Tag: Deal

The latest update on the Canadian government’s dispute with Boeing

CF-188 Hornet

Reuters news service is now reporting an update on the ongoing interim Super Hornet issue. It reports that Canada last month attempted to end the dispute with Boeing Co. by suggesting it could withdraw a threat not to buy Super Hornet jets if the U.S. firm dropped a trade challenge against Bombardier Inc.

I don’t know if this is exactly a great revelation though. The position of the Liberal government since April/May – when it put the brakes on the Super Hornet deal – has been pretty much that.  Drop the complaint about Bombardier or we won’t buy the Super Hornets.

Boeing has complained to the U.S. government that Bombardier is receiving subsidies, which in turn, allowed it to sell its C-Series civilisn aircraft at below-market prices. Boeing convinced the U.S. Commerce Department and International Trade Commission to launch an investigation into Bombardier.

The Trudeau government revealed Tuesday that it held talks last month with Boeing in hopes of convincing the U.S. aerospace giant to drop its case against Bombardier at the U.S. Commerce Department.

Those talks broke down when, according to Canada’s ambassador to the U.S., David MacNaughton, Boeing decided to stop negotiating. “We had some proposals back and forth and then they walked away,” MacNaughton said in St. John’s, where federal cabinet ministers were meeting to strategize before the return of Parliament next week.

“For whatever reason, they (Boeing) decided they weren’t going to continue to have discussions with us.”

Boeing has repeatedly argued that military purchases shouldn’t be linked to the commercial interests of a country’s aerospace firm.
On Sept. 25 we will get a better idea of the outcome of this dispute. That’s when the initial ruling on whether the U.S. will impose tarrifs on Bombardier for its civilian C-Series aircraft will be released.
(with files from the Canadian Press)

 

 

 

Here is what the RCAF gets from Boeing and the U.S. in Super Hornet deal

David Pugliese, Ottawa Citizen David Pugliese, Ottawa Citizen
More from David Pugliese, Ottawa Citizen

I had my story in the National Post on the estimated Super Hornet package cost that was released by the U.S. State Dept. Tuesday. It can be read here:

http://nationalpost.com/news/canada/buying-super-hornet-fighter-jets-would-cost-canada-more-than-6-billion-u-s-government-confirms

Here are more specific details about what Canada gets for $5.23 billion U.S.:

“The State Department has made a determination approving a possible Foreign Military Sale to the Government of Canada of ten (10) F/A-18E Super Hornet aircraft, with F414-GE-400 engines; eight (8) F/A-18F Super Hornet aircraft, with F414-GE-400 engines; eight (8) F414-GE-400 engine spares; twenty (20) AN/APG-79 Active Electronically Scanned Array (AESA) radars; twenty (20) M61A2 20MM gun systems; twenty-eight (28) AN/ALR-67(V)3 Electronic Warfare Countermeasures Receiving Sets; fifteen (15) AN/AAQ-33 Sniper Advanced Targeting Pods; twenty (20) Multifunctional Information Distribution Systems–Joint Tactical Radio System (MIDS-JTRS); thirty (30) Joint Helmet Mounted Cueing Systems (JHMCS); twenty-eight (28) AN/ALQ-214 Integrated Countermeasures Systems; one hundred thirty (130) LAU-127E/A and or F/A Guided Missile Launchers; twenty-two (22) AN/AYK-29 Distributed Targeting System (DTS); twenty-two (22) AN/AYK-29 Distributed Targeting Processor (DTP); one hundred (100) AIM-9X-2 Sidewinder Block II Tactical Missiles; thirty (30) AIM-9X-2 Sidewinder Block II Captive Air Training Missiles (CATM); eight (8) AIM-9X-2 Sidewinder Block II Special Air Training Missiles (NATM); twenty (20) AIM-9X-2 Sidewinder Block II Tactical Guidance Units; sixteen (16) AIM-9X-2 Sidewinder Block II CATM Guidance Units. 

