Australien — The Joint Strike Fighter Program and Australia

THE HON. GREG COMBET AM MP Min­is­ter for Defence Materiel and Sci­ence

Mon­day, 3 May 2010

“The Joint Strike Fight­er Pro­gram and Aus­tralia: Stay­ing Inno­v­a­tive To Remain Rel­e­vant” JSF Advanced Tech­nol­o­gy & Inno­va­tion Con­fer­ence Mel­bourne

Check-against-Deliv­ery

MINISTER FOR DEFENCE MATERIEL AND SCIENCE, THE HON. GREG COMBET AM MP

Thank you Air Vice-Mar­shal Har­vey for your kind intro­duc­tion and good morn­ing every­one.

I would like to thank all of you for attend­ing this very impor­tant con­fer­ence, par­tic­u­lar­ly those who have trav­elled so far to be here.

I note that today’s con­fer­ence is well-rep­re­sent­ed by the JSF Pro­gram Office and the major JSF con­trac­tors; Lock­heed Mar­tin, BAE Sys­tems, Northrop Grum­man, Pratt & Whit­ney, GE and Rolls-Royce. I appre­ci­ate your sup­port for this ongo­ing Aus­tralian ini­tia­tive.

I also appre­ci­ate the wide range of atten­dees from Aus­tralia; from R&D organ­i­sa­tions; indus­try; and from Defence and oth­er gov­ern­ment depart­ments.

This is the fourth Aus­tralian JSF Advanced Tech­nol­o­gy and Inno­va­tion Con­fer­ence, and its sub-title is “Advanced Tech­nol­o­gy for a Future JSF: From Ore in the Ground to Parts on the Aero­plane”.

The sub-title reflects an oppor­tu­ni­ty for Aus­tralia to make use of its valu­able nat­ur­al resources. For exam­ple, Aus­tralia pos­sess­es around 40% of the world’s tita­ni­um yet we are doing lit­tle with it despite its use increas­ing rapid­ly in both civ­il and mil­i­tary aero­space;

The aim of this con­fer­ence is to help bring Aus­tralian tech­nol­o­gy and inno­va­tion togeth­er to the ben­e­fit of the JSF Pro­gram, because it is through our part­ner­ship in the JSF Pro­gram, the world’s largest col­lab­o­ra­tive defence pro­gram, that we will meet our strate­gic and eco­nom­ic goals.

I’d like to take this oppor­tu­ni­ty to dis­cuss the sta­tus of the Joint Strike Fight­er pro­gram, includ­ing the issues around afford­abil­i­ty. I then intend to dis­cuss the cur­rent and future Aus­tralian indus­try oppor­tu­ni­ties and final­ly I intend to make an announce­ment around the Com­mon­wealth Government’s sup­port for Aus­tralian com­pa­nies seek­ing to win JSF work.

Pro­gram Sta­tus

Late last year, I vis­it­ed Lock­heed Mar­tin at Fort Worth for dis­cus­sions on progress of the JSF Pro­gram and to see first-hand what had been achieved since I vis­it­ed in 2008.

I was impressed with what I saw at Fort Worth, but the vis­it also high­light­ed to me the immense chal­lenge posed by the JSF Pro­gram – nine part­ner nations and many of the world’s lead­ing aero­space com­pa­nies in part­ner­ship, devel­op­ing three vari­ants of an afford­able fifth-gen­er­a­tion stealth fight­er that will be the back­bone of our tac­ti­cal air com­bat capa­bil­i­ty for the next gen­er­a­tion.

As we have seen over the last few months, there is no doubt that the JSF Pro­gram will con­tin­ue to face chal­lenges that must be over­come. But if the JSF wasn’t so chal­leng­ing, it wouldn’t deliv­er what we all want. The sig­nif­i­cant advances in capa­bil­i­ty pro­vid­ed by the fifth gen­er­a­tion JSF war­rant­ed Gov­ern­ment accept­ing a degree of risk in this pro­gram.

You are all aware of US Sec­re­tary of Defense Robert Gates’ recent state­ments on JSF cost and sched­ule issues, as well as on con­trac­tor per­for­mance not meet­ing expec­ta­tions over the last year or so. The Aus­tralian Gov­ern­ment wel­comes the deci­sive action that he has tak­en to deal with these issues and we are com­mit­ted to work­ing with the US and oth­er part­ners to make this Pro­gram a great suc­cess and a mod­el for future inter­na­tion­al col­lab­o­ra­tion.

