It's the first cancellation, and Canada is more than a customer, it is also one of the original 9 nations that formed the JSF consortium:
The F-35 jet fighter purchase, the most persistent thorn in the federal government’s side and the subject of a devastating auditor-general’s report last spring, is dead.
Faced with the imminent release of an audit by accountants KPMG that will push the total projected life-cycle costs of the aircraft above $30 billion, the operations committee of the federal Cabinet decided to scrap the controversial sole-source program and go back to the drawing board, a source familiar with the decision said.
This occurred after Chief of the Defence Staff Thomas Lawson, while en route overseas, was called back urgently to appear before the committee, the source said.
The decision is sure to have ripple effects around the world, as any reduction in the number of aircraft on order causes the price to go up for all the other buyers. Canada is one of nine F-35 consortium members, including the United States.
Last spring, Ferguson ignited a political firestorm when he reported that the top-line cost cited by the Conservatives in the 2011 election campaign — $9 billion for 65 planes, or $15 billion including maintenance and other life-cycle costs — was $10-billion below the Defence Department’s internal estimate.
Even the internal figure of $25.1 billion was suspect, critics said, because it assumed a 20-year life cycle. The longevity of the Lockheed-Martin-built aircraft, according to the Pentagon, is 36 years.
KPMG’s audit, due out next week, has confirmed the contention, long made by critics such as former assistant deputy minister (materiel) Alan Williams, that the F-35 program’s real cost would be much higher than any previously stated government estimate, sources say.
H/t Christina Mackenzie at the Ares blog.
Understand also that the KPMG analysis almost certainly ignored the elephant in the room, the fact that for any nation operating the F-35, they will be opening themselves up to potentially extortionate charges for support from from the prime contractor over the life of the program, because of the highly integrated, and completely closed, architecture of the aircraft:
It is not often that governments are afforded the luxury of looking into the future before they irrevocably commit to a course of action that will have momentous long-term consequences.Unlike the case of the UK's AH-64Ds, the architecture of the JSF is such that if you opt out of the upgrade, and Lockheed will stops supporting that model of the aircraft, you won't simply have an aircraft that is obsolete or obsolescent, you will have an aircraft which cannot fly, because the customer will not be allowed to have tools to maintain it.
Yet, this is just what the debate about the future of Britain’s fleet of Apache attack helicopters provides, not just to its own government, but also to other European governments as they prepare to order, at great cost, the US-made F-35 Joint Strike Fighter.
Britain’s problem is that it operates the AH-64D Longbow version of Apache, while the US Army is upgrading to the AH-64E Block III version. This means that “essential technical support for the British Apache fleet will be withdrawn from 2017,” as the Daily Telegraph reported Dec. 5, leaving Britain with the choice of either upgrading all or part of its Apaches to the new version, or retiring them after 2017 as they drift into early obsolescence.
Whether they realize it or not when they buy a US-made weapon, that is how the system works: US forces only support the weapons they operate, so it’s either keep up or drop out, and in this case either scrap your weapons or see them fade away into technical and operational irrelevance.
The other side of the coin, obviously, is that buyers of US weapons are always assured of having access to the very latest versions, improvements and upgrades decided by the US military.
Each time the US military decides a modification or upgrade to its F-35s, foreign customers will have to follow suit, at whatever cost Lockheed and the Pentagon decide, or else see their aircraft become obsolete as US technical support shifts to the newer version.
In fact, the situation will be infinitely more serious in the case of the F-35, as export customers will not have access to the aircraft’s source codes, nor to its more advanced maintenance methods and equipment, because all but the most basic maintenance will be carried out by Lockheed Martin in its own facilities in the United States.
Foreign operators of the F-35 will have to pay to play. But it is probable that European governments do not fully understand this consequence of buying into a major US program.
European buyers of the F-16 in the 1970s – which now all intend to buy the F-35 - were not faced with a similar situation because they had assembled their F-16s in Europe; because software source codes were not an issue at the time; and because the United States had a vested interest in keeping allies’ fighters as effective as possible during the Cold War, when profits took a back seat. None of these circumstances exist today.
Your $100 million dollar aircraft has become a door stop.
As an aside, one wonders whether there is will be an "off switch" on export models of the F-35.
Certainly, if I were directing foreign military sales at the Pentagon, I would demand such a feature, at least for those aircraft shipped to non NATO allies.