Lockheed Martin F-35 Fighter Poised To Become One Of America’s Biggest Exports

BY: Loren Thompson May 29, 2018 via Forbes

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Lockheed Martin F-35 Fighter Poised To Become One Of America’s Biggest Exports

{More bang for the bucks. – LS}

The Pentagon’s F-35 fighter has completed its development program and begun deploying overseas. About 300 have been delivered, and that number will double by the end of 2020. The U.S. military plans to buy 2,443 of the stealthy aircraft in three distinct variants tailored to the needs of the Air Force, Navy and Marine Corps.

To date, public discussion of F-35 has focused mainly on what the fighter can do for U.S. warfighters, and at what cost. But there is another dimension to the F-35 story, and that is the positive impact the plane will have on America’s trade balance as overseas friends and allies acquire well over a thousand of the fighters, mainly to replace aging F-16s bought during the Cold War.

The F-35 program from its inception has had eight partner countries that helped pay for its development and now are poised to purchase over 600 of the planes. But that is just the beginning of the program’s trade impact. An additional 800 planes are expected to be bought by other countries through the Foreign Military Sales program. That process has already begun, with Israel, Japan and South Korea signing on before development was even completed.

Other potential customers currently include Belgium, Finland, Germany, Singapore, Spain, Switzerland and the United Arab Emirates. Over the longer term, virtually every military power that might one day need to contemplate coalition warfare with America will want to take a look, because (1) no other tactical aircraft will be as survivable, (2) no other tactical aircraft will be as versatile, (3) no other tactical aircraft will be as cost-effective, and (4) no other tactical aircraft will mesh as seamlessly with U.S. air power.

I suppose this would be a good point at which to note that F-35 prime contractor Lockheed Martin is both a contributor to my think tank and a consulting client. If I had made the above four claims a few years ago, you might rightly have questioned my objectivity. But not now. After 9,000 flight tests, F-35 has demonstrated all of the performance features expected of it, including the ability to avoid being tracked by Chinese and Russian air defenses.

In addition, the price has fallen to a level where the most common variant will soon cost no more than the latest F-16 — for a great deal more capability. For instance, the electronic warfare suite on F-35 will generate ten times more radiated power than previous fighters, meaning it will not need a jamming aircraft flying escort in order to safely penetrate hostile air space. Every military power within a thousand miles of Russia or China is likely to want that, because when combined with low observables (“stealth”) it makes F-35 unstoppable.

What could be a more credible deterrent than a supersonic (1,200 mph) strike aircraft that can’t be tracked by radar and yet can strike ground targets with pinpoint accuracy and see air targets hundreds of miles away? As if all that were not enough, neither Russia nor China are likely to have anything comparable until the 2030s — if then. Bottom line: F-35 is setting the global standard for tactical air power through mid-century, and overseas sales of the plane will deliver a powerful boost to America’s trade balance.

So how big might that boost be? I’m guessing that over the long run, it will approach a trillion dollars. For starters, if we assign a nominal price of $100 million per plane — which is close to what the most common, Air Force variant costs today — then the value of the 1,500 or so planes Lockheed currently expects to sell overseas is $150 billion. But that doesn’t include life-cycle support and services, which typically cost more than the initial purchase price over decades of operation.

Lockheed has incorporated various “sustainment” features into the F-35 design that will make it easier to maintain than legacy fighters, and more are coming. On the other hand, threats are changing so rapidly that F-35s will likely require frequent software upgrades and periodic hardware modifications across a service life stretching to 2070. Add in the government’s inflation projections across the same timespan, and the export value of the program as currently baselined is already pushing half a trillion “then-year” dollars.

Of course, if inflation were to spike at some point during this period — which it almost certainly will — then the nominal value of the program will too. Let’s leave that possibility out of the estimate since it is incalculable. But let’s not omit the likelihood of multiple wars that stimulate demand, or the need to replace planes lost in combat and training, or the new requirements that might emerge when F-35 pilots find themselves fighting novel challenges such as supersonic drones.

Let’s also bear in mind that F-35 has never lost an overseas competition in which it was entered. Avascent reported last year that over 50 competitions were under way around the world for new tactical aircraft, although less than half had been disclosed publicly. But as geopolitical developments unfold, Washington may decide it needs to sell F-35s to India, Indonesia, Saudi Arabia and other countries not currently on the short list of prospective buyers.

That doesn’t mean India can’t produce and export F-16s to countries unable or unwilling to buy F-35s (as it is currently contemplating), but India may decide it needs a “high-low mix” of fighters to deal with threats emanating from China or other neighbors. With Washington deeply valuing its strategic ties to New Delhi and F-35 poised to become the global standard for multi-role tactical aircraft, it’s easy to imagine India buying over a hundred eventually. Other customers no one is talking about today might too.

Finally, let’s keep in mind that the F-35’s arrival has dovetailed nicely with a wholesale revision of U.S. arms transfer policy by the Trump administration. The president signed a memorandum on April 19 streamlining the sale of weapons to other countries and committing the government to participating in the overseas promotion of U.S. military products. Trump rightly noted in the memorandum the multiple ways in which such sales stimulate the U.S. technology and industrial base.

That policy isn’t likely to change once Trump leaves office, because Americans would dearly like their allies to take on more of the burden of collective defense. Countries like Germany can show their commitment to shared security objectives while better defending themselves and reducing trade imbalances by buying the F-35. I won’t waste your time with conjectural calculations about how all these factors might combine to make F-35 America’s first weapons program to generate a trillion dollars in export earnings, but it’s probably going to happen.

 

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2 Comments on “Lockheed Martin F-35 Fighter Poised To Become One Of America’s Biggest Exports”

  1. wingate Says:

    Why buying expensive planes if your gov. ( like the israeli gov. ) is
    playing around with those who want to wipe you out ?

    You dont need to spend billions to play around with your enemies / making hot air, like the israeli gov. is doing….

    If your gov. wants to drive your nation to the wall – do it the cheap way / dont spend billions for an army which is not used to destroy
    your enemies !!!

    Be smarter than the israeli gov. !!!!

    What a disgraceful / dangerous shame for Israel !

    The iranian medieval nazi rulers cant sleep tonight – they are laughing their heads off…..

    What a shame for Israel !


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