Forum: F-35 Lightning II

Lockheed: Foreign investors will offset F-35 program DUSTY RICKETTS / Daily News 2012-Feb-04

http://www.nwfdailynews.com/news/fort-4 ... kheed.html

"...The U.K. and the Netherlands will be the first partners to receive its jets at Eglin.

All F-35s coming out of Lockheed Martin’s Fort Worth-based aeronautics center next year are expected to remain in the United States. In 2014, F-35s will be delivered to Italy and Australia, followed by more deliveries to the U.K. and Turkey in 2015. Japan, Norway and Israel will get them in 2016, along with Canada in 2017 and Denmark in 2018.

Although they have not helped fund the development of the F-35, Israel, Singapore, Japan and South Korea have agreed to purchase Joint Strike Fighters, O’Bryan said. In addition to the $65 million price tag for each jet, those countries will pay a recoupment fee to help make up some of the program’s development costs.

O’Bryan said Israel, Singapore, Japan and South Korea were expected to order more F-35s than the seven partner countries that contributed to the program’s development...."

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spazsinbad wrote:

Lockheed: Foreign investors will offset F-35 program DUSTY RICKETTS / Daily News 2012-Feb-04

They are hoping on the offsets.
Initial partner contributions were $4.4 billion.
I have heard of no new contributions. 2Billion from Britain and the rest from the other partners.

Cost $65M each!!!!. What with no engine - no radar - no IRST etc.
Maybe tyres are an extra also and the Helmet when they get one etc.

Last report reliable report I read put it at about $110m each. [A fully equipped aircraft.] US Defence report or US Airforce report or something.

The Australian contract for our first 14 signed last year was about $3.2billion. About $230m each.
I assume this includes necessary servicing, training of our first pilots and service people etc.

The total cost some years ago for 100 for Australia was put at $16billion.
[$160m] each.
Included initial training, spares and necessary servicing equipment etc.

If you look at contracts like these you can get a reasonable idea of the true cost to have them parked in a hangar and ready to fight with a service crew and spares in place etc. [Weapons - extra when they are ready.]
Obviously they will cost around $200m each by the time they are operational.

Oz DefMin Smith has re-iterated many times in interviews recently that Australia has committed to only two aircraft. Decision on next 12 this year sometime - likely to be delayed. You can play with dollar amounts all you wish but hey that is OK eh <ironic>

Australia reviews F-35 purchase timetable
Partner nation in fighter-aircraft program may slow its purchases
The Associated Press Posted: Jan 30, 2012

http://www.cbc.ca/news/world/story/2012 ... craft.html

"...Australian Defence Minister Stephen Smith said Monday that Canberra is only contractually obligated to take delivery of two of the warplanes. They will be based in the United States and be available from 2014 for training Australian pilots.

Smith said Australia is reconsidering its schedule of buying another 12 during the following three years.

"We will now give consideration to whether the timetable for the purchase of those 12 Joint Strike Fighters should occur on the same timetable," Smith told reporters....".

rkap wrote:

spazsinbad wrote:

Lockheed: Foreign investors will offset F-35 program DUSTY RICKETTS / Daily News 2012-Feb-04

They are hoping on the offsets.
Initial partner contributions were $4.4 billion.
I have heard of no new contributions. 2Billion from Britain and the rest from the other partners.

Cost $65M each!!!!. What with no engine - no radar - no IRST etc.
Maybe tyres are an extra also and the Helmet when they get one etc.

Last report reliable report I read put it at about $110m each. [A fully equipped aircraft.] US Defence report or US Airforce report or something.

The Australian contract for our first 14 signed last year was about $3.2billion. About $230m each.
I assume this includes necessary servicing, training of our first pilots and service people etc.

The total cost some years ago for 100 for Australia was put at $16billion.
[$160m] each.
Included initial training, spares and necessary servicing equipment etc.

If you look at contracts like these you can get a reasonable idea of the true cost to have them parked in a hangar and ready to fight with a service crew and spares in place etc. [Weapons - extra when they are ready.]
Obviously they will cost around $200m each by the time they are operational.

