Way back when... Thana Marketing Part 1

Back in 2002, Australian politicians were briefed on the F-35 Joint Strike Fighter.

Let us first look at the initial brief by a U.S. representative. It should fit in very well with the over-optimism and "marketeer" problem in relation to Australian weapons systems procurement recently discussed by our elected officials.

Bold emphasis mine.


COLONEL DWYER DENNIS: Thank you, Air Vice Marshall Conroy. Thank you for the opportunity to come here today and brief the Joint Strike Fighter program. What I'd like to do today is just give you a brief overview of the Joint Strike Fighter program. How it was developed, what phases we've gone through thus far, and where we are today and where we're headed.

First of all I'd like just to talk a little bit about the vision of the Joint Strike Fighter program. First of all we see it as being the model acquisition program for both joint and international cooperation. And with the goal and intent of developing and producing an affordable next generation strike fighter weapon system. Not only to develop that system, but then to be able to sustain and support it worldwide.
Joint. The Joint Services is that the Joint Strike Fighter is a replacement strike fighter for both the US Navy, the US Marine Corp and the US Air Force and, of course, the international aspect of the program. We have various allied partners and, of course, we're in negotiations, as Air Vice Marshall Conroy just mentioned, for Australia to join in as a partner.

What is JSF? Well, first of all it's a family of affordable multi-mission fighter aircraft using 21st Century technologies. The Joint Strike Fighter is a single seat, single engine, stealthy, low observable aircraft. Its capability, as far as aerodynamical handling as a minimum, is an F-16, F-18 type of aerodynamic performance. And then, on top of that, is the stealth capability and advanced mission systems.

Just a quick look at the family of aircraft. It's basically a single design, but it's really three aeroplanes with the unique features to meet the unique requirements of the three Services. The CTOL, or Conventional Take Off and Landing Aircraft, is the variant for the Air Force, primarily.

The STOVL, which is Short Take Off For Vertical Landing, is for the US Marine Corp. And then the C Variant is the carrier variant.

You'll notice here from this picture a little larger wing area and tail section, and that's to provide a lower approach air speed for carrier operations.
You can see across the three variants, even though they will meet the unique mission requirements, there's great commonality between the aircraft. I'll talk a little bit about that more in the next slide - next couple of slides. But that commonality is key to the affordability aspect of the program.

This slide is a good representation of that commonality. We intend to build the Joint Strike Fighter on a single production line. As the aircraft moves through the various phases of production, the various unique aspects from the three variants will be rolled in.

What you'll see in the indent is about an 80% across- the-board commonality between the three variants. To build to that 80% commonality, you will have 100% commonality in the core engine. There'll be 100% commonality in the mission systems. In the software, the software load will be the same software load for all three variants.
And we see this again - that common production line - another key component of achieving that affordability, which is a fundamental pillar of Joint Strike Fighter.

Why are we doing JSF? Well, first of all it's replacing an ageing inventory. We have F-16s, F-18s that are coming near to the end of their life and we had to make some decisions to replace that inventory. We also have that old inventory, even if we could continue the life on it, it's becoming very expensive to maintain.
Yes, we're still selling F-16s and F-18s, and there's been a lot of reliability improvement efforts and maintainability improvement efforts that have been rolled into those airframes. But this gives us an opportunity, from ground up to design, in that maintainability and reliability that we need to have an affordable system.

Also the bottom line is to be able to counter the advancing threat in 2010 and beyond.

Here you can just see a little bit of comparison between the F-16 and the CTOL version there. What's different about the JSF? Well, we basically see everything as being different. Performance. I said it's an F-16 of F-18 or better type of aerodynamic performance. So it doesn't give ground in that area. The F-16 probably the world standard in fighter aircraft.

Lethality, survivability and supportability. Other key aspects of the Joint Strike Fighter program. All of those underpinning our fundamental pillar of affordability.

