There’s a big international weapons program that probably doesn’t pass the post-coronavirus pub test for supply chain security. As US President Donald Trump’s recently said, ‘It’s a certain fighter jet, I won’t tell you which, but it happens to be the F-35.’
Trump’s musings about making all components for the F-35 in the United States might have been only a thought bubble, but they also brutally revealed the internal contradiction at the heart of calls to mitigate supply-chain vulnerabilities by bringing production back on shore: one person’s local manufacture is another’s loss of export markets and workshare.
There are a couple of reasons why Trump’s idea of stripping the seven remaining non-US partners in the joint strike fighter consortium (Australia, Canada, Denmark, Italy, the Netherlands, Norway and the United Kingdom) of their workshares likely won’t happen. The first is that finding new suppliers for literally thousands of components will inevitably delay the program even further. Replacements for all of the components made by Turkey still haven’t been found, even though the program has had a year and a half to work through the consequences of ejecting Turkey.
The second is that it would be an act of perfidy that would be hard for America’s allies to ignore. The other six consortium members are in NATO, which has already been buffeted by Trump’s treatment of allies. Those six have been in for the long haul, literally paying their consortium dues in the expectation of significant workshares. They are anticipating a substantial return on that commitment with production ramping up now. Plus, they have expectations of feeding parts into the sustainment supply for the next 40 years.
The Europeans generally have much higher expectations of industrial offsets than Australia does, so they would be outraged if Trump’s idea became a reality. They might even think of leaving the program and buying a different aircraft. But Trump has them over a barrel — the UK and Italy need the F-35B short take-off and vertical-landing variant for their aircraft carriers and there’s nothing else on the market. Those who are buying the conventional F-35A variant could look to the Eurofighter or something else, but their F-35 deliveries have already begun so there’s a huge sunk cost in changing course.
Australia’s workshare is also at stake. Let’s put aside the fact that there’s no public evidence for the widely repeated figure of 5,000 Australian jobs in the F-35 supply chain. That would be about the same number of jobs as will be directly involved in building the future frigates and submarines, so it also doesn’t pass the pub test. Independent analysis suggests 1,000 is a more reasonable number. Nevertheless, there is a principle here, not to mention contracts.
The allies’ sense of betrayal and the blow to US credibility should be enough to stop Trump going through with it.
But COVID-19 is forcing the world to challenge its assumptions, and that raises the question of whether you would design a program like this again. Deliberately scattering bits of manufacturing supply chains around the world goes against the post-COVID-19 wisdom of consolidating to ensure greater control.
The F-35 sustainment system also prevents participants from stockpiling their own spares for a crisis. All spares are owned and held by the program and are warehoused around the world. If you need them, you have to rely on a just-in-time model to deliver them — except the model doesn’t work anywhere near as well as we’ve come to expect from companies like Amazon, even in peacetime. So, you have to order your just-in-time spares two years in advance. The ‘autonomic logistics information system’ that is meant to understand and manage demand for spares is so clunky the US Department of Defense is junking it and starting over with a (hopefully) better one that doesn’t rely on 1990s software and is designed from the outset to operate in the cloud.
Australia will be a regional repair and warehousing hub in the current JSF model; hopefully Defence has done its due diligence to test whether that model with withstand the demands of wartime use. Nevertheless, Australia still can’t own and stockpile its own spares even if it wants to spend the money.
But more than this, there’s the sheer size and complexity of the program. Granted the aircraft is now more or less doing what it’s meant to do and is delivering unmatched capability. But the amount of developmental technology involved, the level of systems integration, and the amount of software to make it all work has also meant long delays, huge cost increases and a lack of agility.
The program has been going for 19 years and still hasn’t received sign-off to start full-rate production. Those delays mean it’s hard to plan transitions and legacy platforms stay in service longer. It also means you don’t enjoy the benefits of that unmatched capability for as long as adversaries have time to develop counter-technologies. The complexity means that individual consortium members can’t simply develop the upgrades they need, which is why Australia is still waiting for its priority capability — an integrated long-range maritime strike weapon. It also means sustainment costs are nowhere near the original aim of being comparable to those of the aircraft being replaced.
In contrast to the JSF behemoth, look at the little country that could. Sweden, with less than half the population of Australia, is one of the few countries left in the world that can design and build fighter planes (and submarines, warships, missiles and armoured vehicles, for that matter). There are only around 250 of Sweden’s Gripen fighter in the world compared with the more than 3,000 planned F-35s, but it still seems to be cost-effective to make them.
This isn’t to say we should abandon the JSF program and buy Gripens. But it does suggest we also should be exploring other models to develop and acquire military capability. Models that can deliver ‘good enough’ capability faster, that we can evolve ourselves to meet our priorities, and that we can support, repair and upgrade in a crisis are worth taking a look at in the post-COVID-19 world.
Marcus Hellyer is ASPI’s senior analyst for defence economics and capability.
This article is curated from ASPI’s The Strategist.