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Israeli Negotiations for F-35 Bogging Down Over Costs, Technology Concerns

NEWTOWN, Conn: Negotiations between the Israeli Defense Ministry and Lockheed Martin for the purchase of advanced, new-generation F-35
Joint Strike Fighter stealth aircraft continue to bog down over the
final hurdles of unit cost and integration of Israeli-specific avionics
and armaments.
While the Israeli defense establishment complains of soaring F-35
unit costs – a completely rational concern considering the potential
defense budget cuts looming on the horizon – the real issue seems to be
the installation of Israeli-made systems onto the aircraft.

Israel’s five-year defense plan (‘Teffen 2012’) places emphasis on acquiring
advanced precision strike fighters, with the focus being on the F-35.
Under the Israeli defense plan, funding for a squadron of 25 F-35s will
begin prior to first delivery, which, based upon Pentagon and
Congressional approval in September 2008, should be in 2014. This first
squadron would then come into service two years later.Israel is
planning to purchase a further 50 aircraft in order to outfit two
additional squadrons at a later date. Originally the Israelis had
planned on purchasing 100 F-35s, but funding shortfalls forced them to
downsize their immediate plans.
Yet despite Israel’s F-35 designs, its defense establishment is now considering whether the Israeli Air Force
(IAF) can maintain its military-technological regional edge without
going forward with the JSF purchase. Upgrades to existing Israeli F-15
and F-16
aircraft, or purchasing advanced types of both platforms (including the
Boeing F-15 Eagle), are both seen as an alternative option.
This may be a smoke screen intended to extract concessions from the
U.S. for permitting the implementation of Israeli systems onto the
F-35s. The Israelis remain interested in wrapping upnegotiations for the F-35 this year, and the IAF remains highly desirous of the aircraft.
While cost is no doubt a very real concern – the estimated price tag
for the 75 F-35s is placed at $15.2 billion – much of the Israeli
funding comes in the form of U.S. Foreign Military Financing (FMF) credits, which will total $11.425 billion from 2009 through 2012 alone.
Also, the other U.S. advanced stealth alternative, the F-22 Raptor,
is not available on the export market per Congressional law. Even in
the unlikely event that this law was revoked by the Obama
administration, production on the aircraft is set to end in 2011, thus
causing its unit price-tag – already estimated at $146 million in 2008
dollars – to escalate even higher and making its cost even more
prohibitive than the JSF.
What aircraft option the Israeli Defense Ministry ultimately pursues
may depend on the time frame by which Israeli intelligence estimates
the Iranians could be capable of producing nuclear armaments.