I'm going to talk a little bit about what we call KPPs, or Key Performance Parameters. The key performance parameters on a program are those requirements that are the make or break on a program.
You miss a KPP and your program is subject to cancellation or major rework. We don't intend for that to happen. And, as you can see at the bottom of the bumper sticker, it's projected to meet or exceed all of the requirements. What a focus you see here in purple. Those KPPs are common against all of the variants.

The other key aspect I'd like to bring out is out of the six common KPPs, three of them - sortie generation, logistics footprint and mission reliability - all speak to that supportability of the Joint Strike Fighter. That's very unique in a program right up front. We are giving emphasis to the long-term total ownership cost of this air system.

Another critical key performance parameter is interoperability. We intend to fight with this aircraft in coalition warfare. We intend to be able to operate with all the other systems out there, both ground systems and air systems. So interoperability is a very key component to the Joint Strike Fighter.

Of course there are two unique KPPs. One for the STOVL mission that's unique to the STOVL performance - short take off distance and vertical lift bring back. And then for the CV, the Navy variant, that maximum approach speed. That's that low approach speed onto the carrier deck for carrier operations.

Now, in addition to the aeroplane itself, we're not just building an aeroplane. We're building an air weapons system and that system includes that support system behind it. What we call the autonomic logistic system.
What we mean by autonomic logistics is autonomic. Is like those automatic body functions. You know, your heart beats. It's an automatic function. Well, we want to be able to have happen.

On board the aircraft we have what's called prognostic and health management systems that are constantly monitoring the engine performance, various mission system performances, and are able to data link back to the base, download that information. That will allow, say on the last 30 to 45 minutes of a mission as the aircraft is returning, it will be able to dump all that data back to the base.
The information will go in, it'll go to flight ops. They'll be able to determine what it's going to take to be able to turn that mission around, to be able to make the decision, say, if it's a carrier-based JSF and it needs to do an engine swap out, they can get the right placement on the carrier for it to be able to do that engine swap out. They can start making those decisions then.

Munitions requirements. If there is going to be a degradation in a weapons system they can make a determination. Well, can it go back in a weapon package as is? Or does something need to be fixed? In addition that information will flow back to the training house and continue to update the training requirements back at the schoolhouse for flow. It will go back into the depots and back into industry to allow the spares reprovisioning.

So constantly based off with the performance of that aircraft will constantly be feeding back into the information - the autonomic logistic information system to ensure that we have a supportable system.

How did we get here? Well, we just finished up a previous phase that was called concept demonstration phase - CDP. And that, of course, is the phase where we had the competition between - you know, ended up being between Boeing and Lockheed Martin. It was a winner take all competition. That's where the concept demonstrators were built and flown during that competition.

There was a requirement for each contractor to build two aircraft but to demonstrate three variants. So they took one of the aeroplanes and turned it into the other variant, which demonstrates commonality for one thing.

But during that CDP phase, a significant achievement - and one that they didn't really think we would ever be able to do - was to be able to get a joint operational requirements document signed by all three of the services: the Air Force, Marine Corp and the Navy. And also the United Kingdom signed the document.

And we did that through a process that took about five years, multiple iterations, going through and weighing the operator's requirements, finding out what the cost associated with the different requirements were, feeding that back to the operational community and letting them make the decisions, what we call CAIV, cost as an independent variable, being able to make the trade-offs that would give them the affordable, but mission-capable fighter that they needed.
The bottom line on affordability is that it's not affordable if it doesn't meet the operational requirements that the war fighter needs. So that's the standard and that's where we go back to at least performance at least as good as an F-16 or F-18.

So through those iterations, we were able to get a joint operational requirements document signed. Of course then the concept demonstration phase flight testing was completed. Lockheed Martin was down-selected as the winner out of the CDP phase. During the CDP phase we also did what was called technology maturation program. Now where we took a look at these areas, structures and materials, flight systems, manufacturing and production, mission systems, supportability and propulsion.

