Comments

  1. As with any military procurement, there will be winners and losers. There will be unhappy people, and there will be the media standing there telling us that it costs too much. I really can’t wait to see how the next program costs out the procurement.

    I can’t wait to see what is next. The F-18s need to be replaced soon, and so they will go back to the starting point, draw up requirements, do a competition, take another 10 years to cycle through and get a replacement, all the while flying 30+ year old aircraft. Updated in some ways to be sure, but they are still 30+ years old.

    Don’t forget that no matter what eventually wins, someone will be there crying that we don’t need them and someone will be crying that they cost too much and we should spend the money on the homeless and the children.

    Comment by Dwayne — December 7, 2012 @ 12:24

  2. There are several problems in all of this:

    1. Modern combat aircraft are bloody expensive.

    2. In part due to item 1, there are few producers of modern combat aircraft.

    3. The government recognized item 1 and lowballed the number of planes they intended to buy.

    4. And even with item 3, the government realized they couldn’t get public support for that high a price tag, so they started playing silly games with duelling estimates, incomplete tallies, exclusions, etc. to get a headline pricetag that wouldn’t have the press gallery and the opposition sending them “thank you” notes for losing the next election in advance.

    5. And then bungling item 4.

    Comment by Nicholas — December 7, 2012 @ 13:46

  3. I’m sure that when the Liberal government invested in the development of the F-35 they couldn’t have predicted the probems with the project. Even the Americans would like to cancel it but are too heavily invested.The Cf-18s can be upgraded/rebuilt to current standards for a fraction of the cost and we already have trained people and parts. I believe Kevin Page’s estimate included wages and maintenance for the life of the planes which we would have to pay even if we didn’t buy any new ones.

    Comment by Bill — December 7, 2012 @ 13:50

  4. That’s a fair comment, Bill: all military hardware should be priced the same way, including the same relevant details to provide some kind of basis to judge whether we’re getting value for our money. Explaining how the final price estimates are arrived at is also a useful-and-necessary part of that job.

    If you buy a new car, you tell folks what you paid for it … that is, the number at the bottom of the bill of sale. Unless you’re a particularly Aspy accountant, you don’t include plus the cost of gas, oil, maintenance, car washes, insurance, winter tires, amortized cost of your driving lessons, etc.

    Comment by Nicholas — December 7, 2012 @ 14:01

  5. I tend to think our next fighter acquisition is going to be a push in terms of expenditures; either spend $30 billion on the F-35 now, or $30 billion on some current-production fighter (say the F-18E/F) in the long run.

    Let’s say we decide to buy a bunch of E/F-mod Hornets right now, with IOC occurring by 2015, and with the usual projected 30-year service life. The Super Hornet is only forecast to stay in the US fleet until 2025-2030, when they will be fully replaced by F-35s. Their retirement will provide us with a bonanza of cheap parts, but more importantly, USN stops being prime customer for important and expensive things like sensors, avionics and system integration. This will leave Canada (or Australia) the burden of having to come up with upgrades for these systems through the remaining 15 years of our fleet’s life.

    Since we don’t have a plethora of well-funded defense manufacturers who can carry this burden, we’ll have to buy it from Boeing or LockMart, and we won’t have the benefit of being able to just buy into USN’s upgrade blocks, since they won’t have planned upgrade blocks for that airframe any more. We’ll be bearing 100% of those costs ourselves. So yeah, we can have a cheaper airframe more or less right away, but we’ll be left holding the bag once it ages out of the fleet of its primary customer. When buying foreign military gear, there’s a certain logic to buying it in sync with the primary customer, to take advantage of cheaper upgrades through the life of the airframe.

    I’m not saying that the F-35 necessarily represents a great deal; only that the “cheaper” deal does have inherent cost increases too.

    Comment by Chris Taylor — December 9, 2012 @ 11:13

  6. A pity that the article in the NatPo had that ridiculous figure appended to it. When you read the whole article you find that DND cost estimates are confirmed, it is just that KPMG costed out the life of the aircraft to 42 years! How many people look at the cost of their car in those terms? Should we actually look at military procurement so we include the cost of the fuel to fly an aircraft, the cost of the oil, hydraulic fluid, the cost of all preventative maintenance over the life of all of the aircraft?

    Real people look at the cost to purchase, not the operating cost over 40 years. Can you imagine the estimated cost of the Hornet back in 1982 when we bought around 140 of them? Who could have projected 40 years costs, including mid life upgrades of sorts too. And KPMG has done that in their $40 billion price tag. Fun with figures…

    Comment by Dwayne — December 10, 2012 @ 01:47

  7. I’m sure that when the Liberal government invested in the development of the F-35 they couldn’t have predicted the probems with the project

    That’s crazy: I’m pretty sure that since the 70s there has not been e a big-budget defense delivered on-time and on-budget.

    When I enlisted in 1985 I was told ‘real soon now’ we’d be riding around in new amtracs, and Ospreys. There was even talk of a two-seat fighter-attack tilt-rotor. It looked _cool_. Twenty years later the jarheads rode into Iraq with the old amtracs and the Osprey was just being tested by HMX-1.

    One may not be able to predict _what_ was going to be problematic but you could bet something would be.

    Comment by Brian Dunbar — December 11, 2012 @ 14:33

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