F-35 Industrial Base Relies On International Participation

By Edward Lundquist

The F-35 Lightning II joint strike fighter has become a model for international cooperation.

According to Aerospace Industries Association’s Remy Nathan, who runs AIA’s international trade division, aerospace is a global industry and an increasingly competitive international marketplace and is becoming more so all the time.

That international competition is a good thing, broadening the market that may offer new, better or different products.  “We can tap into the best technologies at the best possible price,” Nathan says. “Our warfighters and customers worldwide benefit.”

There has been an emphasis of security cooperation and building partnerships, especially in the post-9/11 environment.  “There is international content in every single defense platform,” Nathan says. 

There is a direct relationship between having foreign customers for your products, to include major systems like the F-35, and having foreign content.  “It can be a discriminator,” Nathan says. 

In an average program, a country buys the airplane and they have either a policy or law that stipulates some percentage of the purchase price of that airplane has to be offset back in the purchasing country.  Countries can spend literally billions of dollars buying the weapons system, and most of them are looking for some economic return for that large an outflow of cash.  So many programs require “offsets.”

Offsets come in two forms — direct and indirect — direct meaning equipment that is installed on the airplane weapons system, and indirect being anything that stimulates their economy that may not be related to the purchase of that weapon system. 

Some offset programs require investment, and some just include foreign content. The more flexibility the better.  “It can be a challenge to discharge offset obligations and have a value in the foreign buying country.  But it behooves both sides of the transaction that they succeed,” according to Nathan.

Despite offset obligations, every supplier has to meet a high standard. “A customer may want to provide content, but the prime also has an obligation to that buyer and every other buyer to provide the best aircraft at the best price,” Nathan says.

 “A program of the magnitude of the F-35 is all about partnerships,” says Steve Over, Lockheed Martin’s director of F-35 international business development.

“It starts off first at the government-to-government level, because the F-35 is a tool of U.S. foreign policy and developing stronger relationships with all these international partners around the world,” Over says.  “And it’s about building coalition capacity, where the U.S. is providing the absolute best, state-of-the-art, 5th-generation fighter technology to partner nations that someday in the future they anticipate going into combat with against the forces of evil.  As they look forward 10 years from now, 15 years from now, 20 or even 30 years from now, these international partners have the capacity to go to war with the United States.”

There are currently no offsets with any of the partner countries purchasing the F-35, but industries in the countries that are buying the airplane have been given an opportunity to participate in its global supply chain, he adds.

For Denmark’s Terma A/S, participation in the F-35 program is critical to the company today and for the future. Terma is providing composite components to Northrop Grumman, which is responsible for the center fuselage; Marvin Engineering, which is making the missile pylons; and General Dynamics Ordnance and Tactical Systems, which is building the gun pod. Terma is also providing the horizontal tail leading edge and the data acquisition, recording and telemetry pod directly to Lockheed Martin.

Over says Denmark and Terma are good examples of the F-35 global supply chain.  “Terma had to compete against U.S. and other countries’ providers of equipment.  In each of these competitions, the selection was based on a cost/value basis, meaning that their prices and the equipment that they operate is a best value to the overall F-35 supply chain.”

But in order for industrial partners like Terma to have the opportunity to supply parts for the entire program of record, that that supplier has to continue to maintain best value, Over says.  “So it’s not a birthright, but as long as they are doing what they need to help us bring the price of the airplane down and maintain competitive pricing, there is no reason those companies won’t be supplying that part for [the] 3,100 aircraft program of record.”

There’s a huge incentive to be competitive. “The program of record is slightly under $400 billion just to acquire the airplanes. And about 20 percent of that will be sourced outside the United States from international companies that are from these purchasing nations,” says Over.

“So when you do the math, it’s an enormous amount of money that is going to these industry partners around the world that will be supplying parts for the next 30-plus years associated with everyone’s F-35s,” he adds.

The F-35 is the first fully digitally designed aircraft. There are no 2-D drawings.  And it’s made largely from composites. There are no sheet metal parts on the F-35.  Terma’s expertise in composites make it an attractive partner.

“We are supplying our components to all F-35s, regardless of where they fly on this planet. The pure magnitude is of vital importance,” says Peter Worsøe, vice president of sales and business development at Terma’s precision composites manufacturing facility in Grenaa, Denmark.

