Lockheed Martin promises $ 16.9 billion injection into Canadian economy with F-35s

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One of the companies vying to build the Air Force’s next generation fighter jets promises it can inject up to $ 16.9 billion into the Canadian economy, even though his speech to the Liberal government goes beyond traditional boundaries.Lockheed Martin Canada is offering the F-35, which has a controversial political history in this country, as a potential replacement for the nearly 40-year-old military fleet of CF-18 jet fighters.

Three bids in the oft-delayed $ 19 billion contest were delivered on Friday and the federal government plans to narrow the field to two by next spring, with the first fighters not slated for delivery until 2025.

The other contenders are Boeing, which offers the latest version of its Super Hornet, and Saab with the updated version of its Gripen jet.

Under long-standing federal procurement policy, defense contractors are expected to essentially match the value of the contract and provide an equal share of benefits to the Canadian economy.

The global F-35 program is different in that the partnership under the program means that Canadian companies are allowed to bid on floating contracts and there is no dollar-for-dollar guarantee.

A Royal Australian Air Force F / A-18F Super Hornet drops flares as it performs during an air show October 2016 in Townsville, Australia. Boeing is offering its latest version of the Super Hornet as part of the three-way competition. (Ian Hitchcock / Getty Images)

Le pitch de Lockheed

In an elegant video presentation Thursday, Lockheed Martin showcased its Canadian partner companies already working on the program, providing a diverse range of parts and systems with employee testimonials on how proud they are to work on the F- 35.

Steve Callaghan, vice president of F-35 business development at Lockheed Martin, said he is confident the company has delivered a strong case to the Canadian government despite the difference and possible handicap it faces.

“We are delighted to be a part of this competition,” he said during a remote media availability Thursday. “We understand the rules. We understand the way the competition is structured and the requirements. ”

The company has performed an impact analysis of its program in Canada and estimates that over the life of the F-35 it will pay $ 16.9 billion into gross domestic product and that there is potential for more as the fighter aircraft sustainment contracts eventually come in. in streaming.

Lorraine Ben, CEO of Lockheed Martin Canada, said the fighter jet program is important for the country’s economic recovery after the pandemic, as it creates highly skilled and well-paying jobs.

If Canada did not choose the F-35, Callaghan said, existing contracts, which are currently worth $ 2 billion, would be honored for the duration of their engagement, but could go elsewhere.

“Future contracts would likely be placed using industries and the best value for countries purchasing the F-35,” he said. “Canadian industry is truly integrated into the global supply chain today and brings great value to the program and of course great value to Canada and Canadian industry. We really hope that the Canadian industry will continue to contribute.

Gripen, a Swedish fighter, performs on Day 2 of Aero India 2017 at Yelahanka Air Base in Bangalore, India in February 2017. Saab offered the latest version of the fighter as part of its sales pitch in Canada a new fleet of jet fighters. (The Associated Press)

Controversial story

It’s been a decade since the former Conservative government started a political storm by signaling its intention to source exclusively for the purchase of 65 F-35s.

After digging through the Auditor General and Parliamentary Budget Office reports, which questioned the cost and amount of work the federal government had done on competition, the plan was shelved.

The Liberals, before being elected in 2015, promised not to buy the F-35, but instead to buy a cheaper plane and invest the savings in the navy.

The Trudeau government eventually gave in and allowed Lockheed Martin to participate in the competition, and even gave in to pressure from the Trump administration to ensure that the playing field was level in terms of valuing economic benefits.

Callaghan avoided politics on Thursday.

“We’re really focused on this competition and providing the information Canada needs to make their decision,” he said.

Critics have often complained that the F-35 – a stealth fighter with advanced detection technology – would be too expensive to maintain in the long run.

At the moment, it costs $ 25,000 an hour to fly, according to figures released Thursday by the company.

Callaghan says the plan, using a variety of methods, including artificial intelligence and robotics, is to cut that number in half in the next few years.

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