The Turkey problem

[Corsair1963]

I also see little reason for the US to provide New F-35's to Turkey. Before they sort out this mess. As we can easily absorb the additional F-35's. While, giving the work to other partners. In short we have little to no reason to bow to Turkey and every reason not too!

[XanderCrews]

The bottom line is the Lira has been on a slow downwards trend (i.e. losing buying power, increasing the price of all imports, fanning domestic inflation) since Erdogan gained national power from mid last decade. All that has occurred is that as Erdogan has become more and more antagonistic, and garnered more andnmore state power, the Lira's decline has accellerated.

This is a long-term ('secular' ...lol) trend, and as long as Turkey remains aligned with the "Erdogan & Sons" company trajectory, the Lira and domestic economy and crash 'n burn domestic stock market is not coming back up.

In other words, a sustained and now rapid collapse of the Lira means Erdogan will increasingly struggle to afford ANY imported goods, especially heavy SAMS or new foreign aircraft, from ANY source.

If he gets any of them, they will have to be a 'gift', not a purchase, or a foreign loan--Turkey can't realistically do either until the Lira reverts to a longer term average with respect to the USD.

So it is no longer just a matter of resolving a rift between Turkey, NATO and Washington. They could resolve that and still Turkey's Turkey has priced himself out of obtaining significant F-35s while the compounding affect on the Lira's decline lingers (and many other econmic factors play out).

Which trashes national reserves, shrinks state revenue, strongly amps inflation, continues protracted economic downturn, deepens the already deep stock market collapse, unhinges banks, shrinks asset prices, disrupts industry and production, freezes credit, devastates business and employment, undermines national security--those are just to foreseeables.

In other words, the rift with Washington (and the silly claims of economic warfare) are just another symptom--this is not the cause, nor is its resolution the cure-all for what is dragging Turkey and its currency down.

It's not about really about S400s, F-35s, Gulen (the excuse) or a Pastor, those are just pointy-out topical bits snagging and characterising the underlaying secular decline (pun intended) in Turkish leadership quality. Which has simply become more acute as Erdogan, family and sychophants took on more and more power.

Money has voted with its feet about those developments, because investor Sovereign Risk exploded as a result of it. And the Consitutional changes that embedded 'Erdogan & Sons™' has baked it in, so 12 more months will not be enough to unwind the snake that's choaking Turkey, which is a domestic snake not a foreign one.

IMHO, the F-35 is not going to Turkey until that is fully sorted out by the Turks themselves, so plan accordingly.

[PS: I hope all of the people wrongfully imprisoned get out soon, and frankly that's a bigger factor in this mess, and a much better and less selfish reason (and lever) to take Erdogan to the woodshed, than the good reasons of an imprisoned Pastor and S400 buy. Probably said too much, sorry if I did, but that's MHO of where the F-35 issue fits into this.]

I knew a Sgt, USAF who was stationed in Turkey for 4 years. I expected to hear dazzling stories of where east meets west, and exotic locations. He basically knocked all the romanticism out of me when he said "Its just like Mexico" Looks like its trending that way even more now. Oh well. The world needs more crapholes I guess.

[Corsair1963]

All the more reason not to provide them with F-35's!

[popcorn]

Why Mattis is lobbying for Turkey.

http://www.atimes.com/article/the-conse ... 5-program/

[spazsinbad]

This would be the ASPI Turkey Marcus Hellyer article referred to in the article immediately above:
https://www.aspistrategist.org.au/talki ... -the-f-35/

[basher54321]

Turkish pilot first F-35 Flight

645x450-turkish-fighter-pilot-carries-out-first-flight-in-us-with-f-35-jet-1535483091630.jpg (70.37 KiB) Viewed 35767 times

Maj. Halit Oktay became the first pilot from Turkey to fly on the F-35A on Aug. 29


Turkish fighter pilot carried out the first flight in the United States with one of Turkey's new F-35 jets on August 28, Turkish Armed Forces said in a statement released late Tuesday.

Early July, the Pentagon said Turkish pilots and maintenance personnel were being trained on the F-35 fighter jet in the state of Arizona.

Late June, Turkey took delivery of its first F-35 fighter jet at a ceremony in Forth Worth, Texas.

Turkey and the U.S. have recently been at loggerheads over the former's purchase of Russian S-400 missile systems and the arrest of terror-linked American pastor Andrew Brunson.

The Trump administration had decided to delay the delivery of the warplane to Turkey, citing the pastor's case and later its purchase from the Russians.

In early August, U.S. President Donald Trump approved a defense budget law delaying delivery of F-35 Joint Strike Fighter jets to Turkey. An amendment to the National Defense Authorization Act (NDAA), quickly approved by Congress, prohibits F-35 sales to Turkey until the Pentagon issues a report on Turkish-American relations in 90 days.

Still, the F-35 Joint Program Office announced on Aug. 16 that it would continue to execute current program plans with all partners, including Turkey, and to abide by any future policy guidelines.

Turkey has been in the F-35 program since 1999, and the Turkish defense industry has taken an active role in the production of aircraft and invested $1.25 billion in the aircraft's development. Alp Aviation, AYESAŞ, Kale Aviation, Kale Pratt & Whitney and Turkish Aerospace Industries (TAI) have been producing parts for the first F-35 fighter jet. AYESAŞ is also the sole provider of two key components of the plane.