Also included in this sale are AN/AVS-9 Night Vision Goggles (NVG); AN/ALE-47 Electronic Warfare Countermeasures Systems; AN/ARC-210 Communication System; AN/APX-111 Combined Interrogator Transponder; AN/ALE-55 Towed Decoys; Joint Mission Planning System (JMPS); AN/PYQ-10C Simple Key Loader (SKL); Data Transfer Unit (DTU); Accurate Navigation (ANAV) Global Positioning System (GPS) Navigation; KIV-78 Duel Channel Encryptor, Identification Friend or Foe (IFF); CADS/PADS; Instrument Landing System (ILS); Aircraft Armament Equipment (AAE); High Speed Video Network (HSVN) Digital Video Recorder (HDVR); Launchers (LAU-115D/A, LAU-116B/A, LAU-118A); flight test services; site survey; aircraft ferry; auxiliary fuel tanks; aircraft spares; containers; storage and preservation; transportation; aircrew and maintenance training; training aids and equipment, devices and spares and repair parts; weapon system support and test equipment; technical data Engineering Change Proposals; technical publications and documentation; software; avionics software support; software development/integration; system integration and testing; U.S. Government and contractor engineering technical and logistics support; Repair of Repairable (RoR); repair and return warranties; other technical assistance and support equipment; and other related elements of logistics and program support.  The estimated total case value is $5.23 billion.”

 

Exclusive: Lockheed nears $37 billion-plus deal to sell F-35 jet to 11 countries

U.S. Navy F-35C Lightning II

REUTERS, By Mike Stone, 18 June 2017

Lockheed Martin Corp (LMT.N) is in the final stages of negotiating a deal worth more than $37 billion to sell a record 440 F-35 fighter jets to a group of 11 nations including the United States, two people familiar with the talks said. This would be the biggest deal yet for the stealthy F-35 jet, which is set to make its Paris Airshow debut this week. The sale represents a major shift in sales practices from annual purchases to more economic multi-year deals that lower the cost of each jet.

The pricing of the jets was still not final, though the average price of the 440 jets was expected to be $85 million, the people said on condition of anonymity because they were not authorized to discuss the negotiations publicly. A representative for the customers including the United States did not immediately respond to a request for comment on Sunday. Last week, representatives from 11 F-35 customer nations met in Baltimore, Maryland to discuss terms and toured a Northrop Grumman Corp (NOC.N).

Those nations included Australia, Denmark, Israel, Italy, Japan, the Netherlands, Norway, Turkey, South Korea, Britain and the United States. The memorandum of understanding being negotiated between Lockheed and the customers aims to procure 135 or more jets in fiscal year 2018 for delivery in 2020 for about $88 million per jet, the people said.

In the subsequent fiscal years, 2019 and 2020, procurement would ramp up to 150 or more jets per year. The average price in 2019 could be $85 million for the F-35 “A” variant and could drop below $80 million in 2020, the people said. That would mark the lowest price ever paid for an F-35, making this deal an important step in reducing the overall cost of each jet.

The F-35 has been widely criticized for being too expensive, including by U.S. President Donald Trump and other U.S. officials who have criticized the Pentagon’s most expensive program for delays and cost overruns. The memorandum of understanding will guarantee contracts will take place in each successive future year.

This allows the manufacturing group led by Lockheed to take advantage of greater economies of scale, reducing the cost of each jet. They have been working to reduce the cost of the jets through streamlining the supply chain and purchasing materials in bulk.

Recently revised estimates indicate the U.S. Defence Department expects to spend $379 billion, down from $391 billion, to develop and buy 2,443 of the supersonic warplanes through 2039 one of the people said.

The F-35 comes in three configurations, the A-model for the U.S. Air Force and U.S. allies; the B-model, which can handle short take-offs and vertical landings for the Marine Corps and the British navy; and the carrier-variant F-35C jets.

In February, the Pentagon agreed to a deal for the tenth batch of the fighter aircraft and agreed to pay below $95 million per jet for the first time, compared with $102 million in the previous purchase which was the lowest price up until that point. Around that time the Pentagon said the price of a jet could fall 16 percent to around $80 million in future purchases.

See the HMS Queen Elizabeth & F-35B Lightning CGI Tour on Defense of the Realm, HERE