Canada Investing in F-35 Related R&D
The F-35 Lightning II Joint Strike Fighter is at least as much an industrial program as it is a fighter aircraft. The commitment stages involved have been carefully designed on all fronts, from the conflating of USMC, Navy, and Air force roles, to the 3-stage industrial commitment process by program member nations, which see the JSF as the only major industrial opportunity for fighter aircraft over the next 20 years. As articles like Bill Sweetman’s “JSF Office Makes Buyers an Offer They Cannot Refuse” explain, the F-35’s seeming inevitability as a major aerospace procurement program is critical to its success. Hence the recent discussions about capping prices far below the normal high cost of low-rate initial production aircraft, in exchange for sharp financial penalties to countries who buy less than their committed number.
Recent events in Canada illustrate another aspect of the F-35’s industrial strategy: its invitation to promote and fund specialized industrial competencies that can be applied elsewhere in the aerospace sector.
Canada is a minor tier 3 partner in the JSF, and companies like Magellan Aerospace (F135 titanium front fan frames, horizontal tail), Avcorp (F-35C outboard wing work), et. al. are participating as sub-contractors to larger firms like Northrop Grumman, Pratt & Whitney, et. al.
As a supplement to Canada’s existing financial commitment, Industry Canada is supporting a C$120 million project by Magellan Aerospace Ltd. division Bristol Aerospace, aims to establish a center of excellence for aerospace composite manufacturing in Winnipeg, Manitoba. Government support involves a repayable C$ 43.4 million investment towards the Composites Innovation Centre project, which aims to develop new processes for composite manufacturing and complex assemblies that incorporate both composite and metallic components.
Based on current estimates for the scope of the JSF program and the status of its discussions with Lockheed Martin and BAE Systems, Magellan management estimates that the scope for deliveries over the next 25-30 years could be worth up to USD $3 billion, with annual revenues of up to $120 million per year once F-35 full rate production is achieved.
Large firms like GKN are already doing this kind of R&D, of course, and Canadian firms need to keep up in order to remain competitive. Projects like the F-35 offer a revenue stream that’s large enough to finance this sort of R&D effort in member countries, which then hope to leverage the investment into other work for global aerospace players.
A second, smaller investment is being made via a $4.6 million loan to Integran Technologies Inc. in Toronto, to help develop a hard metal coating called Nanovate NV (Nanovar). The nanotechnology coating will be applied to carbon fiber reinforced plastic (CFRP) composite tooling, in order to improve tool lifespan, durability, and hence costs. Integran will collaborate with University of Toronto graduate students on this project.
Both investments are being made through investment is being made through a program run by Industry Canada’s Industrial Technologies Office, called the Strategic Aerospace and Defence Initiative (SADI).
All projections for returns assume a full production run for the JSF, of course and so the investment locks in the above firms as strong lobbyist for the F-35 project in Canada. The government is also aware that its loans may not be repaid if Canada should bow out of the program in favor of a rival, and the firms in question lose their contracts and the expected jobs that go with them. This raises the bar for potential competitors, such as the JAS-39 Gripen. Industry Canada CIC release | Industry Canada Nanotech release | Magellan Aerospace release.