Turkey plans to purchase 100 F-35 fighter jets in the coming years. Out of 100 aircraft, 30 have been approved. The country took delivery of its first F-35 fighter jet at a ceremony in Fort Worth, Texas, on June 21. The first F-35 aircraft delivered is also the first fifth-generation fighter jet to enter the Turkish Air Force Command inventory.

https://www.dailysabah.com/politics/201 ... h-f-35-jet

[spazsinbad]

Navy Builds Up to F-35C IOT&E; First Turkish F-35 Pilot Flies
30 Aug 2018 David Donald

"...Meanwhile, despite the temporary block on deliveries of F-35As to the Turkish air force that the U.S. government implemented earlier in the month, and despite erroneous reports that Turkish pilot training had been suspended, on August 28 the country’s first pilot to fly the F-35 took to the skies at Luke AFB, Arizona. Turkish ground technicians are also receiving training on maintenance and servicing. The initial pair of F-35As that was handed over to the Turkish air force in June was delivered to Luke AFB for training. Under pre-embargo plans, the third and fourth aircraft were also to be retained in the United States."

Source: https://www.ainonline.com/aviation-news ... ilot-flies

[spazsinbad]

No Change Expected in Turkey's F-35 Program Until Mattis Submits Report
26 Sep 2018 Oriana Pawlyk

"Two F-35A Joint Strike Fighters are still slated to be delivered to Luke Air Force Base, Arizona, for the Turkish pilot training program unless new direction from the Defense Department, expected in November, prohibits the move, Military.com has learned. Luke is expected to receive two more of the fifth-generation fighters for the program in early 2019, according to an industry source familiar with the matter. The base already has two jets for the training program.

Furthermore, the first two fifth-generation fighters are still on track to fly to Turkey sometime between July and September next year, barring any new evidence from Defense Secretary Jim Mattis and Secretary of State Mike Pompeo that the transfer must be indefinitely blocked per the 2019 National Defense Authorization Act (NDAA), the source said.

For now, "there has been no change to our contract or our relationship with Turkey as a partner, with Turkey as a supplier. Nothing's changed," said Greg Ulmer, vice president and general manager of the F-35 program at Lockheed Martin Corp....

..."The decision relative to the NDAA language is really government-to-government. They have to decide," Ulmer said. "Business is normal; [we're] still supporting the program."...

...Luke personnel also emphasized that the training course has not shifted or changed. "There has been no change to training or aircraft delivery at Luke Air Force Base," said 56th Fighter Wing spokeswoman Maj. Rebecca Heyse during a phone call. "Pending official guidance from [the Office of the Secretary of Defense], there has been no change to the Turkish pilot training or aircraft delivery."...

Source: https://www.military.com/dodbuzz/2018/0 ... eport.html

[popcorn]

F-35 production could be set back 18-24 months should Turkey retaliate against a F-35 embargo and withhold needed components for the jet.

https://www-dailysabah-com.cdn.ampproje ... eport-says

[KamenRiderBlade]

Maybe we should create a parallel supply chain ready for the parts that Turkey is creating in secret.

[marsavian]

Probably being already done. It was hinted at by a LMT exec in a video interview saying something about having to be ready for situations and contingencies.

[spazsinbad]

Maybe we should create a parallel supply chain ready for the parts that Turkey is creating in secret.

I'm guessing you mean "a parallel supply chain in secret"? Turkey otherwise makes F-35 parts in public.

[weasel1962]

I think its more LM setting up a parallel supply chain in case Turkey can't (or don't want to) supply their parts... or at least that's my reading. Don't think its that simple.

[blindpilot]

I think its more LM setting up... Don't think its that simple.

Agree it's not that simple.

If I am not mistaken, Lockheed already controls/orders the raw material parts of the entire supply chain. (for a display, the glass etc.) They do that to maximize bulk pricing. All suppliers to some extent are more assembly plants than vertical manufacturing (like the railroad-steel monopolies of old, which even owned the coal mines). While that's not 100% true it does give an insight into the supply chain process. So Lockheed can cut off/renegotiate/redirect (contract issues aside for the moment) the raw materials to any parts manufacturer. They manage all of that.

So even sole sources are integrated into the supply chain in ways we don't always see. It's a bit messy to sort this out in real production. A problem with bulk titanium or chip supplies from one place can impact a "part production" order on another continent.

As I understand it, Lockheed actually buys(contracts and pays for) these raw material level products, delivered to a "parts manufacturer." Thus the "parts" for the "parts" are already in complete Lockheed control. (It's the only reason a supplier can make the part at a given price point) Those raw material suppliers ship where Lockheed tells them to ship, or they don't get paid. Lockheed also controls via quality control systems much of the machinery (robots etc.) used to make systems. They often even buy and supervise installation of the tools. The economic benefit to a supplier is often little more than the labor and infrastructure costs/margins.

All of this is to say that much preparatory planning can be done behind the scenes without impacting or even visibility to the existing supply chain. But if Mattis says 18-24 months, that is probably a real estimate. The best they could do is to try and do some of those months of work ahead of a base schedule. Lockheed could do much of that unseen. That means if an aircraft is scheduled to ship to Turkey in 12 months, there is ... at best .. still a potential 6 month impact to the delivery schedule.

Yeah it's not that simple, but Lockheed still controls a lot of the issues/complications.

FWIW,
BP

[element1loop]

All of this is to say that much preparatory planning can be done behind the scenes without impacting or even visibility to the existing supply chain. But if Mattis says 18-24 months, that is probably a real estimate. The best they could do is to try and do some of those months of work ahead of a base schedule. Lockheed could do much of that unseen. That means if an aircraft is scheduled to ship to Turkey in 12 months, there is ... at best .. still a potential 6 month impact to the delivery schedule.

Yeah it's not that simple, but Lockheed still controls a lot of the issues/complications.

FWIW,
BP

Disruptive, but if all the existing airframes are bought to 3F in that time-frame that will help to hedge a delay and still deliver rising F-35 fleet combat airframes and deliverable capability.