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Royal Canadian Air Force (RCAF) News and Discussions

Discussion in 'Air Force & Aviation' started by John Fedup, Jun 16, 2015.

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  1. Calculus

    Calculus Active Member

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    If this is the case, and I am not saying I doubt you protoplasm (though some evidence would be appreciated), then wouldn't Airbus have just nudged themselves out of contention for this competition? I find it hard to believe Airbus and SAAB, who have proposed the same thing, would do this knowing it would make them noncompetitive.
     
  2. protoplasm

    protoplasm Member

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    The 12 per year came from a stab in the dark based upon a couple of small production facilities. The F-16 production line move to Greenville, is aiming to produce approx. 12 per year to fulfil the Bahrain contract.

    Lockheed Martin to produce new F-16 fighter jets in Greenville

    and also the batch 3 lot of Gripens was produced at around about 12 per year

    Sweden approves order for third Gripen batch

    For Airbus and SAAB it doesn't make them uncompetitive to propose to do a small production run, it makes perfect financial sense for them as they will price in all the establishment costs to ensure they don't lose money. For any country, they are then choosing to pay for the establishment costs for the line as well as the fighters they get out of it. If that established line is then closed all those establishment costs are then lost as the expertise leaves. This is why people fight to keep production lines open as they know that the establishment costs can be prohibitive if they have to do a startup. There are ways of hiding the establishment costs in offsets, local assistance packages etc, but ultimately the country bears the costs of establishing the production line.

    A different example is the boom and bust cycle of military shipbuilding here in Australia. Over decades we have repeated a bunch of financial stupidity as our governments have repeatedly paid to setup a new shipyard location to produce a run of frigates, destroyers or patrol boats, only to then starve the shipyard of work, force everyone to leave, and then pay an exorbitant amount to do it all again in a new location. We "apparently" have a current bipartisan commitment to an ongoing shipbuilding plan that will allow one shipyard to have enough ongoing work, with major refits and modernisations able to be carried out elsewhere.
     
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  3. StingrayOZ

    StingrayOZ Well-Known Member

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    Its to have 3 continuous production lines in Australia.
    • A Small ship production line (flexible building, 2000t OPV's and other assorted ships, could be scaled up to destroyer sized ships).
    • A surface combatant production line
    • A submarine production line.
    Australia has significant orders for each. Probably over 20 for the small ship , 12+ for the surface combatant and 12 for the subs (which are very large and complex subs, more than twice the size of the Victoria class). There is also efficiencies having a total of 3 production lines, not just one. Maintenance and upgrades are on top of this, so these aren't paired down runs with some gap filler work between them. On top of that there are some other maritime commercial yards. One of the builders is owned by a large civilian and industrial builder, who builds mining, oil and gas and other welding/heavy machinery stuff so again, efficiencies.

    If Canada wanted to have a military aircraft production line ways it could be done is to roll all the acquisitions into it.

    * New trainer aircraft say 60+
    * Fighter replacement say 100+
    * Transport helicopters 50+
    * Attack helicopters 30+

    Now helicopters, fighters and trainers are all very different types of aircraft and there would still be huge wastage and layoffs at the end of each program. You would also be paying a huge premium for the short runs. But there could be a core business at the middle that helps transfer skills and people and capability.

    France for example ordered 180 Rafales and that gets them close to a regular production line. Things like Gripen can get away with smaller orders because its heavily leans on US production for things like engines. They have also built a total 250 Gripens, so there is a fair amount of volume going through and repeat customers etc. None of that is available for Canada.

    Only some 15 gripens are being assembled in Brazil and are more assembled for knock down kit type approach than a regular production line, although some Brazilian companies are making components. I assume these would be the companies already supplying entities like Embraer etc.

    Also the planes Canada is looking at are all pretty old. They are not attractive to other first world nations, or even developing ones in the time-frames being talked about and Canada has proven itself very conflicted when supplying other countries.

    Why did it take so long for Canada to kill the Philippines helicopter sale?

    Canada also hasn't exactly be boasting about flight hours, so things like logistical support is likely to be as flaky as Russian suppliers, but with western prices. Canada also isn't exactly an energetic contributor to military deployments, any assurances about customers getting Canadian military support when needed is going to sound very hollow.

    All while Canada spends 1% on defence and becomes increasingly irrelevant and clumsy in global affairs, even with its allies, as it is seen as being more insular than the US and less practical and far less capable.
     
  4. John Fedup

    John Fedup Well-Known Member

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    StingrayOz and protoplasm....great points on why Canadian production/assembly of fighters is a non-starter. The political support for multiple aircraft production that might justify a new production facility is questionable. As for ship production problems, see my comment on the RCN thread.
     