And we put a lot of effort and a lot of money. Frankly it cost them about $7 billion between the government investment and the investments by the two competitors into technical, technology maturation, to ensure that when we went into the SDD phase, the current phase that we're in now, the system development and demonstration phase, that we were going in with low risk in those technology areas - get these birds flying a little bit, they always look a little better if they're flying, instead of a still picture.

During the flight test program, we collected over 700 test points, the X-35A, the air force variant, that was the first to fly, they flew 27 flights in their program in about a month's time. Multiple pilots flew the aircraft, met all of its test points. After it was done with its testing out at Pondell [phonetic] on the high California desert, Lockheed took that aircraft and converted it into the STOVL variant, the short take-off and vertical landing variant. About 37 days later it came out as a short take-off vertical landing aircraft and did its testing out at Pondell base.
The CV variant, the carrier variant, did initial testing out at Pondell, then flew out to Packs [phonetic] River, the Navy's test facility in Maryland, and conducted all of its carrier-handling qualities testing there.

Some of the comments, F-18 pilot comment on the handling characteristics of that CV-variant was that it was ready to go to the fleet. Great handling characteristics, better than the F-18 which is the standard for carrier-handling. And we'll just let this finish as you see the STOVL touching down in its vertical landing.

One of the great aspects of that test program too was it was the first time that a vertical, short take-off vertical landing aircraft was able to do a short take-off supersonic dash, level dash, and then a vertical level, all in a single flight.
Taking a little bit deeper look at that system at maturity and the technology maturation effort that we did, I just want to highlight a couple of the areas that we focussed on - of course we just looked at the hi-fidelity demonstration aircraft. One of the key objectives of the flight demonstrators was to be able to be able to make sure that the modelling and simulation that we had done, as far as the aerodynamic handling qualities, matched what the actual performance was.
And so, you know, we modelled the aerodynamic performance and then by going out and flying it, we were able to see that there was indeed almost within, I don't know, three per cent match of that. And so what that does, is that gives us a great credible, confidence, that in this phase as we have to make changes in different aerodynamic features, or whatever, we'll know what the result is result is, that if we have to change a surface area, or an algerithym or something, we know what the results going to be. So that helps us keep the risk down in the program.
Another area that we worked on hard, was the low- observable area. We built a full-scale pole model. That in itself is not unique, we know how to do that, but doing it that early in the program - in the F-22 they did that two years into the phase we're in now - in this phase we've already accomplished that.

One of the things that we really stressed there, was not only having, being able to ascertain the low- observable characteristics of the aircraft, but maybe more importantly, was to make sure that the low- observable characteristics are supportable - out in the field that when there is danger, or when you have to do a maintenance action, that you can indeed fix the aircraft and maintain the low- observable characteristics. And also that every time you have to do a routine maintenance that you're not hurting the low observable characteristics, and so we're able to drive down the maintenance man hours per flight hour that historically when you look at the B-2 or the F-117, it's been a challenge, those are high hour requirements for maintenance. JSF, we've driven that down to make it supportable out in the field.

We also, through a flying test bad, [phonetic] were able to test out all the major sensors that will be on joint strike fighter, we know that those concepts will work. The challenge that we have ahead of us in SDD is to fuse all of that information together now, for the pilot.

Okay, where are we today? Okay, where we are today, is in the system development demonstration phase. On October 26 of '01, we awarded the contract SDD started here. We've been working hard, lots of things, lots of things to do in between these major milestones here, but our next major milestone is preliminary design review, March of '03. We're already doing sub-system preliminary design reviews right now on critical systems.

You'll see first flight, which is 48 months into the program, so it's a little, about three years away right now. And then we have initial operation capability - for the US Marine Corps in 2010, Air Force in 2011 and the Navy in 2012.

