Aerospace industry fears lost revenue, jobs in canceling untendered F-35 deal
Thursday, November 18, 2010 at 04:57PM 
The association representing the interests of the Canadian aerospace industry across the country is calling on members of Parliament to vote against the motion that would cancel the planned purchase of the F-35 aircraft. The Aerospace Industries Association of Canada (AIAC) is also critical of the lack of facts and understanding of the benefits related to the acquisition of the F-35 Lightning II fighter aircraft as demonstrated by the motion put forward today in the House of Commons.
"To say that by cancelling the current process and starting from scratch would somehow result in a greater number of jobs for our industry and without penalties is not only a stretch but it is completely misleading," stated Claude Lajeunesse, President and CEO of the AIAC. "The instability in the Canadian industry on this issue is creating a climate whereby jobs and investment are being threatened if not lost already".
The AIAC takes issue with the motion that states the Direct Industrial Participation which underpins the purchase of the F-35 would "create fewer jobs" than the Industrial and Regional Benefits (IRB) approach. It demonstrates a serious lack of understanding of aerospace and defence related issues.
"The IRB policy—the traditional approach to procurement policy when buying military equipment off-the-shelf—would result in guaranteed offset investments equivalent to the cost of the aircraft evaluated at only $4.8 Billion (USD), not $9 Billion as suggested by some." said Mr. Lajeunesse. "Cancellation and delay of this purchase will not only mean lost jobs and investment related to the 65 planes, but also billions of dollars and thousands of Canadian jobs lost relating to thousands of planes to be built as part of the broader program," he continued.
While the industry is pleased with the recent improvements brought to the IRB policy by the Minister of Industry, the concept of Direct Industrial Participation will provide companies with opportunities to compete for the production of 3000 to 5000 aircraft as Canada is a full participant in the F-35 program along with eight other countries. This amount represents more than $12 Billion in opportunities on the partner's fleet only, excluding those related to sustainment and foreign military sales.
"The projects generated to date already place Canadian companies in prime position to reap benefits - once the high rate of production starts - worth more than the minimum that would be guaranteed for capital equipment under the IRB approach." said Mr. Lajeunesse. "We need to move forward on this critical investment for our military and for our industry in order to continue to reap the benefits from being part of this international program."
"We urge Members of Parliament to support the future of our aerospace industry and the 150,000 direct, indirect and induced jobs it generates by voting against this motion" concluded Mr. Lajeunesse.
The AIAC is the national association representing Canada's aerospace manufacturing and services sector. As the world's fifth largest aerospace industry, Canada's aerospace sector generated in 2009 over $22 billion and employed nearly 80,000 Canadians. Seventy-eight per cent of Canadian aerospace products were exported. AIAC represents the interests of 400 aerospace companies across Canada.
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