Trump tweets may help Canada’s bottom line

December 15, 2016 by Stephen J. Thorne

F35
US Air Force F-35A maneuvers to refuel from a KC-135
MSgt John Nimmo Sr.
American defence and aviation giants are among the latest targets of Donald Trump’s relentless Twitter condemnations, and that could be good news for Canada.

Boeing and Lockheed Martin have come under fire from the president-elect over airplane costs. And, while his criticism of Boeing’s non-existent Air Force One contract was shot down in flames, it’s hard to find fault with Trump’s take on cost overruns associated with development and production of the F-35 stealth fighter.

Lockheed Martin stock took an immediate hit, just as Boeing’s did after Trump tweeted that a $4-billion contract for an Air Force One replacement should be scrapped. Trouble is, there is no contract for such a plane and, once that was clarified, Boeing shares rebounded.

At about US$400 billion, the Associated Press called the F-35 the Pentagon’s most expensive weapons program. The current figure is nearly double the original estimate for 2,457 planes.

Canada has invested $300 million in the plane’s development since it first became involved in the multinational Joint Strike Fighter program in 1997. It initially agreed to buy 65 of them at a lifetime cost of about $25 billion.

The program includes ongoing economic and industrial benefits largely contingent on purchasing the controversial aircraft. Lockheed Martin says Canadian industry has contracted more than $925 million in industrial opportunities.

The firm says the program has created hundreds of Canadian jobs at more than 110 companies and promises $11 billion in opportunities over the project life. It estimates worldwide sales could hit 4,000 aircraft.

In the face of rising costs and disappointing tests, however, Prime Minister Justin Trudeau promised during the 2015 election campaign to abandon the F-35 and consider other alternatives. Canada requires a defensive weapon, he said, not a combat strike aircraft with expensive stealth technologies.


From YouTube.com/CBCNews

Yet the Liberals have not taken the F-35 off the table. The government renewed Canada’s participation in the Joint Strike Fighter program last spring. And on the same day Trump tweeted his condemnation of F-35 costs, Trudeau announced an open call for proposals for a new fighter jet. Lockheed Martin and the F-35 were not excluded from bidding.

“It’s an open and transparent competition we’re going to be engaged in and the various aircraft and aircraft producers will have an opportunity to make their best case,” said the prime minister.

David Perry, a procurement expert at the Canadian Global Affairs Institute, told Reuters if Trump is going to “take this stance and try and drive costs down, that’s great for Canada, because it would make that potential option more attractive.”

Ottawa has said it would look into purchasing 18 Super Hornet fighter jets as an interim measure.


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