The thing I wanted to draw your attention to on this slide is the block approach that we have with JSF. We call this spiral development. Block 1 capability will give to the war fighter a basic war fighting capability. It'll be certified with JDAM [phonetic] and A-120s on board. That is a no-kidding, go-to-war capability right there. But what we will do, as we move through the SDD program, which is about ten and a half years, we will roll-in Block 2 capability which will be more the mission software, and more the weapons-certified, and then Block 3 capability will have 100 per cent of the mission software, all the hardware certified, the munitions certified, and that will represent fulfilment of the order requirement. Of course we will plan in the future to probably add on Block 4 and Block 5, as technologies advance.

I'll talk a little bit about the SDD acquisition strategy. It was a winner-take-all competition. Lockheed Martin 1, they of course are the single prime for the airframe avionics training and support for the joint strike fighter. Alongside of that we have government-furnished equipment, the engine, the propulsion is being done by Pratt-Whitney and General Electric. And I'll talk a little bit more about this interchangeable engine program in just a moment.

A quick overview of the contracts. They're cost plus award fee contracts with performance-based specifications. We didn't tell them how to do the function. We told them what we wanted it to achieve, okay? What the - the operational capability that was needed. And so they're based on a performance-based specification. It was an $18.9 billion award. Last October Pratt and Whitney, who has a lead on the engine development, $4.8 billion. The engine by the way is a derivative of the F-119 engine which is used in the F-22, so frankly every time the F-22 is collecting hours or going through tests, that is further maturation for our engine on the JSF. It is now designated the F-135 on the JSF, on the F-35.

General Electric is in a follower-type arrangement right now behind Pratt and Whitney, that's why that's a $411 million, what we call pre-SDD contract. Later that will be increased and they will go head-to-head, toe-to-toe with Pratt and Whitney in competitions on the engines.

Take a little bit of a look at the structure of the aircraft. You can see a great similarity between the aeroplanes. You can see here the CTOL variant and the STOVL variant, basically the area behind the cockpit here where the lift fan and the shaft drive that provides the vertical lift, the short take-off capability for the STOVL variant, that is replaced with a fuel capacity for the CTOL aircraft, so the CTOL has a little bit better range than the STOVL, the STOVL still has significant range.

One thing that I didn't talk about earlier, and I think it was on the earlier chart about the fuel capacities, is that because this is a stealth aircraft it has internal weapon bays and to make it stealth the weapons have to be internal in a low-observable mode, so that makes the plane pretty thick and so that gives you a lot of room for fuel. So these aircraft have tremendous range.

The CV variant is outward to almost 700 - is that correct Wheaty, 700?, 700, yes 700-plus nautical miles, the Air Force I think about 590, oh almost 700 as well, I'm sorry. So very significant range. That's no external fuel tanks, just the internal mission fuel. Oh, here we are [laughs] it's right down here. To give you an idea of the internal fuels - 18,000-plus for the CTOL, 13,000 for the STOVL and over 19,000 pounds for the CV aircraft. And you see the wingspan on the CV is 43 feet, compared to the 35 of the two other birds. You see it overlaid over the F-16, the AV-8 and the F-18.

It's a little bit - I said this is a stealth aircraft, so I'll talk a little bit about the survivorbility and the signature features of the aeroplane. The bottom line is that from ground up, stealth was built into this aircraft. You have all the, from every, from all aspects it's stealth. I talked about the maintainable low-observable, being able to have quick access doors and door stills, so that when you do those routine maintenance that you don't impact the stealth characteristics of the aircraft and other various - the Plan 4 align features that, the wing tail sweep, surface features and so forth that are critical to signature, lower [indistinct] the signature.

I'll talk a little bit about the contract or team. The competition was won by Lockheed Martin as the lead. They're the prime contract and their partners are BAE Systems and Norfolk Rummond. You can see here from this picture kind of the break-out that they intend for the aircraft, and of course both of these companies will be subbing to other suppliers.

