Cost Offsets

The JSF saga continues, but it is nearing its end.

We may not be gaining access to critical JSF components, but the tough to swallow price tag may now be muted according to Israeli sources. In the form of a 4 billion dollar manufacturing cost offset which will somewhat lessen the economic sting of a JSF costing twice as much as an F15 latest gen Boeing fighter..

Israeli defense companies have scored one of the biggest deals in the industry’s history: They will be making about $4 billion worth of parts for the next generation of American fighter jets, industry sources told TheMarker.

While no official announcement has been made, Israeli defense officials have been talking with the U.S. defense companies involved in the development and production of the F-35 Joint Strike Fighter. [...]

It is a testament to how badly Israel, the US & Lockheed want to make this whole thing work. After the JSF balloon in cost, both the USA & Lockheed need orders for the jet badly. Israel needs help paying for it.

Prestige

The IAF is indeed a huge win in the jet fighter realm.. The Israeli airforce is world renowned and other countries pay close attention to Israeli procurement. Israel would be the 1st original non official partner on board buying the jet. A huge prestige win for Lockheed & a needed vote of confidence in the JSF.

We can only go with 19 instead of 75 for now, but rest assured a procurement win of 20 or so from Israel will eventually mean a few hundred JSFs sold to other countries down the road. Something the Pentagon & both Lockheed will need to bring down the cost of the jet for US use via mass export / increased production over the next two decades.

Nothing is official, but if Israel can lend abiltiy, expertise & benefit from the gigantic JSF economy of the future it is almost a certainty that the JSF will have a trump card the F-15 cannot compete with on price alone.

There are other factors at play between the two jets competing over Israeli airspace, but the JSF cost balloon was a substantial & critical one.

Related Posts:

Frozen Out: Israel Looking to Drop F-35 tender, buy Advanced F15-SE
Congrats Lockheed! – First JSF (F-35) rolls out of production
No Deal: JSF F-35 Saga Continues; Israel Still Loitering