October 15, 2016 2:00 am JST

Lockheed proposes stealth fighter project with Mitsubishi Heavy

SAM NUSSEY, Nikkei staff writer

TOKYO -- Lockheed Martin has proposed developing a new Japanese stealth fighter with Mitsubishi Heavy Industries, the U.S. defense giant's president told The Nikkei.

"We did respond with our partner MHI to the request for information in August," Lockheed Martin President Marillyn Hewson said in an interview at the Japan Aerospace 2016 trade show.

Lockheed Martin's proposal was made in response to a call from Japan's Ministry of Defense, which is weighing options to boost Japan's defensive capabilities in the face of rising regional tensions.

Japan is looking to replace its aging fleet of around 90 F-2 fighters and is mulling three possibilities. The first would be for Japan to develop a new jet domestically. The second would be co-development with foreign defense contractors, such as Lockheed Martin. The third would be to buy more existing aircraft -- say, Lockheed Martin's F-35 stealth jet.

The Japanese ministry's deliberations are ongoing, with a second round of information requests to be made by the end of next March. "We will definitely respond [to this request], we will be a part of that process," Hewson said. A final decision is expected in fiscal 2018.

Lockheed Martin rival Boeing has also proposed working with MHI on a replacement for the F-2. Alternatively, the Japanese contractor could opt to go it alone with its experimental stealth fighter, which made its maiden flight in April.

Japan has already purchased 42 F-35s from Lockheed Martin to replace its F-4 fleet. The F-35 was originally developed by the U.S. and eight other countries, including the U.K. and Italy, in what has been described as the world's largest weapons program.

The first four F-35s destined for Japan are being built at Lockheed Martin's plant in Texas; the rollout ceremony for the first completed jet took place on Sept. 23.

The remaining 38 jets will be made by MHI at its final assembly and checkout facility near Nagoya -- one of only two such facilities outside the U.S. "It's a lot of jobs and it's a lot of technology transfer and opportunities for Japan to continue to grow their defense capability," Hewson said. The U.S. Defense Department has chosen Japan and Australia to serve as maintenance sites for the F-35 in the Asia-Pacific region.

Hewson visited the facility near Nagoya during her trip to Japan. "Many of our employees are working side by side with [MHI] employees," she said. "It was great to see them on the production floor there."

Japan was prevented from joining the F-35 global supply chain by a decades-old, self-imposed ban on arms exports. However, the Japanese government eased the restrictions in 2014.

"We would look at [MHI] being potentially part of the overall supply chain as well," Hewson said.

"The Japanese aerospace industry is very ... capable," she added. "We would like to partner with them and stand ready to support them in any way as they go forward with their export of ... defense products and services."

Cooperation between MHI and Lockheed Martin extends to the restoration of F-2 jets that were damaged in the 2011 earthquake and tsunami. The aircraft was jointly developed by the two companies in the 1990s.

Another big Japanese defense contractor, IHI, is working with U.S.-based Pratt & Whitney on engine production and maintenance for the F-35. 

Production ramp-up

Lockheed Martin produced 43 F-35s last year and will turn out 50 this year. As production ramps up, the company expects to be making around 150 annually by 2019.

The F-35 program has faced criticism due to delays and spiraling expenses. But the company says costs, when compared to 2010, have come down by 57% for the most recent batch of aircraft. It is confident costs will fall further.

"What we project is that by 2019, the cost of an aircraft will be about $85 million," Hewson said. "That's comparable to or less than a legacy fighter."

The envisioned output increase raises concerns over the ability of suppliers to meet demand, but Hewson thinks this will not be an issue. "The supply chain is looking forward to this because for a few years we were pretty flat in the production, at about 30-35 aircraft," she said. "I feel very confident that we'll be ready to continue to ramp up the program."

Japan may also be in the market for a replacement for its Boeing F-15 aircraft, with Lockheed Martin keen to promote the F-35 as the best choice. "Japan has made the decision on the 42 aircraft, and I think if they have additional budget, they should consider the F-35," Hewson said.

Lockheed Martin is on the lookout for more Asian buyers for the F-35. In addition to Japan and Australia, South Korea has decided to buy 40 of the planes as concerns over North Korean military provocations continue to grow.

Singapore is also a potential customer. They have "been a security cooperation partner from the outset of the program," Hewson said. "I think at some point they will continue to look at if it makes sense for them to buy the aircraft. We hope that they will, at some time in the future."

While Lockheed Martin has said it expects to eventually build 3,000 F-35 jets, Hewson reckons the number could end up higher. "We've sold over 4,500 F-16s over the years, and today the program of record on the F-35 is a little over 3,000 aircraft," she said. "We think it will probably go the same as the F-16 and continue to sell even more than 3,000 aircraft."

Mitsubishi Heavy Industries, Ltd.

Japan

Market(Ticker): TKS(7011)
Sector:
Industry:
Producer Manufacturing
Industrial Machinery
Market cap(USD): 13,500.01M
Shares: 337.36M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

Resubscribe now to continue reading.
BEST OFFER:
Only US$ 9.99 per month for a full-year subscription

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.