Japan to Cease In-Country Assembly of F-35 Jets (excerpt)
(Source: Defense News; posted Jan 18, 2019)
By Mike Yeo
MELBOURNE, Australia --- Japan has confirmed it will not use in-country final assembly facilities for its next lot of Lockheed Martin F-35 fighter jets.

A spokesperson from the U.S. ally’s Acquisition, Technology and Logistics Agency, or ATLA, told Defense News it will instead acquire aircraft imported from overseas for its upcoming fiscal 2019 contract.

The ATLA spokesperson referred Defense News to Japan’s Defense Ministry when asked why Japan will stop local assembly and checkout for its F-35s. The ministry has yet to respond to inquiries.

However, the recent defense guidelines and five-year defense plan released by the Japan government in late December said the country wants to “acquire high-performance equipment at the most affordable prices possible” and “review or discontinue projects of low cost-effectiveness.” (end of excerpt)

Click here for the full story, on the Defense News website.

(EDITOR’S NOTE: When it first ordered the F-35, Japan requested and obtained a Final Assembly and Check-Out facility (FACO) even though it is a Foreign Military Sales customer and not a program member.

Italy, the only other country with such a facility, spent €795.6 million (nearly $1 billion) to set it up and, given Japan’s higher costs, it is likely that the Japanese government and Mitsubishi Heavy Industries, which runs the Nagoya-based FACO, spent more.

But “A weaker yen and higher than expected assembly costs have driven up aircraft per-unit costs from around $89 million to approximately $160 million,” The Diplomat reported Dec. 18, adding that “According to the Japanese MoD, the additional F-35s, however, will not be assembled in Nagoya and will be delivered in fly-away condition from the United States.”

“The cost of locally building Lockheed Martin F-35 Lightning II fighter aircraft for the Japan Air Self-Defense Force (JASDF) is about USD33 million more than importing the same aircraft from the United States,” Jane’s reported in March quoting an ATLA spokesman.

The difference between the costs quoted by The Diplomat ($160 million) and Jane’s ($89m + $33m = $122 million) is such that, like most prices quoted for the F-35, neither is entirely plausible.

Furthermore, it is not clear whether the cost of Japan-assembled F-35s include amortization of the Nagoya FACO, which could add as much as $26 million per aircraft if the FACO’s estimated $1 billion cost is spread out over the 38 F-35As that will be assembled there

Local assembly of the F-35 is, clearly, not a financially attractive prospect, as Italy has discovered to its expense.


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