Tough Choices Ahead for Japan’s F-XX Procurement

Defense News has just published a story that I did last week on the post F-35 choices Japan faces for its F-XX procurement. This was very interesting to write and research, as so much is “up in the air” and there are so many unknowns.

Unusually, Lockheed Martin refused to comment (Steve O’Bryan has been on the offensive recently emphasizing the positives with the F-35 program) while BAE’s Tony Ennis was happy to comment.

Questions include:

– Could there be some work for the Eurofighter after all? Will Japan feel bruised and abused if the F-35 turns out to be a poisoned chalice. (History of course is not on the Eurofighter’s side. The F-2, which became the thin edge of the wedge for the FSX procurement as the F-2 weighs in about 4X cost of a Block 50/52 F-16).

– What of the Mitsubishi ATD-X Shinshin? Is this as many believe a hedge or is it a complete waste of time and money. Is Japan really up for, and up to using this program as a hedge? Can MHI and TRDI really bring anything to the table.

Talking to analysts, the story would seem to be no. According to the excellent Prof. Narushige Michishita for one, the fact that Japan’s DBI is now non-competitive and falling away in technological ability (with analysts such as Kiyotani more or less calling the F-35 purchase an act of suicide), after failing to secure the F-22, Japan used the international RPF for the F-X in order to squeeze a better deal out of the U.S.

…and failed, or so it would seem to critics.

This question about the ATD-X revolves around the point that Japan seems to have felt compelled to buy the F-35 for fear of falling so far behind U.S. technology that it was prepared to swallow an industrial participation deal that many doubt will help Japanese industry to a 5th-generation fighter design and build capacity. Of course the U.S. probably doesn’t feel it wants Japan to have a 5th-generation fighter design and build capacity. But the days when Japan could bring technology, muscle, will and money to the table a la FSX seem to have long vanished. Meanwhile a recent internal report by MOD itself (see Japan’s Defense Industrial Base Nearing Crisis) has underscored just how much Japan is waking up to fundamental problems with its defense industrial base.

Interestingly for me,  Dr. Patrick Cronin at theCenter for a New American Security believes that that  F-15SE or the F-18 Super Hornet would still be great buys for Japan for the present, but should really go for it for a sixth-generation fighter.

“Either the F-15SE or the F-18 Super Hornet would be value added without breaking the bank.  Meanwhile, Japan needs to develop an F-XX future fighter that can defeat world-class defenses and aircraft out to the middle of this century and perhaps beyond.  That means Japan should be seeking to develop, possibly with an American partner, a sixth-generation aircraft with advanced stealth characteristics, directed energy weapons, and an unmanned option.  Thus, by the middle of next decade, JASDF would have two fighters (F-35s and either F-15SEs or F-18 Super Hornets).  It would then be preparing to field a sixth-generation F-XX.”

In addition to the Defense News version, here is the full interview with the  wonderful Paul Giarra at Global Strategies & Transformation whom along with Dr. Cronin, I would like to thank deeply for sharing some of their considerable insight and knowledge.

“JASDF fighter aircraft procurement beyond the 42 F-35s planned is a vital strategic issue for Japan.  In my view, Japan needs the best air force it can possibly get, for the defense of Japan as well as for alliance operations.  Unfortunately, even though Japan is normalizing militarily and responding to the emergence of China by revising its entire defense strategy, there is no aerospace strategy rationale in place to shape a positive outcome.

When Japan wanted to procure the F-22, there was no argument available to overcome legitimate export restrictions imposed by the U.S. Congress.  No one — whether Japanese or American airman or air power proponents — could argue that the Obey Amendment should be overturned, because there was no strategic rationale in hand for doing so.  That’s not to say that there could not be a compelling rationale for the F-22 or another equally good aircraft (Japanese or American), but there is no developed and deployable strategy, no vision, no operational basis for planning or procurement.

As for the F-35, I would say that 420 aircraft is as good a number as 42, because it is as arbitrary as 42, but at least with ten times the aircraft Japan would have a strong and credible air force.

As for particular aircraft, responsible airmen should have a vision of future air combat — we’re talking much more than a decade before any substantial number of new aircraft are available to JASDF.  Does an aircraft have to be a fifth generation, stealthy, and capable of super-cruise performance in order to meet the needs of JASDF?  What are those needs in the first place?  Will JASDF be flying directly overhead, defending Japanese airspace? Against what threats?  Will the JASDF be patrolling and fighting at the far periphery of Japan’s islands?  Will the JASDF be drastically outnumbered? What is the worst case?  The most likely case?  Will superb BVR missiles and air warfare command and control be sufficient, enabling a less capable aircraft?  What will be the operational relationship between JASDF and the U.S. Air Force?  Will alliance roles and missions influence, or even dictate, aircraft choice?  In this context, the Air Sea Battle concept looms large as a significant consideration going forward for JASDF and USAF planners.