In rais­ing his con­cerns about JSF cost and sched­ule issues, how­ev­er, Sec­re­tary Gates stressed that he saw no fun­da­men­tal tech­ni­cal chal­lenges that threat­ened the ulti­mate suc­cess of the Pro­gram. Indeed, we have seen major tech­ni­cal achieve­ments recent­ly, includ­ing:
* the suc­cess­ful first short take-off, hov­er and ver­ti­cal land­ing of the Short Take-Off and Ver­ti­cal Land­ing vari­ant;
* first flight of the first mis­sion sys­tems air­craft;
* com­ple­tion of cer­ti­fi­ca­tion and first flight of the Hel­met-Mount­ed Dis­play sys­tem; and
* Just last week the first two Con­ven­tion­al Take-Off and Land­ing test air­craft flew a total of 16 suc­cess­ful sor­ties in a peri­od of only sev­en days.

There has also been good progress in ground sta­t­ic test­ing and devel­op­ment of JSF sen­sors and com­ple­tion of around 85% of the total 20 mil­lion lines of JSF soft­ware.

When I was at Fort Worth in 2009 I was able to wit­ness the assem­bly line work­ing on the first pro­duc­tion air­craft.

It is impor­tant to restate that over­all, no offi­cial review of the JSF pro­gram such as the 2009 Joint Esti­mat­ing Team report have dis­cov­ered any fun­da­men­tal tech­no­log­i­cal or man­u­fac­tur­ing prob­lems with the JSF pro­gram, or any change in the aircraft’s pro­ject­ed mil­i­tary capa­bil­i­ties.

Afford­abil­i­ty

But tech­ni­cal chal­lenges do remain, as do afford­abil­i­ty chal­lenges.

I’m sure you’re all aware of the ongo­ing review of JSF cost esti­mates – no sim­ple task to deter­mine the cost of pro­duc­ing over 3,000 next-gen­er­a­tion fight­ers for Unit­ed States (US) Ser­vices and inter­na­tion­al part­ners out beyond 2030 with a high degree of com­mon­al­i­ty across three vari­ants using new pro­duc­tion tech­niques with new tech­nolo­gies and mate­ri­als.

When­ev­er we dis­cuss the costs of the JSF we need to keep in mind that the esti­mates are based on pre­vi­ous devel­op­men­tal air­craft such as the Super Hor­net and F‑22. It is use­ful to look at how actu­al costs to date com­pare with the esti­mat­ed costs.

While we are ear­ly in the pro­duc­tion phase, it should be not­ed that the con­tracts for Low Rate Ini­tial Pro­duc­tion Lots 1 to 3 were signed well below the pre­dict­ed costs con­tained in the Joint Esti­mat­ing Team report. For exam­ple the LRIP 3 con­tract was signed for twen­ty per cent below the Joint Esti­mat­ing Team esti­mate.

It is also impor­tant at this stage to dif­fer­en­ti­ate between the core JSF Pro­gram and our New Air Com­bat Capa­bil­i­ty project and to stress that we have always adopt­ed a cau­tious approach to JSF cost and sched­ule esti­mates.

We have fac­tored in sig­nif­i­cant cost and sched­ule buffers in our project in antic­i­pa­tion of the steps being tak­en in the US to deal with project risks and to ensure that our Ini­tial Oper­a­tional Capa­bil­i­ty will be met in 2018 as planned.

Afford­abil­i­ty has always been a key goal of the JSF Pro­gram and we must do all we can to keep it afford­able:
* afford­able to devel­op;
* afford­able to pro­duce;
* afford­able to sus­tain; and
* afford­able to upgrade through­out its life so that it can meet evolv­ing threats.

Like Aus­tralia, JSF part­ner coun­tries are seek­ing an afford­able solu­tion, but they are also, under­stand­ably, seek­ing a good out­come for their nation­al indus­try giv­en the large invest­ment they will be mak­ing.