The $65 million refers to the expected LM “average” price.
It’s quite normal the price of a product is high when starting production (low numbers)

Suppose you forget the price of the F35 has been lowered from roughly $200 million to what it’s now.
There even is quite a difference in price, as example, between the first Dutch FD35A order LRIP 3 and the second order (LRIP4).
After this second Dutch order the price lowered again (as far as I know).

Compare this for instance with the Rafale deal India. Within 5 years the price doubled!
In stead of the F35, this is a production machine already.

From $10.4 billion in 2007 to $20 billion in 2012 (126 Rafales)
Or from $82.5 million to $158.7 million.

Quote: When the MMRCA selection process was initiated by MoD in mid-2007, the overall project cost was pegged at Rs 42,000 crore or $10.4 billion for 126 fighters.
Since then, with inflation also being factored in, revised estimates indicate the figure will touch $20 billion, if not exceed it. If India goes in for 189 jets, it will further head north.

http://articles.timesofindia.indiatimes ... -air-force

http://www.defencetalk.com/rafale-fight ... ies-40250/

rkap wrote:

Cost $65M each!!!!. What with no engine - no radar - no IRST etc.
Maybe tyres are an extra also and the Helmet when they get one etc.

I am not sure where you are getting this misinformation from, but several sources (including, but not limited to LM/JPO/Canadian Gov) have said that he $65 is the average FRP cost and includes all the items in the airframe (electronics, engine, EOTS, and yes even the tires).

Salute!

Remember that the unit cost is not simply what it costs for LM to crank out one, fully-equipped jet.

Closest analogy I can come up with is buying my Ford truck with lifetime oil changes, new tires every two years, minor repairs, wheel alignments, new brake pads each 50 or 60 thousands miles, new windshield every three or four years, and on and on. Then there's all the specialized ground equipment for servicing and repairs. Imagine what I would have to pay if Ford only built 1,000 of that model, and the costs of all the support stuff.

Oh yeah, folks divide the total cost of all the R&D, actual production costs and such by the units we buy. Hell, my wimpy Ford truck would cost $100,000 versus the $15,000 or so I paid ten years ago.

Gums sends...

[quote]"SpudmanWP"] but several sources (including, but not limited to LM/JPO/Canadian Gov) have said that he $65 is the average FRP cost and includes all the items in the airframe (electronics, engine, EOTS, and yes even the tires).

Quote:

Reading the responses to my questioning the $65m figure is like reading LM marketing and creative accounting. You all seem to be saying in 2020 when hopefully production is ramped up an established buyer should be able to pick up a new F35 ready to go at the LM factory for $65m+ an allowance for inflation they need one for any reason. e.g. replace a write-off. Correct or not and do you believe it?

Not the program cost. Not the lifetime cost - nobody can really predict that.

Gums wrote:

Salute!

Remember that the unit cost is not simply what it costs for LM to crank out one, fully-equipped jet.

Closest analogy I can come up with is buying my Ford truck with lifetime oil changes, new tires every two years, minor repairs, wheel alignments, new brake pads each 50 or 60 thousands miles, new windshield every three or four years, and on and on. Then there's all the specialized ground equipment for servicing and repairs. Imagine what I would have to pay if Ford only built 1,000 of that model, and the costs of all the support stuff.

Oh yeah, folks divide the total cost of all the R&D, actual production costs and such by the units we buy. Hell, my wimpy Ford truck would cost $100,000 versus the $15,000 or so I paid ten years ago.

Gums sends...

Right, but reoccurring flyaway is an important measure for figuring out several different aspects of a program's cost. There are a number of formulas we use to figure out what a fighter will cost in a certain year, the total program cost minus R&D, and what it should cost to support over the years.

