Brian Stewart: Super-costly F-35s, a global wrecking ball

There is a stark lesson in the escalating cost nightmare of the F-35 fighter jets that holds more ominous implications for Washington than even for Canada's Harper government.

Quite simply, it is that allied Western nations are finding the once-vaunted high-tech American weaponry no longer politically affordable. Not in large numbers.

Canada's grief over its share of the F-35 price tag — now estimated to be almost $46 billion over 42 years — has been shared by a half-dozen countries, including Britain, Australia, Italy and the Netherlands, which have been forced to either cut back on their orders or contemplate outright cancellation.

This political fallout is upending the whole global arms bazaar. Around the world, America's big-ticket defence items are being increasingly challenged by cheaper products from Europe and now Asia as well.

More developing countries are shunning extravagant U.S. weaponry for the cheaper but quite-good-enough products of Russia, China, India, and South Korea.

India itself recently rejected a large F-35 purchase in favour of buying more Russian and, possibly, French fighters for its fleet.

This trend could have strategic consequences — and not only for U.S. military influence abroad and its important high-tech manufacturing base.

But if America's allies are forced to swallow hard and, in the process, take on fewer of the super-costly F-35 joint strike fighters, they could well end up with smaller air capabilities over the next 20-30 years than they had been planning on.

The whole F-35 experience has produced a classic negative cycle in which unanticipated glitches cause delays that drive up prices, which, in turn, causes still more wavering by potential buyers, leading to more delays, still higher costs, and so on, with no end in sight.

End of the gravy train

For America's military-industrial complex, as it is sometimes called, it now seems that the age of illusion is coming to an end.

"We have been on a gravy train of military capability over the past 60 years. And we are seeing signs of its death," Gen. Steven Kwast, the director of the U.S. Air Force Defence Review warned recently.

"We all grew up in a Cold War paradigm of outspending, out-producing an adversary," Kwast said, adding that, because of all this overspending, "if we aren't careful we can find ourselves where we can't afford the basics."

He is just one of many critical voices in the U.S. currently denouncing a military and political mindset that encouraged near-perfection in high-tech weapons, which consistently lead to ruinous cost overruns.

It is a problem that goes well beyond the F-35s.

American insistence on super-smart combat designs has pushed the price tag of one destroyer to $1.2 billion and a new submarine to twice that. Even Congress has started to gag at such numbers.

Ironically, it was Washington's concern over rising foreign competition that led to the F-35 woes.

The Pentagon recklessly raced the Lockheed Martin F-35 into early production in 2007, even before it was flight tested, in an attempt to corner the market for the company's new stealth technology.

As aviation analyst Richard Aboulafia told the New York Times, "there was this big desire to kill the competition."

'Acquisition malpractice'

Bypassing flight tests before production was extraordinarily risky and some officials inside the Pentagon warned it would end badly. But apparently higher-ups insisted that any kinks would be worked out in computer simulation.

The F-35 was originally to have been a relatively affordable mix of three different plane types. But it turned out to be a far more complex hybrid than imagined.

Start-up costs have already consumed $65 billion, and the whole mess was denounced as "acquisition malpractice" by the Pentagon's new procurement chief, Frank Kendall, earlier this year.

The F-35s are now the most expensive weapons program in history, so over the top, in fact, that the Pentagon's original hope to produce some 2,400 of these fighters, spread across nine nations, is fading fast.

The estimated unit price per plane has doubled from $69 million to $167 million today and some industry experts warn that only half that projected production run may be achievable — which will mean even higher unit prices for foreign buyers like Canada (if we go ahead with the purchase).

Strategic consequences

Cutting back on production is where the self-inflicted pricing woes of U.S. military manufacturers have true strategic consequences.

On paper, the U.S. still racks up the most foreign "purchase agreements" every year, but what really matters are actual "deliveries." And here the U.S. has slid from a near monopoly in the 1990s to just a little over 30 per cent of the total today.

That additional competition may not be a bad thing, you say. But, traditionally, big arms sales served U.S. strategic interest as they helped extend American influence all over the globe through these arms pacts.

Today, such clout may be exerted by the new competitors waving cheaper long-term deals.

America's problems here put Ottawa in a most uncomfortable position as it finds itself wrestling with a fighter option it can't afford with an aerospace giant in decline and likely unable to extend as many economic side benefits as were initially promised.

A further wrinkle is that a number of countries are concluding that the F-35 is not only too expensive, but far more sophisticated than is required in today's global environment.

In Canada's case, cabinet has yet to make a convincing argument that buying 65 hybrid stealth fighter-bombers makes more strategic sense than, say, buying a mixed fleet, or even a smaller fleet with cheaper alternatives.

It now says it will "reset" the whole decision. But given the enormous stakes involved, we can expect immense pressure from the U.S., our closest ally, to not reject this plane before the eyes of the world.

But unless a solution is found to these runaway F-35 costs, this particular dank swamp will only grow more terrifying for ministers to contemplate with each passing month.