Achiev­ing the twin goals of afford­abil­i­ty and part­ner indus­try involve­ment requires indus­try to be com­pet­i­tive, which in turn requires effec­tive appli­ca­tion of advanced tech­nol­o­gy and inno­va­tion. It also requires the com­mit­ment of the Program’s prime con­trac­tors to seek out the most cost-effec­tive and inno­v­a­tive solu­tions across the JSF part­ner­ship – hence this con­fer­ence!

Oppor­tu­ni­ties for Aus­tralia in the JSF Pro­gram

Defence spon­sor­ship of this, the fourth JSF Advanced Tech­nol­o­gy and Inno­va­tion Con­fer­ence, illus­trates the impor­tance the Gov­ern­ment places not only on the JSF Pro­gram itself, but also the role played by Aus­tralian indus­try and R&D organ­i­sa­tions, now and over the planned 50 or so year life of the Pro­gram.

The JSF offers a unique oppor­tu­ni­ty for Aus­tralian indus­try to par­tic­i­pate in the one of the most advanced aero­nau­ti­cal projects ever attempt­ed.

Australia’s part­ner­ship in the JSF Pro­gram offers major oppor­tu­ni­ties for inter­na­tion­al­ly com­pet­i­tive and inno­v­a­tive Aus­tralian com­pa­nies and R&D agen­cies to enter the sup­ply chains of some of the largest and most sophis­ti­cat­ed man­u­fac­tur­ers in the world.

While mil­i­tary off-the-shelf projects have their ben­e­fits, they gen­er­al­ly imply mature sup­ply chains and lim­it­ed oppor­tu­ni­ties for new play­ers to get involved. Devel­op­men­tal pro­grams like the JSF cer­tain­ly present risks but they also pro­vide major oppor­tu­ni­ties while the sup­ply chains for the Pro­gram are being devel­oped.

And it’s not just the sup­ply chain for the Aus­tralian fleet – enter­ing the JSF Pro­gram as a devel­op­ment part­ner opens up oppor­tu­ni­ties in the glob­al sup­ply and sup­port chain of the world’s largest defence project.

Because the pro­grams are devel­op­men­tal, we are talk­ing about new and advanced tech­nolo­gies and the oppor­tu­ni­ty to increase Aus­tralian exports in the aero­space and elec­tron­ics sec­tors as well as increas­ing employ­ment in high-tech­nol­o­gy jobs.

It’s about mov­ing into new mar­kets and devel­op­ing Aus­tralian-based advanced man­u­fac­tur­ing tech­nolo­gies, notably com­pos­ites and tita­ni­um. This improves and strength­ens our over­all skills base in engi­neer­ing design, research and man­u­fac­tur­ing, an out­come that over­laps with those sought in oth­er man­u­fac­tur­ing sec­tors.

It is impor­tant to tak­en an his­tor­i­cal view of these oppor­tu­ni­ties, just as the use of alu­mini­um in air­craft rev­o­lu­tionised trans­port in the 20th cen­tu­ry, the use of com­pos­ites and tita­ni­um will char­ac­terise 21st cen­tu­ry avi­a­tion. Mas­tery of these mate­ri­als by Aus­tralian com­pa­nies will be an essen­tial pre­cur­sor to win­ning work on avi­a­tion projects.

Aus­tralia there­fore needs to keep up with cut­ting-edge tech­nol­o­gy and must reduce costs asso­ci­at­ed with pro­duc­tion, main­te­nance and oper­a­tion of the air­craft. In your dis­cus­sions over the next three days, I urge you to con­sid­er how Aus­tralia might col­lec­tive­ly lever­age new tech­nolo­gies and remain cost com­pet­i­tive.

Aus­tralian Indus­try Progress

To date, 28 Aus­tralian com­pa­nies have won work on the JSF Pro­gram val­ued at over $200 mil­lion. This work has been pri­mar­i­ly in the ini­tial design and pro­duc­tion of test air­craft. I would like to con­grat­u­late all those com­pa­nies for their sig­nif­i­cant achieve­ment in the face of stiff inter­na­tion­al com­pe­ti­tion.

Involve­ment in the JSF Pro­gram has exposed our com­pa­nies to the meth­ods and prac­tices that the over­seas primes expect their sup­pli­ers to adhere to, which has, in turn, increased our com­pa­nies’ chances of win­ning fur­ther work in the inter­na­tion­al sup­ply chains.

