(Adds F-35, Boeing (N:BA) comments, further background)
By Andrea Shalal
WASHINGTON, Oct 20 (Reuters) - The election of Canada's
Liberal leader Justin Trudeau as prime minister spells bad news
for Lockheed Martin (N:LMT) Corp's LMT.N F-35 fighter jet program
given Trudeau's staunch opposition to any F-35 purchases, U.S.
industry and government sources said on Tuesday.
Trudeau's election offers hope to Boeing Co BA.N , whose
F/A-18E/F fighter jets are nearing the end of production and
could be considered to replace Canada's current aging CF-18
fighter jets.
Industry executives and government officials said there
would be difficulty ahead for the F-35 program.
Trudeau last month said that, if elected, his party would
launch an open and transparent competition to replace Canada's
older aging CF-18 jets with more affordable aircraft. He said
his government would not buy any F-35 jets. urn:newsml:reuters.com:*:nL1N11Q0Q0
Pentagon data show the last batch of F-35 A-model jets cost
$108 million each, although that price is slated to drop to $85
million by 2018. Boeing's F/A-18E/F currently costs $60 million
per aircraft, according to the U.S. Navy.
For now, Canada remains one of the nine countries in the
initial F-35 partnership. It pledged to invest $150 million in
the program's development when it signed up in February 2002.
Those funds will not be reimbursed if Canada exits the
program. Many Canadian firms that supply parts worth hundreds of
millions of dollars to Lockheed each year could also lose those
orders, according to two sources familiar with the program but
not authorized to speak publicly.
Lockheed and the Pentagon's F-35 program office said they
had not been notified by the Canadian government of any change
in its status as an F-35 partner.
Boeing said it supported competition for the CF-18
replacement to ensure the best value for Canadian taxpayers and
the greatest benefits to Canadian industry.
Canada's ruling Conservatives announced plans in 2010 to buy
65 F-35 jets, but scrapped those plans in 2012 after a probe
found officials had played down the costs and risks of the deal.
A subsequent review found that Lockheed's F-35 scored the
best on various tests, but Boeing's F/A-18E/F Super Hornet was
almost as capable and cheaper. urn:newsml:reuters.com:*:nL1N0R5350
The 65 aircraft orders at stake could amount to well over $6
billion in revenue for Lockheed, engine maker Pratt & Whitney, a
unit of United Technologies Corp (N:UTX) UTX.N , and other key F-35
suppliers such as Northrop Grumman Corp (N:NOC) NOC.N and Britain's
BAE Systems Plc BAES.L .