I'll talk a little bit more about that engine in or changeability, the Pratt Whitney and GE Contracts. What we're talking about here is physically and functionally interchangeable engines. Today, when you buy an F-16, you're able to pick a Pratt and Whitney or a GE engine. But then you are stuck with the support in that decision. You're going to fly Pratt and Whitney in that bird forever.

What you have in JSF is true interchangeability. If your country, for example, decided to buy a joint strike fighter with Pratt and Whitney engines and then went to a coalition operation fore-deployed somewhere and there were only GE engines there, and they needed a new engine, a Pratt and Whitney engine can be pulled out. The GE could be put in to the aircraft. The software load is the same. The airplane recognises that. So all the hardware and software interfaces are all the same, including not only the interface into the aircraft, but also the supportability. So the mechanics can switch out those engines. It'd be the same tooling to switch out the engines and so forth. So the support piece of that is also interchangeable.

Of course the benefit that we see in this is that later on we will be able to compete these two companies and keep the engine on a performance and cost improvement curve through competition.

Want to just now focus back a little bit on that vertical, short take-off and vertical landing system. This past year we were announced as the winner of the 2001 Collier Trophy. That's for the most significant improvement in aerospace, a significant contribution to aerospace. And the team, the joint government and contractor team won that award for the unique vertical lift system, integrated lift system for the STOVL Variant.

Back to the master schedule a little bit. This is a little bit more detail but what I wanted to pull out of this schedule for you is that, while this ten and a half year SDD program is going on, we're going to be also putting out quite a few aircraft. We'll be doing what's called low rate initial production. In these low rate initial production lots, we will be putting out about 465 airplanes. So that's in addition to the 24 aircraft that we'll be building under the SDD program.
That represents as industry relationships are set up in SDD for the development portion of it, a lot of those relationships will flow into and actually you know they'll be bending metal for those L rep [phonetic]aircraft long before we get done with the SDD program.

So who gets it? As you can see, our partners that we have right now - Canada, Norway, UK, Denmark, Netherlands, Turkey and Italy. Those are our current co-operative partners that we have signed MOUs with. Right now these are the quantities that we're looking at for the US Air Force's 1763 aircraft; the Marine Corps 609; the Navy 480, and when you add that with the 150 that the UK, the United Kingdom, has said that they want to purchase, that comes out to 3,002 airplanes.

What I'd like to really emphasise here is that the 3,002 airplanes is what all of our resource, our budgeting, our planning is all based on. We took no credit in our cost-projections for any additional international sales. So by virtue of that our numbers for you know recurring fly-away and production costs are conservative. We estimate - actually three different studies have estimated that there's anywhere between 2,000 and 3,000 additional aircraft over that 3,002. Obviously the aircraft that our partners are projected to buy, those would be part of that greater than 2,000 number.

So we feel very confident in our cost projections and our budgeting for the SDD program. This gives you an idea also of some of the airplanes. For example in the Air Force, the JSF will be replacing the F-16 and A-10 and it will intend to complement the F-22 in its high-low mix role. Of course for the Marine Corps it will replace the Harrier and the F-18C.

This just kind of goes through the status of the agreement. You can see where the different countries came out as far as levels of partnership. The United Kingdom at level one; Italy and Netherlands at level two; the rest at level three; and of course we are currently under negotiations with Australia at a level three partnership.
I'll talk a little bit about the partnership, some sells. Level one, we only have one, the United Kingdom. Their contribution was 2 billion. They have ten people in the program office. And just to talk a little bit about the co-operative partnership, what we have is we have our international partners are totally integrated in our integrated product teams, in the program office. We have from the United Kingdom, for example, as the national deputy that is in the program office also serves at a director level. He's the deputy director of our systems engineering directorate.

Each of the level threes, they have a national deputy and they serve on the C4I integrated product team that is part of our systems engineering. So the international partners, they're bringing to bear individuals into the program office that are filling no-kidding, real positions that we would normally be filling with either a Air Force, Navy or Marine Corps military or civilian personnel. So we feel that it is very, very important and we are getting some great expertise from our partner nations into the program office.