To meet JSF require­ments, our com­pa­nies have had to pro­duce com­po­nents with the finest tol­er­ances and high­est per­for­mance, which has also helped improve local pro­duc­tion meth­ods, com­pet­i­tive­ness and effi­cien­cy.

Future Indus­try Oppor­tu­ni­ties

With the Pro­gram now ramp­ing up to pro­duc­tion rates, much larg­er oppor­tu­ni­ties are open­ing up as Lock­heed Mar­tin and its JSF part­ners lock in sec­ond source sup­pli­ers to meet grow­ing capac­i­ty require­ments.

The key deter­mi­nant of the ulti­mate cost of the JSF will be how quick­ly sup­pli­ers can reduce cost as vol­umes increase – that is the pro­duc­tion ‘learn­ing curve’ effect. To remain com­pet­i­tive, all JSF sup­pli­ers will need to con­tin­u­al­ly improve effi­cien­cy and inno­vate.

Aus­tralian com­pa­nies are now direct­ly engaged with Lock­heed Mar­tin and its JSF indus­try part­ners in secur­ing con­tracts and long-term agree­ments for the pro­duc­tion oppor­tu­ni­ties iden­ti­fied in the JSF Indus­try Par­tic­i­pa­tion Plans.

The Indus­try Par­tic­i­pa­tion Plans iden­ti­fied bil­lions of dol­lars of oppor­tu­ni­ties in JSF’s 25-year pro­duc­tion stage alone. This is in addi­tion to the facil­i­ties and infra­struc­ture work in the order of $1 bil­lion to be spent in Aus­tralia.

The Indus­try Par­tic­i­pa­tion Plans include approx­i­mate­ly 180 indi­vid­ual oppor­tu­ni­ties for Aus­tralian indus­try based on an inves­ti­ga­tion of Aus­tralian indus­try capa­bil­i­ties dur­ing the ini­tial devel­op­ment phase of the JSF Pro­gram.

While these oppor­tu­ni­ties offer large indus­try devel­op­ment poten­tial for Aus­tralian indus­try, poten­tial­ly cre­at­ing sev­er­al thou­sand long-term jobs, the upfront invest­ment is con­sid­er­able.

To that end, Gov­ern­ment is work­ing with Lock­heed, its JSF part­ners and their sub-con­trac­tors, to devel­op long-term agree­ments with Aus­tralian com­pa­nies so that Aus­tralian indus­try has the con­fi­dence to make the nec­es­sary invest­ments to win this work.

While there has been active engage­ment with Aus­tralian indus­try in many areas of the Pro­gram, progress in some areas has been slow­er than expect­ed. Fur­ther work is required here, and I stressed these issues to Lock­heed Mar­tin when I vis­it­ed Fort Worth last year – they must search deep and hard among all part­ner coun­tries, includ­ing Aus­tralia, to ensure capa­bil­i­ty and afford­abil­i­ty goals are met.

Recent devel­op­ments in terms of major long-term pro­duc­tion work have includ­ed the sig­na­ture of a Mem­o­ran­dum of Under­stand­ing on JSF ver­ti­cal tails and com­pos­ite doors and pan­els – poten­tial­ly worth hun­dreds of mil­lions of dol­lars. Around the same time there was a MOU signed for JSF Aux­il­iary Mis­sion Equip­ment – also poten­tial­ly worth hun­dreds of mil­lions of dol­lars.

I also pass on my appre­ci­a­tion to the many more Aus­tralian com­pa­nies that have not yet won work on the Pro­gram but have put a lot of effort into future oppor­tu­ni­ties. I encour­age you to keep up the good work – the gov­ern­ment team will con­tin­ue to work with you as part of JSF Team Aus­tralia to achieve a pos­i­tive out­come.

Fol­low-on Devel­op­ment

In addi­tion to the oppor­tu­ni­ties already iden­ti­fied in the Indus­try Par­tic­i­pa­tion Plans for the JSF pro­duc­tion phase, there will be major addi­tion­al oppor­tu­ni­ties through the fol­low-on devel­op­ment and sus­tain­ment phas­es of the Pro­gram.