How much time does JASDF have to make a choice and bring its new fleet of aircraft on line?  Is there a virtue to procuring relatively readily available F/A-18 Super Hornets or substantially re-designed F-15s?  Can Japan afford to wait?  Should JASDF skip ahead to some new combination of armed UAVs, or instead depend much more on very long range SAMs for territorial IAMD?  Are there new technologies or concepts on the horizon that are worth waiting for?

These are the sorts of questions that have answers if the JASDF and alliance aerospace strategy and air combat vision are in place.  There always will be tradeoffs between aircraft, but technical judgments and an informed choice can be made on the basis of a strategy, vision, and substantial and well developed roles and missions.

In the meantime, there are real industrial considerations on the table that never before have been factors.  With the relaxation of the three arms export control principles, it is possible for the first time for Japan’s aerospace industry to approach its American counterparts in a fundamentally different way that was never before possible:  as partners rather than consumers.  This adds a new dimension to JASDF’s procurement challenge.  In the long run, understanding and optimizing these new defense industry circumstances probably is as important as the aerospace strategy and vision.

It is natural that aircraft manufacturers paying suit to JASDF want to sell the aircraft they have developed.  Nevertheless, the most competitive will develop the aerospace rationale for JASDF’s new air fleet, and offer a strategic partnership that provides the air defense that Japan needs.

Japan’s Defense Industrial Base Nearing Crisis

I haven’t been doing much work for the media recently as I focus on research but Defense News asked me to write on this subject for their Global Top 100 annual report, so it was my pleasure. Here is the short version of the work that I did for media purposes.

It’s grim. You get the picture, right. Actually I am following this up with another article soon. Apart from watching the Space Law saga (it might not pass Thursday, when the normal Diet session was due to have ended, but for the extension announced Monday) was happy to see that Mr. Tanaka, who is probably a very nice man, will be enjoying the rest of his career elsewhere and not in the MOD (c.f. my piece in Defense News: New Japanese DM Part of Move To Shake Up Leadership).

Anyway, here is the piece for Defense News: Japanese Defense Market Battles Flat Spending

Details Scant on Anglo-Japan Defense Cooperation

Japan’s leading daily, the Yomiuri Shimbun, has a long editorial (see Japanese-British security ties must be strengthened) on UK PM David Cameron’s meeting with Japanese PM Yoshihiko Noda on Tuesday, but details of exactly what the potential partners are going to cooperate on remain scarce.

BAE M-777

BAE Systems M-777

My sources tell me that there is quite a bit of regret in some sections of Japan’s political and military establishment for choosing the Lockheed Martin F-35 Lightening II multirole fighter over the Eurofighter Consortium’s Typhoon, whose development is being led by BAE Systems. Analysts not troubled by ties to the U.S. who seem pretty neutral, question last December’s decision to buy American after a long and lengthy RFP say that the Typhoon, which while expensive could work out considerably cheaper than the F-35, would have actually suited Japan’s needs more.

With the cost outlook for the F-35 seeming to worsen every time you care to look, (see  Japan F-35 deal unchanged, Japan May Cancel F-35 Buy if Cost Rises, or just Google search “F-35 Canada”!)  one senior source in the UK Defense establishment called Japan’s purchase of the F-35 not so much a license to assemble the vaunted but troubled 5th generation stealth fighter so much as “a license to write a blank check” to the Americans.

The article reaches the same sort of conclusions Andrew Chuter and I printed last week:

“Small equipment, such as chemical protective suits, is considered a strong candidate at the initial stage of the joint development between Japan and Britain. The British side suggested a helicopter as a candidate. We hope the two countries will study and select a program advantageous to both countries.”

The article also contains some disturbing information about those perpetually cast Japan as some sort of nationalist warmongering nation not weaned of/ harboring secret intentions to regain past imperial pretensions aided and abetted by the U.S.

“To the Defense Ministry’s knowledge, 35 tank-related companies, 26 vessel-related companies and 21 fighter-related firms have either withdrawn from the defense industry or gone bankrupt since 2003.”

Japan Begins Building Technology Demonstrator Fighter Shinshin

As one commentator on my story said, by the time the the F-35 is perfected and the Shinshin is flying, the U.S. will probably let Japan have the F-22 anyway, as it will be old hat by then. That’s a very cynical point of view as the F-35’s troubles continue, mainly in terms of cost growth.