  5. Todjaeger

    Todjaeger Potstirrer

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    12 per year sounds about right, though there is some variation depending on the specific production costs, complexity, and work force. France IIRC either has, or is planning on dragging the Rafale production line out, producing 11 Rafale per year, just to maintain the production facility and a core skilled work force.

    When trying to determine what total number would need to be ordered, there are some questions which really need to be asked and answered. If the question was a purely economic one, then analysis would need to be done to estimate the costs to purchase the future RCAF fighter vs. the cost to establish a domestic production capability, and the calculate the revenues gov't might expect to collect on taxes paid by businesses and employees either directly involved in the build, or involved in a capacity which supports those businesses and employees who are directly involved. I recall an AusGov paper which had been floating around the forum when I was still just a lurker which indicated that the net economic costs to Australia for a domestic warship build would be less than an overseas build even if the Oz-built warship would cost 30% more than an import. This was just based upon the increased amount of Australian domestic content, the pay earned (and then spent) by Australian shipyard workers, and then the 2nd order revenues earned from the wages of employees of those businesses which support the shipyard workers, the spending by the businesses which support the yard workers, etc.

    If Canada was just looking for either an economic return, or simply and economic break even point, that would likely involve coming up with estimates to establish the production line, which all on it's own would likely cost dozens if not hundreds of millions of dollars. Estimates would also be needed to determine how components and/or a what percentage of the replacement fighter could be manufactured (as opposed to assembled) in Canada. I suspect portions of the airframe and structural members could be manufactured in Canada, but a number of the critical systems like the radar and avionics, the engines, etc. would either need to be imported, or at best assembled locally from a mix of domestic and imported parts. Given the sensitivity of the R&D and therefore the value of the technology, I do not see Canada getting a full ToT for complete domestic licensed production of the engine, the radar, etc. Using the Swedish RM12 jet engine in the Gripen as an example, while they are assembled in Sweden, a significant portion of both the design and parts come from the US. Once all that was determined, Canada would need to estimate how much economic activity each dollar which went into the domestic fighter build programme would generate, to determine what the break even point was. There would also need to be some consideration for what happens once the production run ends, which would likely last about eight years.

    OTOH if the objective of the programme was particularly ambitious, namely to establish and sustain a domestic Canadian fighter production capability, some how the production line would need to be kept open and running even after the RCAF order was completed. Honestly the most likely scenario for that would be for the Canadian gov't to keep placing additional orders after the RCAF order was completed, since most likely any agreement with Saab or Eurofighter for Canadian production would not include production and/or export rights for foreign sales, as that would let a Canadian plant compete directly with European plants for international fighter orders.
     
  6. StingrayOZ

    StingrayOZ Well-Known Member

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    Euro-fighter export orders are pretty much tapped out. Many euro-fighter partner nations were quite keen to sell off euro-fighters to other nations.
    Italy I think has just found a home for its fighters, securing Eurofighter production for a bit longer.

    The Eurofighter production workshare is also not an easy thing in itself.

    [​IMG]

    Also look at the production numbers:
    [​IMG]
    Eurofighter Partners Face Hard Decisions on Production, Damages As Orders Run Out

    Its already on life support for production. Its best years are in the past. The only reason its there at all is Kuwait.

    The whole F-35 workshare was meant to be the ultimate solution to this problem. Now Canada wants to double dip. Secure F-35 work, then not buy it, try and acquire other work. Supply chains are going to quickly start winding down, there is really only enough for a full 2019 work year, which is what many suppliers will do, and move staff onto other projects.

    I got a feeling that Canada's existing F-35 workshare may come under competition from say an actual F-35 user, like Japan, who is ordering over 140 F-35 and is leaving the door open to even more. Arguably Japan has a larger aviation and related sector and typically has local production of basically every defence item it acquires. The situation regarding Japan and the F-35 has changed significantly, it is likely Japan is no longer seeking local assemble because it has some pretty good new work share arrangements. They cancelled all local assembly as of (18/12/2018)

    https://en.wikipedia.org/wiki/Lockheed_Martin_F-35_Lightning_II_procurement#Japan

    Not sure if the Americans would be happy for the same business that is making F-35 parts to go off an make parts for a directly competing fighter. That was all carefully managed over many years, electing to build a new type of fighter is likely to put Canadian work on the F-35 at risk.

    Much like Canada's stunts at the TPP signing in Vietnam. The Australian delegation was absolutely ropeable and the Japanese were seriously displeased. Almost derailed the whole thing, purely for selfish reasons.

    https://www.abc.net.au/news/2017-11...ustin-trudeau-canada-fails-to-show-up/9140250

    So with that kind of history, recent military operation and procurement issues, I think Canada is looking pretty sketchy. Local build is fanciful.