Although JSF is a long-term project, the base­line design is essen­tial­ly com­plete. We there­fore need to look at future devel­op­ment oppor­tu­ni­ties for Aus­tralian tech­nol­o­gy and inno­va­tion that enhance capa­bil­i­ty and afford­abil­i­ty. And it’s not just about the air­craft itself – there are many oth­er oppor­tu­ni­ties in JSF enabling and sup­port sys­tems.

Fol­low­ing estab­lish­ment of the base­line design, it is planned that JSF will under­go tech­nol­o­gy refresh and block upgrades over the life of the Pro­gram to ensure the air­craft retains its capa­bil­i­ty edge. Invest­ment in non-recur­ring engi­neer­ing alone will be in the order of US$500 mil­lion per year.

Each block upgrade rep­re­sents about ten years from con­cept to imple­men­ta­tion. This long time hori­zon empha­sis­es why Aus­tralian indus­try and R&D organ­i­sa­tions need to antic­i­pate future require­ments if we are to con­tin­ue to play a role in the Pro­gram.

For Aus­tralia to be suc­cess­ful in this future envi­ron­ment we must dri­ve inno­va­tion in defence tech­nol­o­gy by pool­ing the exper­tise and resources of gov­ern­ment, indus­try and R&D organ­i­sa­tions.

Today’s con­fer­ence is one small step in that process. The con­nec­tions made here today between research organ­i­sa­tions, indus­try and gov­ern­ment may well lead to new capa­bil­i­ties in the JSF in 10 years time.

Gov­ern­ment sup­port for defence inno­va­tion

The Gov­ern­ment is very inter­est­ed in sup­port­ing inno­va­tion in the defence indus­try. The Gov­ern­ment is cur­rent­ly refin­ing its Indus­try Pol­i­cy State­ment and we expect to release it short­ly.

A key pol­i­cy ini­tia­tive, how­ev­er, is the $21 mil­lion Defence Indus­try Inno­va­tion Cen­tre, which works with SMEs in the defence sec­tor to boost pro­duc­tiv­i­ty, improve inno­va­tion and increase com­pet­i­tive­ness. I had the hon­our of for­mal­ly launch­ing the Cen­tre in Sep­tem­ber last year. I am pleased to see some of its rep­re­sen­ta­tives here today.

Most recent­ly, Defence and the Depart­ment of Inno­va­tion, Indus­try, Sci­ence and Research have been work­ing to iden­ti­fy poten­tial sources of finan­cial sup­port to assist in deliv­er­ing major indus­try oppor­tu­ni­ties, par­tic­u­lar­ly impor­tant for large upfront invest­ments to meet JSF pro­duc­tion capac­i­ty require­ments.

To expand the rela­tion­ship between DSTO, uni­ver­si­ties and indus­try, the Gov­ern­ment also com­mit­ted to estab­lish a research cen­tre to con­duct research on defence pri­or­i­ty areas. The estab­lish­ment of the Defence Mate­ri­als Tech­nol­o­gy Cen­tre (DMTC) is a prod­uct of this ini­tia­tive. I’m glad to see there are rep­re­sen­ta­tives from the DMTC here today.

There have also been sig­nif­i­cant changes to the Skilling Aus­tralian Defence Indus­try (SADI) pro­gram over the last two years. Defence has con­cen­trat­ed on reduc­ing the amount of ‘red tape’ involved in apply­ing for SADI, mak­ing it as easy as pos­si­ble for com­pa­nies to access SADI. It is very pleas­ing to see that there has been a strong increase in SADI appli­ca­tions and in the finan­cial com­mit­ment of indus­try.

The New Air Com­bat Capa­bil­i­ty project also ini­ti­at­ed the Aus­tralian JSF Indus­try Tech­nol­o­gy Facil­i­ta­tion Pro­gram around the time of the last of these con­fer­ences.

The pro­gram iden­ti­fied some 300 pro­pos­als from Aus­tralian uni­ver­si­ties and pub­licly-fund­ed research organ­i­sa­tions which had the poten­tial to con­tribute to JSF fol­low-on devel­op­ment or to improve JSF man­u­fac­tur­ing process­es.

