Lockheed to offer F-35 work to Japan firms to win bid

TransportationReuters

TOKYO (Reuters) - U.S. aerospace and defense contractor Lockheed Martin said on Thursday it will offer final assembly of the F-35 fighter to Japanese firms in a bid for a defense contract from Tokyo.

Lockheed, seeking to bolster its chances of winning a bid to supply warplanes worth as much as $8 billion to Japan, said it will also offer manufacture of major components, maintenance work and engine assembly of the F-35 to Japanese firms.

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The F-35 "has taken our industry and partners to a new level," John Balderston, the campaign director for Lockheed's bid, told reporters at a Tokyo hotel where the company was displaying a mockup of the plane.

"It will put Japanese aerospace into the lead," Balderston said, referring to what Lockheed says is its more advanced technology than rivals.

Lockheed's F-35 Joint Strike Fighter is competing for an order to replace aging F-4 Phantom fighters in Japan against Boeing's F/A 18 Super Hornet and the Typhoon, made by a consortium of European firms including EADS , Britain's BAE Systems and Italy's Finmeccanica .

Japan rarely buys European equipment, preferring to arm its military with U.S. or Japan designed weapons, and the 40-plane order is expected to go to either Lockheed or Boeing.

While the newer design of Lockheed's F-35 has an edge in stealth technology, cost overruns and schedule slips have cast doubts over its prospects.

The Pentagon said on Wednesday it expects to finish a "should cost" estimate for the next batch of F-35s this month.

Officials estimate it will cost $382 billion to build 2,447 of the jets for the U.S. military, but Pentagon chief arms buyer Ashton Carter has pledged to push that down to a far lower "should cost" level.

American arms makers have typically farmed out much of the production to Japanese companies, including Mitsubishi Heavy Industries <7011.T>, Kawasaki Heavy Industries <7012.T> and IHI <7013.T> as part of past agreements to supply equipment to Japan's army, navy and air force.

Boeing executive Phillip Mills told Reuters last month that local defense contractors could build three-quarters of the Super Hornet's components under license if Japan picked the aircraft.

(Reporting by Tim Kelly; Editing by Michael Watson)

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