    I full expect Canada to order the F-35 eventually. Reduced number probably.

    All this neglect will make the RCAF ripe for pillaging.
     
  7. Calculus

    Calculus Active Member

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    So, that's one view of what happened at the TPP. Here's another: 'We weren't ready' to close deal: Trudeau defends Canada's actions on TPP | CBC News
     
  8. Calculus

    Calculus Active Member

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    Not sure what your point is here. The planes Canada is looking (F35, SH, Gripen, and Typhoon) at are pretty much representative of what is available on the market at this time. Any other country, First World or not, would likely be looking at the same (or similar) mix of planes. Those are the same planes competing in Poland, Finland, Germany, and Switzerland.
     
    Last edited: Jan 18, 2019
  9. Calculus

    Calculus Active Member

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    I don't think there are any illusions we would keep workshare if we didn't buy the F35. I believe this is why both Airbus and SAAB are pitching local manufacture, as LM has the advantage at the moment in both price and industrial benefits. Building locally, and technology transfer, are potent weapons against the mighty LM machine. If Airbus can demonstrate that their proposal would counteract any losses of work on the F35, it gives them a greater chance of success. Again, to be clear, I would personally favour an F35 buy, but this pitch by Airbus is at least intriguing.
     
    Last edited: Jan 17, 2019
  10. Black Jack Shellac

    Black Jack Shellac Member

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    Another thing that might play into this, is that the F-35 agreement does not guarantee work whereas Airbus or SAAB could.

    Canada to accept bids for new fighter jet in May.

    "But that could be a problem for the F-35, as Canada is still a partner in that program, which does not guarantee participating-nations contracts."

    I agree with Calculus; though I would prefer the F-35 for Canada, I suspect the europeans may give LM more than a challenge if they can guarantee more value than what LM cannot guarantee.
     
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  11. John Fedup

    John Fedup Well-Known Member

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    Frankly Boeing could likely put together a similar benefit package to Airbus and better than what Saab could. The SH would also be less expensive. I guess it depends on the residual effects of Boeing’s mis-step. In any event the F-35 would be the best choice.
     
  12. Calculus

    Calculus Active Member

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    Good point Black Jack. I had forgotten the F35 program does not guarantee work-share, regardless of how many aircraft are purchased. I believe companies also regularly have to compete for work, even if they are incumbent. So, having work today is no guarantee you will have business tomorrow.

    It's all described here quite nicely, from a Canadian perspective (the data is as of 2012, but the principles are unchanged): Canadian Industrial Participation in The F-35 Joint Strike Fighter program —December 2012 - Canadian aerospace and defence industry
     
  13. Calculus

    Calculus Active Member

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    I think people on this forum (perhaps even some Canadians) may not understand the scope and breadth of Canada's aerospace sector. It is huge, and extremely varied. All the pieces to build fighters already exist, and the manufacture of pretty much all the components could be done "in-house", without creating a lot of new capability.

    Here is a good summary: State of the Canadian Aerospace Industry 2018 - Canadian aerospace and defence industry
    Figure 4 shows Canada's rank in the world, for civil aircraft, engines, and flight simulators. 3rd, 3rd, and 1st. We also excel at composites manufacturing, landing gear manufacturing, and complex metallurgy. It could all be done here, and the government knows this, and will give consideration to any proposal that offers such a solution. Dassault, by the way, also proposed a full technology transfer and local assembly for Rafale before they pulled out of the competition. Their pitch included a transition from assembly to maintenance/overhaul after the last fighter was built, so that could also be part of the Airbus proposal.
     
  14. Todjaeger

    Todjaeger Potstirrer

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    I have a somewhat different take on the viability, and for that matter the relevance, of Canada's aerospace industry with respect to domestic production of a modern fighter aircraft. Canada certainly has the technology to make most if not every component and sub-component of a modern fighter like a Gripen, Rafale, or Typhoon. Where things really start to fall apart though is with the time, space and costs required to setup, produce and test those components and sub-components, especially for some of the more complex systems like the CAPTOR-E AESA radar for use on the Typhoon. With basically any RCAF fighter order being under 100 fighters/units, there just is not going to be significant volumes for the specific parts which means the one time setup costs which are usually fairly constant regardless of order size (i.e. the cost to configure a lathe to machine 100 identical wing spars costs essentially the same as if the lathe was going to machine 1,000 of those exact same wing spars) have less to spread those one time costs over.