While citing the program cost is a more effective indicator of one aspect or another of the program, as an analyst I need the RRF to do any effective analysis.

rkap wrote:

Reading the responses to my questioning the $65m figure is like reading LM marketing and creative accounting. You all seem to be saying in 2020 when hopefully production is ramped up an established buyer should be able to pick up a new F35 ready to go at the LM factory for $65m+ an allowance for inflation they need one for any reason. e.g. replace a write-off. Correct or not and do you believe it?

Not the program cost. Not the lifetime cost - nobody can really predict that.

That's correct, based on 2002 base year figure. This isn't "creative accounting" its evidenced based formulas that analysts utilize to predict future costs.

http://en.wikipedia.org/wiki/Experience_curve_effects

There are two ways to see $65 million as I discuss in this post:

http://www.f-16.net/index.php?name=PNph ... 603#210603

Quote:

There are two ways to see $65 million. Easiest is to look at last year's SARs for the USAF's purchase. Lets take 2020 year production estimate as our full production year. Basically dividing the number of fighters by the total REC (in then year) gives us $81.83 Million. Using a deflator to 2011 dollars brings $68 million.

You can also do it a round about way in the 2011 USAF budget request through using a learning curve formula and extrapolating for the 700th unit (or so).

Quote:

That's correct, based on 2002 base year figure. This isn't "creative accounting" its evidenced based formulas that analysts utilize to predict future costs.

The main reason I questioned the figure and still do! [the meaningless figure of $65m] is the other figures quoted in the article linked to in "spazsinbads" first post.
Quote from the article: The $50 billion development program for the U.S. government is being offset by more than $35 billion in investments from foreign countries.
Where does LM get that figure? The Partner Contributions were only $4.4 billion.
I call it creative accounting. That figure is obviously aimed at US taxpayers to allay some of the concerns about the Cost of the program. All I can assume is they hope to recover about $35b from export sales. A hope! - to date they have only a handfull of firm orders for export and not many at home. Where does the $35b come from?

rkap wrote:

Cost $65M each!!!!. What with no engine - no radar - no IRST etc.
Maybe tyres are an extra also and the Helmet when they get one etc.

Last report reliable report I read put it at about $110m each. [A fully equipped aircraft.] US Defence report or US Airforce report or something.

Don't confuse LRIP prices with FRP prices. The FRP price is for a fully equipped aircraft(engines, avionics, sensors).

Quote:

The Australian contract for our first 14 signed last year was about $3.2billion. About $230m each.
I assume this includes necessary servicing, training of our first pilots and service people etc.

That includes LRIP price, training equipment, spares, etc....

Quote:

The total cost some years ago for 100 for Australia was put at $16billion.
[$160m] each.
Included initial training, spares and necessary servicing equipment etc.

Aircraft, logistics, spares, training, etc...

wrightwing wrote:

rkap wrote:

Cost $65M each!!!!. What with no engine - no radar - no IRST etc.
Maybe tyres are an extra also and the Helmet when they get one etc.

Last report reliable report I read put it at about $110m each. [A fully equipped aircraft.] US Defence report or US Airforce report or something.

Don't confuse LRIP prices with FRP prices. The FRP price is for a fully equipped aircraft(engines, avionics, sensors).

Quote:

The Australian contract for our first 14 signed last year was about $3.2billion. About $230m each.
I assume this includes necessary servicing, training of our first pilots and service people etc.

That includes LRIP price, training equipment, spares, etc....

Quote:

The total cost some years ago for 100 for Australia was put at $16billion.
[$160m] each.
Included initial training, spares and necessary servicing equipment etc.

Aircraft, logistics, spares, training, etc...

And new buildings, security provisions, upgraded runways, increased fuel storage, engine test cells, environment impact studies and on it goes. The list of items is so enormous that dividing the number of fighters by the whole budget is simply pointless.

The whole budget is no reflection whatsoever of the cost of an individual fighter.

Last edited by m on Feb 09, 2012 - 02:38 AM; edited 1 time in total

rkap wrote:

Quote:

That's correct, based on 2002 base year figure. This isn't "creative accounting" its evidenced based formulas that analysts utilize to predict future costs.