In this con­text, it was recog­nised that, to achieve long-term nation­al indus­try objec­tives for JSF, it was nec­es­sary for Defence to pro­vide some sup­port for devel­op­ment of select­ed pri­or­i­ty areas, for which suit­able fund­ing mech­a­nisms were not at that point avail­able.

To con­tin­ue this impor­tant work I am pleased to announce that $8.5 mil­lion in fund­ing to assist indus­try in over­com­ing ear­ly invest­ment chal­lenges was approved as part of the recent $3.2 bil­lion NACC Stage 1 sec­ond-pass approval. This $8.5 mil­lion is in addi­tion to all the oth­er pro­grams and is con­crete evi­dence of Gov­ern­ments com­mit­ment to help Aus­tralian indus­try that is com­pet­i­tive win work on the JSF.

This is par­tic­u­lar­ly impor­tant as our focus shifts to greater engage­ment in pro­duc­tion, sus­tain­ment and fol­low-on devel­op­ment.

While we are yet to specif­i­cal­ly allo­cate these funds they will be devot­ed to rel­a­tive­ly small invest­ments that have a large poten­tial pay off for Aus­tralian indus­try. We are work­ing on three cat­e­gories of fund­ing to sup­port:
* Tech­nol­o­gy devel­op­ments that will enhance Aus­tralian indus­try par­tic­i­pa­tion in the JSF Pro­gram;
* Small invest­ments that will enhance the poten­tial for SMEs to com­pete for and win oppor­tu­ni­ties that are iden­ti­fied in the JSF Indus­try Par­tic­i­pa­tion Plans; and
* Inno­va­tion by Aus­tralian indus­try and research organ­i­sa­tions, where this has appli­ca­tions for JSF fol­low-on devel­op­ment.

We are expect­ing that some of the new tech­nolo­gies pre­sent­ed here at this con­fer­ence may be eli­gi­ble for sup­port under the JSF Indus­try Tech­nol­o­gy Facil­i­ta­tion Pro­gram.

As an exam­ple, one of the inno­va­tions Defence is already sup­port­ing relates to laser-assist­ed machin­ing of tita­ni­um. The Gov­ern­ment is work­ing with Fer­ra Engi­neer­ing, CAST CRC and Lock­heed Mar­tin on the con­trolled tran­si­tion of tech­nol­o­gy in this area from the lab­o­ra­to­ry envi­ron­ment to the work­shop.

If suc­cess­ful, this work could lead to a 40 per cent or more reduc­tion in the time to machine com­plex tita­ni­um parts. I would like to con­grat­u­late all those involved for their work in pio­neer­ing this approach.

A sim­i­lar approach is being exam­ined on direct man­u­fac­tur­ing of tita­ni­um and oth­er alloys to near net shape where there are sav­ings of up to 60 per cent in machin­ing time con­sid­ered achiev­able.

Gov­ern­ment and the pri­vate sec­tor need to joint­ly seize the oppor­tu­ni­ties that such inno­v­a­tive work and our part­ner­ship in the JSF Pro­gram offers – we need to work togeth­er now to secure the oppor­tu­ni­ties for the future.

Con­clu­sion

As I said before, the JSF Pro­gram is extreme­ly impor­tant to Aus­tralia and the oth­er part­ner coun­tries from a strate­gic and eco­nom­ic per­spec­tive and the work you are doing now will have major long-term impli­ca­tions.

The Gov­ern­ment is com­mit­ted to work­ing with the US and the oth­er JSF part­ner nations to make this Pro­gram a great suc­cess and a mod­el for future inter­na­tion­al col­lab­o­ra­tion.

My key mes­sage is that we must stay inno­v­a­tive and com­pet­i­tive to remain rel­e­vant.

I would now like to declare open the fourth Aus­tralian JSF Advanced Tech­nol­o­gy and Inno­va­tion Con­fer­ence. I wish you all well over the next three days and I look for­ward to hear­ing about the out­comes.

Media con­tacts:
Rod Hilton (Greg Com­bet): 02 6277 7620or 0458 276 619
Defence Media Liai­son: 02 6127 1999 or 0408 498 664

Press release
Min­is­te­r­i­al Sup­port and Pub­lic Affairs,
Depart­ment of Defence,
Can­ber­ra, Aus­tralia

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