Sunday, February 12, 2012

Italy F-35 Cuts Announcement Possible This Week

ROME — An Italian government cabinet meeting on Feb. 14 is set to discuss cuts to defense programs that could include a trimming of the number of Joint Strike Fighters the country buys.
Feb. 12, 2012 - 06:03PM |

Italian defense minister Giampaolo di Paola will then detail the cuts in an address to the defense commissions of the lower house and Senate of the Italian parliament on Feb. 15.

Di Paola has been hard at work formulating cuts since austerity budgets late last year chopped 28 percent off 2012 defense ministry spending. Di Paola may attempt to cut about 40,000 troops from the Italian military’s official headcount of 190,000 to reduce wage bills.

An idea of what is coming was provided by Italy’s Supreme Defense Council, which groups senior ministers and the Italian president and meets occasionally. After a session held last week, the council said that Italy would need to cut troop numbers and seek to integrate its military more closely with other European forces, which would help stimulate “the process of economic and institutional integration within the European Union, which is truly fundamental for the future of our country.”

Attention will also be focused on the JSF program, with a cut from 131 to about 100 aircraft seen likely. The Defense Council warned of cuts to “some significant investment programs.”

The JSF program, with an expected outlay of 15 billion euros, has come under political attack in Italy as Monti cuts spending and raises taxes to tackle an economic crisis.

In response, senior defense procurement office officials addressed the defense commission of the lower house on Feb. 1 and 7 to talk up the program, on which Italy is a partner, Italy’s procurement chief Gen. Claudio Debertolis said Italy was set to order three initial aircraft – down from four — for $240 million (182.2 million euros), which would be the first aircraft off the final assembly and check out line for the JSF that Italy is building at Cameri Air Base in northern Italy.

Work on stealth coatings for the aircraft would be under U.S. control at Cameri, he said, but “it is clear that the moment this technology is released, we will be the first to have it, since it is our national territory.”

Gen. Domenico Esposito, the procurement office’s director general for aeronautics programs, said that Italian firms had to date won $539 million in contracts on the program, of which $222 million had been won in 2011. Total work on the program could reach $14 billion, he added.

While 11,000 staff were now working on the Eurofighter in Italy, he added, the JSF program would employ 10,000, including 1,500 at Cameri, which will be run by Finmeccanica unit Alenia. A smaller firm, OMA in central Italy, has invested 5 million euros in new facilities where it will work with titanium components, and it is now hiring, he said.

Eurofighter Woes

Debertolis was gloomy about the future of the Eurofighter program, stating that “unfortunately, India has shown that the cost of the aircraft — the competition was lost above all on cost — as well as the air-to-ground capabilities are factors in making the aircraft uncompetitive.”

Speaking during the second session before the commission on Feb. 7, Debertolis said the JSF would cost Italy less per aircraft than the Eurofighter, which had cost 79 million euros per aircraft.

The loss of the India competition would now hasten the end of Eurofighter production, he added, but there would be a migration of staff from that program to the JSF in Italy. The figure of 10,000 working on the JSF was a “guaranteed minimum,” he said.

By building the Cameri line, Italy would eventually allow Italy access to U.S. technology that hitherto the U.K. has accessed first thanks to its close relationship with the U.S.

Even if Italy’s order was “much lower” than the proposed 131 aircraft, he said, Italy’s “entrepreneurial decision” to offer assembly work to other JSF partners, starting with Holland, would help keep the facility going.

Alenia is working as a second source provider of wingboxes for the aircraft, with more than 1,000 to be constructed. But Debertolis said that Alenia’s costs were proving a headache.

“We have the problem that Lockheed Martin is asking a very low cost from Alenia, which is inferior to the costs that Alenia can achieve,” he said.

That, he added, could threaten Alenia’s ability to invest in the program.

“It is normal that Lockheed Martin has lower costs having started earlier. But Alenia’s learning curve on the wings is starting. It is our job to ensure returns because otherwise, if there was no return on the wings, it would create a serious problem that would become political,” he said.

Without being specific, Debertolis said an agreement on the subject would be reached in the next few weeks.

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