The main reason I questioned the figure and still do! [the meaningless figure of $65m] is the other figures quoted in the article linked to in "spazsinbads" first post.
Quote from the article: The $50 billion development program for the U.S. government is being offset by more than $35 billion in investments from foreign countries.
Where does LM get that figure? The Partner Contributions were only $4.4 billion.
I call it creative accounting. That figure is obviously aimed at US taxpayers to allay some of the concerns about the Cost of the program. All I can assume is they hope to recover about $35b from export sales. A hope! - to date they have only a handfull of firm orders for export and not many at home. Where does the $35b come from?

Not entirly true.. there are also other costs payed by level partners, as for instance production costs F35 investment etc.
As an example, also other levelpartners did, the Dutch, till so far, contributed over €1.5 billion. Also, with the UK, the Dutch joined the IOT&E phase as well.

Not to forget, suppose this concerns for most level partners, investments in their own countries concerning the F35 project. Italy, not sure but over $1 billion or €1 billion?
As well as the UK did invest a lot back home, probably more than most other level countries.

Although some will think all components are developed in the US, this is not entirely true. Aviation Industry nowadays has become a international business,
with specific knowledge available in different countries.
It's not possible anymore, for any country, building a jet completely on their own, without using specific knowledge from other countries. Even the Russians can't.

Countries with this specific knowledge will have to invest, besides development, for instance also in new production methodes as well concerning the F35 project.

Especially the UK and Italy did spend a lot more than $2 and $1 billion
Most of all the UK, but also countries like Canada, Australia, Dutch, Norway etc. as well.

Not agree with you concerning orders by the US, as well as a handfull export orders

Some 88, till so far, are export orders. Total, some 200 F35's, including US orders, were/are ordered as far as I count.

Total Orders (2012, Febr.)
LRIP 1: 2
LRIP 2: 12
LRIP 3: 17 (UK: 2 / NL: 1)
LRIP 4: 32 (UK:1 / NL: 1
Total: 63 F35`s

LRIP 5: 32 (US: Long Lead items ordered)
LRIP 6: 32 (US: Long Lead items ordered)
Total: 64 F35`s

IOT&E Phase: Level 1 + 2
UK: 3 (LRIP 3 + 4)
NL: 2 (LRIP 3 + 4)

Other level partners
Italië: 4 (LRIP 6)
Australia: 2 (LRIP 6)
Turkey: 2 (LRIP 7)
Norway: 4 (LRIP 8 )
Total: 12 F35`s

Associated Partners
Israel: 19
Japan: 42
Total: 61 F35`s

Total ordered:
63
64
12
61
Totaal: 200 (Minus F35’s LRIP 5? / 32>30? )

Foreign countries: Total ordered + start delivery (Febr 2012)

UK
2011: 1
2012: 2

Netherlands
2012: 1 (Delivery: Aug. 2012)
2013: 1 (Delivery: March (?). 2013)
2020: 10 (LRIP 11 - Last LRIP series / When authorised by Dutch Parliament, delivery in 2020)

Australia and Italy2014: 4 (Italy)
2014: 2 (Australia)

Turkey and UK2015: 2 (Turkey)
2015: ? (UK: more F35’s expected)

Norway, Israel and Japan
2016: 4 (Norway)
2016: 19 (Israel)
2016: 42 (Japan)

Total ordered: Febr. 2012
88 (UK + 10 F35’s NL not included))

Given that the F-35 is the obvious choice for anyone looking to buy "top-of-the-line" over the next 30 years or so, I'm somewhat bumfuzzled that no one has come up with a viable international competitor (T-50 and J-20 have a rather limited potential-customer-base due to their size and interoperability/support issues). Many of the F-35's likely customers have little need for so much offensive capability, and it's not hard to imagine that they would prefer a lighter and simpler VLO platform. Then again, I guess it's nearly impossible for an American company to turn a profit on an all-new 5th generation design unless the USAF buys it in large numbers, and Europe doesn't appear to be up to the challenge anymore.

Forum: F-35 Lightning II

LM: Foreign investors will offset F-35 program