Magellan a Winner as F-35 Issue Drags

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Lockheed Martin appears to be betting on its F-35 to be Canada’s new fighter aircraft because it recently renewed a lucrative contract with Winnipeg’s Magellan Aerospace. The company builds the horizontal tail assemblies for the controversial aircraft. It’s an expensive piece of hardware and Magellan, with BAE Systems, has been building them for 13 years. There are 150 employees dedicated to the project and over the next three years will build 60 tails a year.  The surrounding politics of the contract is dizzying at best.

It was only this week that the Lightning II was admitted to the official competition to replace Canada’s capable, but ancient CF-18s. Magellan and dozens of other Canadian companies that profit from the F-35 do so because Canada is a member of a multi-nation coalition that is jointly developing and deploying the very expensive aircraft. As long as Canada keeps making its payments to the program (which was also supposed to guarantee delivery of the fighters to the RCAF two years ago), Canadian companies like Magellan are allowed to bid on subassembly and systems contracts. After Prime Minister Justin Trudeau campaigned in 2015 to reject the F-35 as a fighter replacement candidate, a new “open bidding” procurement program for a new fighter was announced last year. The bid package included a requirement for Canadian companies to be allowed exclusive access to contracts for pieces of the winning plane. Lockheed Martin balked at that, since its own subcontracting system has been in force since 2006, and threatened to bow out. Canada blinked and the current system will stay in place for the F-35.