Japan Says Fighter Decision to Be Made Soon After Report of Lockheed Win
Japan to Make Decision ‘Soon’ on Fighter Deal
Lockheed Martin Corp. via Bloomberg
An undated handout photograph shows Lockheed Martin Corp.'s F-35 fighter jet. Lockheed has already won a $382 billion order to build more than 2,440 F-35s for the U.S., the Pentagon’s biggest weapon deal.
An undated handout photograph shows Lockheed Martin Corp.'s F-35 fighter jet. Lockheed has already won a $382 billion order to build more than 2,440 F-35s for the U.S., the Pentagon’s biggest weapon deal. Source: Lockheed Martin Corp. via Bloomberg
Japan said it’s close to selecting a supplier for a fighter-jet order that may be worth more than $4 billion after the Yomuiri newspaper reported that Lockheed (LMT) Martin Corp. will win the contest.
“We’ve entered the final stages,” Defense Minister Yasuo Ichikawa told reporters in Tokyo today. “I want to make a decision soon.” He declined to elaborate on the timing of an announcement.
Lockheed, Boeing Co. and Eurofighter GmbH have all bid to supply Japan with about 40 planes as the Asian nation replaces older planes and bolsters defenses. Bethesda, Maryland-based Lockheed’s F-35 Joint Strike Fighter may win because of its anti-radar technology and Japan’s traditional reliance on U.S. military hardware, said James Hardy, a London-based analyst at IHS Jane’s DS Forecast, which advises defense suppliers.
“The F-35 has an advantage in terms of its stealth capabilities and the fact that it is the newest platform on offer,” he said. “Its provenance may be a factor too -- like the Boeing (BA) F/A-18, it’s a U.S. platform.”
Japan will choose the F-35 over the Boeing F-18 Super Hornet and Eurofighter Typhoon, Yomuiri reported today without saying where it got the information from. The decision will be announced Dec. 16, it said. Japanese Chief Cabinet Secretary Osamu Fujimura said at a separate press briefing that the report wasn’t true.
Lockheed has already won a $382 billion order to build more than 2,440 F-35s for the U.S., the Pentagon’s biggest weapon deal. The program is five years behind schedule and 64 percent over cost estimates.
Japan Assembly
Japan will base its decision on both the performance capabilities of the fighter jets and the amount of production work that can be undertaken by Japanese companies, Ichikawa said. Mitsubishi Heavy Industries Ltd. (7011), Fuji Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd. have all previously worked on assembling fighter jets in Japan.
U.S. and European defense contractors have boosted their focus on Asian and emerging markets as austerity drives damps the outlook for military spending in their home markets. India has shortlisted Eurofighter and Dassault Aviation SA as it seeks a supplier for 126 fighter jets that may cost more than $11 billion. Eurofighter is a venture between BAE Systems Plc, Finmeccanica SpA and European Aeronautic, Defence & Space Co.
Japan’s new fighters will replace Boeing F-4s, which were last assembled in the country in 1981. The Asian nation, which has the world’s sixth-largest defense budget, is upgrading its air defenses as both Russia and China develop stealth fighters and as North Korea works on improving its ballistic missiles and developing nuclear weapons. Japan had a total of 362 fighter jets as of March 31, according to the defense ministry’s website.
Minister Censured
The country is pressing ahead with the fighter contest even after Ichikawa was censured by the opposition-controlled Upper House earlier this month. He earlier cut his salary to take responsibility after a deputy compared the planned move of a U.S. military base on Okinawa to rape.
The F-35, which can be used for both spying and combat, costs about $133 million each in today’s dollars, according to the U.S. Government Accountability Office. Typhoons cost about 59 million euros ($78 million), according to Eurofighter, while Chicago-based Boeing last year said it would offer F-18s to the U.S. for $49.9 million each.
To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
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