Point Luck: Def-Min- If F-35 costs blow out, Australia can leave the program.

Australian Defence Minister Johnston was on a radio show to explain F-35 progress. (transcript below).

Not much of what he said is true. Either he is being poorly advised, or he is engaging in misleading the nation. As an aside, his history on Defence topics could be summed up by, "if it is expensive, it must be good.". Fact free analysis. For example, he wants the P-8A and Triton surveillance aircraft but both are immature and expensive. The entrenched Defence bureaucracy has a large history of getting it wrong, leaving a very small population of tax payers, to fund multi-billion dollar mistakes.

Again and again. The Australian public is stuck on the wrong end of an abusive relationship.

Johnston claims that the F-35 is "fifth generation" and by this alone it will defeat anything. Not true.

He claims that 4000 F-35's will be built. No proof.

He states that costs are coming down on the program. Fairy dust. Since the F-35 development is so immature and troubled, there are a forest of billion-dollar fixes waiting.

He claims that there are 19 million lines of software code for the F-35 and this is .... wait for it... an advantage.

He states all of the industry/workshare talking points...

From about the year 2002 when Australia foolishly signed up for the program.

“It will affordable because already there are 3,000 aircraft on the order books.”
—27 June 2002, Air Marshal Houston, Defence press announcement, Australia joins the F-35 program—

The billions in Australian work-share Johnston has claimed have turned into a loss leader. This from 2010:

O'Donnell cited one family-owned business, Production Parts Pty in Australia, which made "a substantial investment because they expected production volumes to be twice what they are today." Production Parts itself, he added, has enough other business to keep going, but others are not so well off.

Within 2 years, Production Parts went out of business. Why? Lack of F-35 orders. Why? Because no one wanted to buy lots of mistake jets.

Here is what we were told in 2003 about the F-35s' future success.

(click image to make larger)

That is a lot of lost money because of hundreds of jet orders that didn't happen.

Johnston states that if there are cost blow outs, that Australia can leave the program. I suggest that we are already there:

“It’s about $37 million for the CTOL aircraft, which is the air force variant.”
- Colonel Dwyer Dennis, U.S. JSF Program Office brief to Australian journalists, 2002-

". . . US$40 million dollars . . "
-Senate Estimates/Media Air Commodore John Harvey, AM Angus Houston, Mr Mick Roche, USDM, 2003-

" . . US$45 million in 2002 dollars . ."
-JSCFADT/Senate Estimates, Air Commodore John Harvey, Mr Mick Roche, USDM, 2003/2004-

". . average unit recurring flyaway cost of the JSF will be around US$48 million, in 2002 dollars . . "
-Senate Estimates/Press Club Briefing, Air Commodore John Harvey, 2006

". . the JSF Price (for Australia) - US$55 million average for our aircraft . . in 2006 dollars . ."
-Senate Estimates/Media AVM John Harvey ACM Angus Houston, Nov. 2006-

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Johnston's radio show transcript below.

TRANSCRIPT

CHRIS UHLMANN: The plan to buy these jets has been in the pipeline for more than a decade and supported by Coalition and Labor Governments.

The man who will usher in the next phase is David Johnston, the Federal Defence Minister.

David Johnston, why does Australia need these jets?

DAVID JOHNSTON: Well, fifth-generation technology means that the aircraft have a specific sense of capability that puts them clearly above anything else in terms of air combat capability or other jet fighters, to use the common parlance.

Now, the aircraft has a whole host of technological advances that any potential adversary that we might face in the next 30 to 40 years I don't think has any opportunity to match, particularly in the medium term.

So 19 million lines of computing power on each aircraft. A Collins Class submarine has six million lines of code. So we're talking about a highly advanced technological stealth weapon that can sense an adversary at a long, long range off and provide Australia with cutting-edge capability in terms of national defence.

CHRIS UHLMANN: And what you talk about at this stage in some cases is experimental. So when will these planes be combat ready?

DAVID JOHNSTON: Well, they're very, very close. Now 14 have been deployed to the Marines in Yuma in Arizona. There's 93 aircraft currently flying and they've done more than 14,000 hours. They've successfully fired a number of ranges of weapons.

They're landing on helicopter dock ships at the moment. So that's the STOVL (short take-off/vertical landing) version and the United Kingdom is getting the STOVL version. So the aircraft - we're getting the A version, which is the standard take-off/landing hard strip version - the aircraft is well advanced.

But it's a totally different and new concept that is concurrently being developed with its deployment into service. Now, this has not happened before. And I think given the technical risks surrounding such a complex program, I think it is actually going very, very well.

CHRIS UHLMANN: There are technical risks. There are also cost risks. You're billing this cost at $12.4 billion. Is it possible that cost might rise, particularly if other countries don't take up their orders for planes?

DAVID JOHNSTON: Well, low rate of initial production six, which contains our aircraft and low-rate LRIP (low-rate initial production) seven has seen a 4 per cent reduction in costs so that the cost schedule equation in terms of a graph is headed in the right direction from Australia's point of view.

And I'm very optimistic that we are seeing as these aircraft develop - and bear in mind we're looking to see probably around 4,000 of them manufactured for the 11 countries that are participating in the program - I'm looking to see the price come down over time.

Now we will place an order hopefully this year for a further eight but we will have three combat-ready squadrons by 2023 and one training squadron stood up. We'll have our first squadron standing up by 2020 and I expect the costs to be continuing to head in the right direction from an Australian perspective.

CHRIS UHLMANN: Well, you talked about 19 million lines of software code. That's extraordinarily sophisticated and, as I said, experimental. What happens if the cost does blow out? Who pays for delays or mistakes: the contractor or Australia?

DAVID JOHNSTON: Well, the situation is this: if Australia decides that the costs have blown out to such an extent, we are not bound to continue. We are committed to the program. Every indicator at the moment indicates that the costs are headed in the right direction for us so I'm not anticipating any drama, but should there be a major turnaround in cost then, you know, the option is available for us to leave the program.

Now, I don't want to do that because this aircraft is simply the best thing happening in air combat at the moment. I think, given the 11 countries that are committed to it, all of whom are our friends, I think the costs will continue to come down.

CHRIS UHLMANN: What about skills and technology transfer? Of course, this plane is being built in the United States at the moment, but what are the benefits for Australian defence industry?

DAVID JOHNSTON: Well, currently there are more than 30 companies in Australia that are benefiting from the Joint Strike Fighter program. Now, most of those companies are in Victoria. There is more than $330 million worth of work currently on the table.

I anticipate within the next little while, maybe the next three to four years, there'll be more than $1.5 billion worth of work for Australian skills and technical manufacturers. We already manufacture the tailplane and a whole host of other accessories for the aircraft.

Now, there is a total up for grabs of more than $7.5 billion. I expect Australian companies to be getting a very significant slice of that action and I will certainly be working with Lockheed Martin and the United States government to see that this commitment rewards Australian industry who have had a bit of a rough time of it lately, defence industry. And we want to see a significant slice of the action coming to those companies.

Now, I want to say that I think this announcement gives them greater confidence, gives them a bit of a fillip as to the good work that they've done so far. And we want to see them continue to win more and more of this work.

CHRIS UHLMANN: The Defence Minister David Johnston.