The partnership opportunity closed on the 15th July. Of course in June Australia asked to proceed with negotiations. So they're the last country that are, so to speak, in the door for partnership.

Security co-operation participant: That's kind of the next step. It's a kind of a hybrid of four military cell. We have a lot of countries that want to be, say, involved - they want to be involved. They want to be involved. They want to be informed about the joint Strike Fighter, so we are setting up this program to more or less build a more informed customer. But they won't have the benefits that a partnership will have. They won't have the emphasis on the industrial relationship. They won't have the people integrated in the program office and they therefore don't have the influence over the core project. All the money from the partner nations goes in to the common pool along with the US Government funding to fund the core project.

And the last block there I'd like to talk about industry to industry is the fact that those industrial relationships are developed between Lockheed Martin and their suppliers and their partners and the foreign companies of our partnership nations.
A little bit on the structure of our agreement. We have a common core Memorandum of Understanding or what we call the Framework MOU that was signed and negotiated with the United Kingdom first. All other countries sign that MOU and then they have their particular benefits or relationship are outlined in the supplementals agreements, depending on their partnership level.

This chart just shows you the progression of how we built the partnerships through the Joint Strike Fighter phases. In the last phase we had four levels of participation. It was an open invitation. In this phase, we have three levels of partnership and that was by written invitation only. We vetted those. We decided on who would be desirable partners. We sent out invitations back in a '99 timeframe.
Then as I've already spoke to, there will be an effemess [phonetic] component which we're calling Security Co-operation Participant. And of course it will move in to the next phase, production phase, and will be available through either co-operative production, MOU agreement, or through FMS and of course a third way that you could buy the aircraft is direct commercial sell but right now we don't think it will be available for direct commercial sell. At least that's the feeling at the time.
We feel that JSF enhances international co-operation. We see it as a method for meaningful, long-term international industrial co-operation. One of the benefits that we see in the stability that we see in the program is that all the countries become equity shareholders in the program.

We see foreign industries, opportunities enhanced because they are able to join in on the development and the production of nominally a 5,000 to 6,000 airplane fleet production run and all the associated technology transfer that may go with that gives us an opportunity to exploit the competitive worldwide supplier base so we can find those best value solutions so we can assure that we have that affordable, sustainable weapons system.

And we see it as ensuring the long term sustainability of both American and partner Defence Industries.

Just in summary, we have completed our concept demonstration phase. We matured our technologies and entered into SDD at low risk. We have awarded the system development demonstration contracts. We've completed what we called Air Systems Requirements Review back in January of this year. That's where we go through and captured all the requirements that they've been flowed down through the contract.
We've completed our integrated baseline review in April which is where we make, work the government reviewing the contractors schedule and resource management, making sure that they have the proper resources dollars and schedule manpower associated with the various work packages to support the schedule and the statement of work that represents the SDD contract.

Pratt and Whitney has already completed. NG have completed their preliminary design reviews for their engines. The engine development is about a year ahead since it is a government-furnished engine to the current Lockheed Martin to integrate. We've completed air vehicle lines freeze. Only eight months into the program, we've actually locked down the dimensions, the lines of the aircraft. One of the reasons we were able to do that is because of all that significant effort that we did in CDP phase and the fact that the performance was such that we had to make very, very minor changes in the overall lines of the aircraft.
All our international co-operatives are signed up, save one. And we hope to take care of that soon, as Vice Marshal Conroy mentioned. And one of our goals, one of our sayings in the program office is 'every wicket, every day'. There's a lot of little things that have to be done. There's a lot of challenges ahead but we just keep marching along and keep knocking those out, and we will be successful through performance, teamwork, and process discipline.

And that concludes my briefing. So I think now we're going to have some folks come up here and we will stand by to field some questions.