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that will also lower costs.
So those are the two primary ways. We know a lot
of things that if you just put a little bit of investment
up front, it will bring significant savings over the life of
KB: Program Director General Chris Bogdan has
spoken of the possibility of getting down to US
$80 million per jet. Now, that obviously could just
be a negotiating tactic but is that something you'd
want to comment on?
MH: Certainly. I think there is an opportunity for
us to do this. We'd have to work together with the
US Government. There are some smart buying
techniques that we can do and economically order
quantities and multi-year purchasing and things of
that nature that will enhance that opportunity to do
that. If you think about it, what I just said around
increasing the volume, if we can then go to our
supply chain and have more stability and recognition
of how many aircraft we're going to buy, that'll help us
to drive that cost down.
And then frankly, just over the course of the next
several years you increase the volume by a lot and it's
going to give us an opportunity to reduce the price.
So I think it's perfectly feasible. We'll have to work
together to achieve that.
KB: In Australia as the programme becomes
more mature, the number of critics of it is falling
away, but we've still got one or two who are not yet
convinced that the aircraft is worth it. What is the
status of the debate in the US? Is it now accepted
that the programme is rock solid or do you find
that there is still some criticism of it?
MH: My view is that it's rock solid. I mean there may
be an article here or there outside of the mainstream
media. The US Air Force and Marine Corps services
have already declared initial operational capability.
They're very excited to get the aircraft. They are
already participating in training exercises with the
F-35 demonstrating that it is absolutely the most
technologically advanced fighter aircraft in the world.
And so it's just an unrivalled combination of stealth
and speed and range and integrated defence and
data fusion capabilities - all of which gives it an edge
over 4th generation aircraft.
KB: Information coming from the most recent Red
Flag exercise suggests that the F-35 has been
MH: Yes. In terms of its technological capabilities
and what it brings to the United States, to our allies
and partners on programme and I think that's well
understood. They are unparalleled capabilities and it's
going to enable our partner nations to work together
effectively and in our ability to protect the safety and
security of our citizens.
The other added advantage of the programme is
just the fact that it is a joint programme. So you get
economies of scale and economies of commonality
and you get industrial participation across the
partner nations. Just in Australia alone it brings
a lot of economic growth for the nation because
there are more than 15 companies already that are
participating. We have placed contracts since it
started of around AU $800 million - on the current
exchange rate - and when you consider that what
they're producing, they are on every F-35 that's built.
So it's not just the production for Australian aircraft.
It's for the full fleet.
So it just will continue to grow - the programme
of record alone is over 3,000 aircraft and I expect it
to go higher than that over time. That's a real boost
for the economy of Australia. I think that's another
important thing to recognise because frankly you've
got economic security and economic growth in
our nations that it allows us to invest and trade
and achieve our aspirations through international
cooperation and things of that nature - so it's a very
When you look out to 2030, we project right now
that Australia industry contributions could roll up to
about AU $5.2 billion during that time frame. So it's a
big opportunity for growth in the nation and it's 2,000
direct jobs, but if you think about all the additional
indirect jobs that is many thousands more.
KB: Sure – and these are all hi-tech jobs.
MH: Absolutely. And there is also the following
opportunity for the actual maintenance and
sustainment of this aircraft and so it's not just
production and what goes in today's aircraft but then
follows on from that the opportunity to be the hub
for the Asia Pacific Southern region to do all of the
airframe and engine maintenance for the aircraft in the
area. So that's another exciting growth opportunity.
KB: Well, I have to admit that that's something
that I didn't fully appreciate and again until
speaking with General Bogdan when he pointed
out Australia is the only one of those that's actually
a partner country in the programme and when
you look at the number of USAF, Marine Corp and
Navy F-35s that are going to be in this region, well,
you can just start to think about the possibilities.
MH: Well, it's good that you're speaking to General
Bogdan because it's the US Government that makes
the decision on where the maintenance and repair
work will be performed for the global fleet. He's
exactly the person to discuss this. I do know that
Australia has been designated for the Asia Pacific
South regional hub and as you said being a regional
hub to service the global fleet of F-35s is a big
undertaking, a big opportunity for Australian industry.
KB: Could I ask you about the one part of the
programme that still seems to be a little bit of
a headache from a technical point of view? And
that's ALIS. Can you just give an overview of where
Lockheed Martin stands on getting that up to its
full level of capability?
MH: Well, we continue to work on it. This is a
development programme and just like the airframe
and engine development there is development on
that system. The autonomic logistics information
system - fondly called by the acronym ALIS - we've
rolled out different levels of capabilities. For example,
when the Marine Corp declared their IOC they
were asked what capability they had at the time
and we gave them a deployable ALIS system. We
continue to upgrade the software and go through the
development process. For example it did extremely
well with the recent Red Flag exercise.
Supporting Red Flag is a major undertaking and
then we'll finish the development this stage of the
latest software known as 3F. That'll get done to
support the Navy IOC that comes up next year. So
it's tracking through its process. It's challenging with
complex systems but I believe we've got the right
focus on it.
It may slightly vary from the original plans but I am
comfortable that we'll get through the development
stage on it and be ready to support the next IOC
for the Navy and the UK and other customers that
come up next.
KB: General Bogdan when he was referring to red
flag, I think he said that the F-35s were scheduled
to fly 217 missions and they flew 209 and the
cancelled missions were all done purely because
of weather problems. So it would certainly seem
that you're making very good progress.
MH: Indeed yes. It's very exciting. That really is
internal government testing but whatever the Chief
of the Air Force and General Bogdan and others are
willing to share, we all take note of it. I think I saw
some early data that it was like a 20 to nothing or 20
to one kill ratio for the F-35 during Red Flag.
I would just wrap up on the F-35 by saying that I
think it's a really exciting time to be able to showcase
the aircraft to the public here in Australia and so
6/04/2017 4:13 PM
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