 However, Japan is being sensible, at least on the surface of it. Whether or not TRDI and MHI can deliver on the Shinshin is an issue that is going to emerge over the next three or four years. The TRDI is often criticized for being too research orientated and not product driven. Questions about the Shinshin include just how much stealth technology will the DOD let Japan have. After the FSX debacle, Japan’s strategy has been to make sure it keeps at the edge of certain elemental technologies and subsystems while not remaining too far behind on systems technology just in case. So what sort of hedge is Shinshin? An interesting question. And what sort of leverage will it give Japan if any against the F-35?

Anyway, here is the brief story I put in for Defense News.

Chinese hackers stole U.S. F-35 stealth fighter jet details

Here is a report out of London (AGI) about what quite a few of us expected if true; F-35 data has been stolen by Chinese hackers. Here is the story and link.

(AGI) London – Chinese spies hacked into computers of British Aerospace (BAE) stealing details about the US F35 fighter jet.

When pictures of China’s first stealth fighter jet (the J-20) were circulated in late 2010, analysts all over the world were impressed with the progress made by Beijing in terms of aeronautical technology. Today, the Sunday Times reported that Chinese hackers managed to infiltrate computers of Britain’s biggest defence company, British Aerospace, to steal details about the Pentagon’s latest stealth fighter jet, the F35, which is still at the development stage. . .

Actually it is suspected by my Sensei at Keio University G-SEC, Motohiro Tsuchiya, that the partially successful cyberattack on MHI last summer may have also have yielded up some missile defense and nuclear power plant data. As most readers will know, MHI is a key contractor in the U.S.-Japan SM3-Block-IIA development program. Here is the draft of a story I wrote for Space News last November that was killed…

BEGIN TEXT

PAUL KALLENDER-UMEZU, TOKYO

Highly sensitive military data related to a number of space, aerospace and other programs may have been netted by hackers in a cyber-attack on Japan’s largest military contractor, Mitsubishi Heavy Industries (MHI) this August, according to a senior cybersecurity expert here. The attack on MHI is just one part of a amid a wave of increasingly sophisticated assaults targeting top Japanese government institutions and corporations that is prompting a government effort to improve national security that have come to light in recent weeks.

MHI discovered viruses were at 11 locations across Japan, including plants that build missiles, jet fighters, the H-2A and H-2B launch vehicles, submarines and nuclear power reactors meaning that information stolen could include details of the SM-3 Block IIA advanced ballistic missile that is part of a joint research program between Japan and the U.S., according to Motohiro Tsuchiya, a professor at Keio University and member of the Information Security Policy Council, a top-level government cybersecurity advisory body here.

“Yes, it’s possible. The sponsors behind the attack will be trawling the data right now,” Tsuchiya said in a November 5 interview.

The attack came to light in September when it was revealed that 45 servers and 38 PCs had been infected by 8 or more types of viruses after employees had unwittingly opened e-mails containing malware. On October 25, in a statement, MHI conceded data had leaked out of the company’s network after a month saying there was no evidence of such a breach.

Hideo Ikuno, a spokesman for MHI declined, November 9, to comment on the issue, or local media reports that the company has up to 50 types of viruses in its systems.

The situation has angered Japan’s Ministry of Defense, which only found about the issue after the story was leaked to local media. Contractually the MOD should have been informed immediately of any security breach, said ministry spokesman Takaaki Ohno.

“It is very regrettable that MOD was not informed, and we lodged a protest to MHI. We reprimanded MHI severely over the cyber-attack incident, and MHI promised to promptly and steadily deal with an investigation and the prevention of recurrence,” Ohno said, November 9.

Over the past eight weeks Japan has been awash in revelations about cyber attacks on its leading companies and institutions.

IHI Corp. and Kawasaki Heavy Industries, both major space and military contractors here, have confirmed they had also been also been targeted in August in similar attacks to those on MHI. In late October, Chief Cabinet Secretary Osamu Fujimura revealed the Foreign Ministry and some Japanese embassies had been under attack since June. Local media also reported computers and a servers used by three members of Japan’s Lower House had been hacked and passwords and usernames of around 500 staff had been compromised.

Attacks on the MOD have been unsuccessful to date, Ohno said

Tsuchiya said the media reports only represent a tiny fraction of the waves of increasingly sophisticated and subtle attacks that began this January by suspected hackers in China when virus and Trojan laden e-mails sometimes revealing an astonishing ability to plausibly impersonate legitimate communications started hitting Japanese systems. The attacks on Japan followed earlier assaults on the U.S. Government on July 4, 2009 and then South Korea, with attacks on the Blue House and leading South Korea companies by mounted by suspected North Korean hackers, he said.

