Hey there, time traveller!
This article was published 14/5/2019 (283 days ago), so information in it may no longer be current.
While the federal government continues to refine a final request for proposal for the purchase of a new fleet of fighter jets, Winnipeg’s Magellan Aerospace will be ramping up production on a large part it has been making for the Lockheed Martin F-35 Joint Strike Fighter for the past decade.
On Tuesday, Magellan received a continuation on the ongoing contract from BAE Systems to make horizontal tail assemblies for the conventional takeoff and landing version of the F-35.
Magellan has been making the large assembly since 2006 out of its St. James plant. It last received a continuation on the contract two years ago.
About 150 workers at Magellan are dedicated to that one job and according to Scott McCrady, Magellan’s corporate F-35 program director, "there is great potential going forward on the platform."
In fact, Magellan continues to be the largest Canadian supplier to the F-35 fighter jet manufacturing process. It is responsible for supplying the tail assemblies for about 50 per cent of conventional takeoff and landing versions of jets which are expected to eventually number about 1,000.
Magellan made a considerable investment to be able to handle the work, and over the next couple of years, production in Winnipeg is expected to ramp up to 60 units per year. Over the life of the contract, Magellan expects to book at least $1.5 billion in revenue on the work.
"It has been a very good piece of work for us in that there has been a number of new technologies inducted into operations at Magellan," McCrady said.
The work over the past decade has taken place while the government in Ottawa has waffled on its commitment to buy the fighter jets originally designated by the former Harper government to take over from the Royal Canadian Air Force’s fleet of aging F-18s.
After initially rejecting the F-35s, the Trudeau government has since reconsidered and instead will issue a formal and final RFP, likely in the next few weeks, to a pre-qualified group of aircraft manufacturers including Lockheed Martin, Boeing, Saab and Eurofighter.
Although Canada has been an original member of an international consortium that has worked at developing the F-35, there has been much uncertainty about whether Canada would actually make the multibillion-dollar acquisition of that model.
But even so, it has not affected Magellan’s ability to continue working on the program.
Having said that, McCrady noted Magellan is keenly interested in the RFP process.
"Magellan does care about the Canadian government’s intention. It is still important that the government maintains its partnership in the program," he said.
"We would be far more comfortable if and when the F-35 is selected out of the competition."
Last week, some leaked correspondence between U.S. government officials and Public Service and Procurement Canada revealed a further stumbling block. The Canadian government intended to include in its RFP the requirement that the winning company make substantial investments in Canada.
Lockheed Martin said it would not compete in the process if that was the case.
According to those reports, the Canadian government has now modified that requirement in the RFP.
But as a member of the F-35 consortium, Canadian companies like Magellan have had the right to bid on supply contracts.
While Magellan has been the most successful to date in that regard, it has been reported that over the past 12 years, Canadian companies have earned US$1.3 billion for their work on building F-35 parts.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.