    Assuming Canada could get the technology and plans for some of the more advanced systems like the EJ200 engine, or the CAPTOR-E AESA radar (a number of these systems are not owned or not wholly owned by the aerospace company with the fighter that uses the system), would it really make sense for a Canadian radar manufacturer to manufacture the T/R modules required for the CAPTOR-E, if the company needs to re-tool a production line to produce just enough units to satisfy the RCAF order, plus some spares? Canada would not be able to just swap the CAPTOR-E out for a domestic radar without requiring a redesign and likely impacting how functional the fighter would be until testing was done. Same goes for production of fighter jet engines and so on.

    FWIW even though Canada already is producing aircraft landing gear, Canada does not, to my knowledge produce the specific type(s) of landing gear used by the Gripen, Rafale, or Typhoon, so some setup for that specific type landing gear would still be required. Same goes for any other component that Canada might consider producing.

    Also to give an idea of the importance of volume, Bombardier has had the Global Express in production for over 20 years now, and produced over 800 units which works out to ~40 per year. That sort of volume and the continuing orders enable the production line to remain in operation, because the costs to establish the production line would have already been paid for by earlier aircraft orders.
     
  15. ngatimozart

    ngatimozart Super Moderator Staff Member Verified Defense Pro

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    Manufacturing civilian aircraft whilst remaining viable is one thing and manufacturing military aircraft AND remaining viable is totally different. Just look at Airbus with the their experience of the A400M, or Eurofighter and the Typhoon. In both cases the Euro govts have had to bail the manufacturers out at considerable expense and Airbus does extremely well in it's civilian airliner market. I think that it would be very fiscally irresponsible for Canada to build a dedicated production line for, what 88 combat aircraft, that they will have not hope of exporting any follow on numbers. Yes Canadian industry should be supported, but at what cost? There comes a point where such policies become self defeating and fiscally ruinous. I think Canada may have well and truly passed that point where it's defence acquisitions can be two , three times the cost of the equivalent or same acquisition in other nations, such as the FEYES nations and that costing includes the WOLC, currency differences and national peculiarities.

    Yes it is easy for outsiders to look in and criticise, but the criticism of the DEFPRO's and one or two others on here is both informed and constructive and as I have said earlier, we don't have any particular axe to grind because we don't have a dog in that particular fight.
     
  16. John Fedup

    John Fedup Well-Known Member

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    I think it fair to say that Japan has had much more recent experience in building licensed fast jets than Canada. It seems they have come to the conclusion it is financially unfeassible. Part of this is low volume and no export potential. Pretty good example of why Canada should take note. This decision doesn’t rule out some future development of an all Japanese or partnership design down the road which would have export potential assuming Japan gets serious about exporting military kit.

    Japan to cease in-country assembly of F-35 jets
     
  17. Calculus

    Calculus Active Member

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    The fact is 3 of the 5 potential competitors proposed building in Canada (Airbus, SAAB, and Dassault). One would have to presume they all thought this could be done within the project budget, or they would not have proposed such a solution.

    Here is more on this: AIRBUS: 800% Bigger Installations at Mirabel Airport in Quebec - Taking Options For More Land

    This is clearly not going away.
     
  18. Calculus

    Calculus Active Member

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    Counterpoint: There is a project budget, which can't be exceeded, so I don't know why the conclusion this will cost 2-3 times more than anywhere else. The cost of building an assembly line, even if it was hundreds of millions of dollars, is still a small percentage of the $15-19 Billion budget.

    Also, with regards to the potential order, I would like to point out that the operational requirement if for 88 fighters. This does not include airframes for test or attrition. The original order of 138 Hornets included 10 attrition airframes and 8 test airframes (there was also an option for another 20, which was not exercised). So, it would not surprise me if the requirement is somewhere around 100.
     
  19. John Fedup

    John Fedup Well-Known Member

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    The Mirabel expansion makes sense for their commercial operations. Your link mentions 150 jets which is unlikely. As for budget, kind of meaningless once the project is started. The Typhoon is an expensive jet based on recent sales so when the government fines this out after, they have two options. They cancel or suck up the difference. The A400M is an example of Airbus cost containment. What Airbus is likely promising the government is a bigger part of Airbus commercial in exchange for paying way more for fighters. This might make sense for Quebec which already has a 53% share of aerospace commercial manufacturing. Do you really expect giving Quebec (an unreliable partner in Confederation) a virtual 100% share of military fighters is going to sit well with the rest of the country? I, for one, don’t think so. I bet I’m part of a majority!
     
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  20. Calculus

    Calculus Active Member

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    More information on how the project will be run: Future fighter capability project – Air – Defence and marine procurement – Buying and Selling – PSPC Services

    Note that the bidders will be expected "to make investments in Canada equal to the value of the contract". This is pretty standard, and has been a requirement for Canadian defence contracts for at least 30 years. You see announcements regularly to this effect, such as this one from LM: Lockheed Martin Delivers IRB Commitments for CC-130J · Lockheed Martin