“The recent tactic has been attacking peripheral institutions with lower security and then getting in behind the lower barriers, for example by attacking think tanks. When this year started, everyone knew something was wrong,” Tsuchiya said.

Recent attacks are causing Japan to bolster its cybersecurity measures, not least the MOD. Ohno said at the Japan-U.S. Defense Ministerial Meeting on October 25, the ministers reaffirmed the significance of Japan-U.S. cyber strategy policy discussion, and decided to share information between defense authorities more closely.

“Information security is extremely important for the MOD that is in charge of this country’s security, and we intend to strengthen our response to cyber-attacks,” Ohno said.

The government will also launch framework that will share information on cyber attacks and discuss defenses among private and public sector participants, said Tsuchiya.

“MHI’s defenses should be very good but there are always holes and weaknesses and the real weakness with the targeted e-mail is the human link,” Tsuchiya said.

END TEXT

Japan F-35 deal unchanged…says David Venlet

Just seen an article from Reuters; Navy Vice Admiral David Venlet, who heads the Pentagon’s F-35 program office, has assured Japan, one of the first two foreign countries outside the eight original international partners to buy the stealth fighter, that the terms of its agreement in December to buy 42 F-35s would not change as a result of the Pentagon’s announcement that it would delay US orders for 179 of the fighters.

“Their deal is firm,” Venlet is reported to have told  a defense conference hosted by Credit Suisse and defense consultant Jim McAleese in Turkey.

At the same conference, Venlet is also reported to have admitted that per-unit costs of the F-35 will rise because of the delay, although he declined to quantify the changes. He also said the U.S. was still on course to order 2,443 fighters.

Background: earlier this year the Pentagon said it was postponing orders of  179 F-35s to save $15.1 billion through fiscal year 2017, and allow more time for development and testing, provoking international concern, not least from Japan. As I reported in Defense News a few weeks back (see Japan May Cancel F-35 Buy if Cost Rises), Japanese Defense Minister Naoki Tanaka said Japan could cancel orders for F-35 jets if the price rose. Japan is due to pay 9.9 billion yen ($121.62 million) per fighter for an initial four F-35s scheduled for delivery by March 2017. Japan had sent a senior defense official to the United States to demand that the US stick to the price and delivery date for F-35 fighter jets.

“We can look national leadership in the eye and say, ‘Your deal is good, with the (terms) that you were offered,'” Venlet is reported to have told reporters after his speech at the conference, referring to his conversations with Japanese leaders.

Japan May Cancel F-35 Buy if Cost Rises

This February 27 article was widely copied by the major wire services once they woke up and realized it was a story. Actually the Sankei broke it early in the week, but I could feel acute stress from Lockheed Martin a few weeks earlier when they were talking about how good they were going to make the deal for Japan.

The fact is that Japan has no offset experience or culture. Sure Japan has some for space development with the International Space Station for which it is providing JEM, but it was not given the best of bargains. If I ever have time, I will one day write the story of the “battle of the centrifuge,” with the excellent Dr. Yasushi Horikawa. That aside, Japan has no legal or experience framework to structure an offset deal with the U.S. and it’s the clearest sign that if Japan wants to truly step forward into the arena of military offset, then it needs to shoot up a steep learning curve faster than Major General Chuck Yeager.

Anyway, here is what I wrote up for Defense News. The protests are clearly for public consumption. Except they are not!

Japan Assessing Lockheed Offer To Assemble F-35s

You couldn’t make it. We’d been hearing a lot of rumors about discussions between Japan and the U.S. and MHI and Lockheed Martin about the terms of the offer for local assembly and build of the 38 F-35s agreed to by Japan last December, with the whole deal looking increasingly contentious following the DOD’s decision to slow down its procurement of the JSF. This led to shockwaves around the world as JSF partners and many other countries considering the F-35 were given more food for thought to reflect on the decision. I’ll keep my own counsel on the F-35, but it is clear that in the following weeks Japan needed to vocalize and publicize its misgivings.

Here is a special report written by Wendell Minnick that I contributed to, followed by my story, published in February in Defense News.

Japan Delays F-X Announcement

Given the strategic importance and Alliance issues attached to the purchase of the F-35, Defense News asked me to wring every last drop out of this story. As stopped being a full-time journalist in 2002, December was an interesting month!