Terma’s composites are fabricated from carefully cut layers of pre-impregnated carbon fibers that are put into a mold and heated under vacuum and pressure in an autoclave. Out of that comes a molded, completed product ready for trimming and surface treatment.  The quality control process includes ultrasonic scans and X-rays.  A horizontal tail fin may include 80 layers, or “plys,” and take two weeks to complete.

“The most unique process linked to the F-35 is the trimming process, which has to meet stringent tolerance requirements,” Worsøe says.

The F-35 has about 300 different composite panels, and Terma makes 55 of them.
Composites offer opportunities for integrating parts.  “An aircraft based on composite can typically end up consisting of fewer and larger, high-precision parts,” says Worsøe.  “If they were done in metal, it would require more individual parts which would require assembly.”

Compared to metal, composites reduce weight without sacrificing strength.  The heavier the plane, the more power and fuel that is required.  Low weight means more payload, or more fuel for longer range or mission endurance.

Although typically more costly, one advantage to the high-precision composite parts is that they are easier to exchange.  It also improves aerodynamics because it reduces gaps between parts.
Worsøe acknowledges there’s risk associated with the project.  “This F-35 program is like any commercial program.  We are not guaranteed today a workload for the future.  It’s an investment from our side based on our own risk assessment.” 

 “What is vital in order to help develop us into a very competitive aerospace company in the future is to move beyond low-rate production of military aircraft components and have the opportunity to participate in modern high-rate production programs — military and commercial — that brings down our learning curve, and can justify implementation of automatic manufacturing procedures,” says Worsøe.  “This will make us more competitive in the future, for the program that comes after the F-35 or a commercial program we can run in parallel to the F-35 program.”

Over says the industrial partners recognize the opportunity that has been afforded them.  “We’re seeing every one of these partner companies doing what’s necessary to bring their associated prices down.  From an industrial standpoint, we’re all focusing on a price learning curve, getting smarter and finding better ways to build parts more efficiently.”

That’s something that’s incredibly important for Lockheed Martin, Over says.  “As the prime contractor, we hear it almost every day from our customer — focus on bringing the price of the airplane down. So we rely tremendously on our supply base to do their part.  All of our international industrial partners are cooperating with us to help us bring the price of the airplane down where it needs to be.”

Lockheed Martin and the joint program office have initiated a cost-reduction program called “Blueprint for Affordability.” 

“Working with our two principle industrial partners — Northrop Grumman and BAE Systems —we’re investing $170 million of our own money over the next two years, focused on purely bringing the price of the airplane down.  That’s to be followed with three years of investment from DoD to the tune of $100 million each year for the following three years,” says Over.  “So roughly, over a five-year period, $470 million invested in bringing the price of the airplane down.”

“We’re working with our international industrial participants like Terma … to make their processes leaner, more efficient and to challenge the design of equipment, the products and parts that they’re building,” Over adds.

Terma produces parts of the airplane that go in the center fuselage supplied to Lockheed Martin by Northrop Grumman, using the later company’s design. Over says. But suppliers such as Terma have their own design authorities and their own intellectual capacity. 

“So they’re looking at the parts, figuring out how to manufacture them and putting their designing teams to work on how to build them more efficiently and affordably. That’s the cycle that’s happening right now, funded by the Blueprint for Affordability,” Over says.

The Blueprint for Affordability will fund the recertification process of alternate manufacturing methods so that the final end product will still meet the same requirements imposed upon the total aircraft, he adds.  “It’s a catalyst that’s added to the affordability formula of learning curves and economies of scale that really speeds up cost reduction.”

Over says roughly half of the total annual buys of airplanes in the foreseeable future will be for international customers. 

“The international component is a huge element of what we do. It’s building this coalition capacity that the U.S. is going to need in a future day and age, but it’s also bringing the price of the U.S. airplanes down. The economies of scale of the international airplanes that are already projected will reduce the cost of every F-35 that the U.S. buys by approximately $10 million.  And it’s a true win-win situation for everyone involved,” Over says.

Edward Lundquist is a retired Navy captain and principal science writer for MCR Federal.

Topics: Aviation, Joint Strike Fighter

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