Japan To Launch Much-Delayed F-X Contest

Again, here is anearlier story I did (back in March 2011) with esteemed colleague Wendell Minnick about the earlier stages of the F-X RFP…

TOKYO and TAIPEI – After years of vacillation, Japan’s Ministry of Defense (MoD) plans this month to formally launch a $10 billion purchase of 40 to 50 fighter jets, a program that could make or break the country’s ability to manufacture combat aircraft.

The F-X program will release a request for proposals March 28, sources in Tokyo said. Bids will be due Aug. 31, and a contract awarded at the end of this year, they said.

The competition will be closely watched by the Japanese defense industry. Unless some of the F-X planes are produced in Japan under license, the country faces its sunset as a maker of fighter jets. Production of Mitsubishi F-2s, the country’s only active fighter line, is to close in September.

A deal to make at least some of the F-Xs will prove very profitable for local industry, “but no licensed production will be tantamount to disaster,” a Japanese defense industry source said. “We have excellent engineers, and a generation of skills will be lost.”

Three competitors are expected to vie for the contract: the Boeing F/A-18 Super Hornet, Eurofighter Typhoon and the Lockheed Martin F-35 Joint Strike Fighter (JSF).

Boeing and Eurofighter are set to offer licensed production in their bids, but Lockheed may be unable to do so. Japan is not a member of the multinational JSF partnership, thanks to its self-imposed ban on making defense items for export.

Attempts by Japan’s defense industry to repeal the ban have met stiff resistance from pacifist political opposition groups.

This makes licensed production of the F-35 nearly impossible in Japan, said Satoshi Tsuzukibashi, director of the Office of Defense Production Committee at the Japan Business Federation, or Nippon Keidanren.

And that could finally scuttle the Japan Air Self-Defense Force’s (JASDF) dreams of buying a fifth-generation fighter. The F-X program was supposed to launch in 2007, but officials delayed it in hopes that the U.S. would allow Lockheed to export the F-22. When those hopes were dashed, Tokyo set its sights on the F-35, only to see the JSF effort dogged by delays and cost overruns.

“The delay of the RfP last year was somewhat because of the delay of the F-35,” Tsuzukibashi said.

Despite the doubts over licensed production, Lockheeds plans to compete for the F-X, offering some form of industrial participation, said John Giese, the company’s senior manager for international communications. He said the F-35 “meets Japan’s F-X acquisition timeline, both to support the F-X model selection decision to be made in 2011 and for delivery of aircraft and sustainment to meet JASDF’s F-X delivery requirements.”

But for the Japanese defense industry, licensed production remains the bottom line.

Industry “will happily accept the MoD’s decision for any of the options on the table, as long as the MoD secures licensed production,” said a senior Japanese defense industry source, who added that Tokyo must “do all it can to convince the U.S. to allow for technology transfer and licensed production if the MoD does opt for the F-35.”

If not, the source said, defense industry favors either the F/A-18 or the Typhoon as a matter of survival.

Boeing and Eurofighter are taking advantage of these fears.

Boeing would offer Japanese industry opportunities to develop and produce the F/A-18, including options under the new Super Hornet International Roadmap capability program, said Joe Song, Boeing’s vice president of Asia-Pacific business development.

“We believe we can offer a substantial package to Japan that enables it to sustain and advance its defense aerospace business for follow-on development,” Song said.

Kory Mathews, Boeing’s vice president for F/A-18 and EA-18 programs, noted that Boeing had brought Japan licensed production of the F-4EJ and F-15J.

But the Super Hornet faces stiff competition from the Typhoon, the first serious effort by a European fighter to unseat U.S. dominance in Japan. Tsuzukibashi said Eurofighter officials have been promoting it as a flexible, inexpensive alternative to the F/A-18 and F-35, and they believe it has a good chance of winning.

A European industry source in Japan said technical export restrictions hamper F-35 exports, while Eurofighter has “no blackbox policy,” which means wider options for Japanese industry participation.

A senior Japanese defense industry source said, “The Eurofighter people are always talking about full disclosure technology for production and technology transfer to Japanese industry and the MoD. The guys from BAE are very hard workers … very enthusiastic for promoting the Eurofighter option for the F-X.”

Eurofighter has teamed with Sumitomo, a major Japanese integrated trading and investment enterprise, to fight for the F-X contract.

Yet the Japan-U.S. military alliance and pressure to procure a U.S. fighter may keep the MoD from picking a European fighter, Tsuzukibashi said.

The F-X will replace Mitsubishi F-4EJ Kai Phantoms due to begin retiring in 2015. Tokyo is also considering buying more fighters to replace F-15Js in the next 10 years. That could increase the number of F-X fighters to 150, lowering the cost of manufacturing in Japan.