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Dassault’s Rafale making strong push to trump F-35

Dassault leads the French consortium that makes the twin-engined Rafale
for the French air force. The Rafale, unlike the F-35, has been
combat-tested in Afghanistan, Libya and Mali. Although not yet sold
outside France, India has announced plans to buy the Rafale on the
strength of pledges to transfer the technology. The agreement provides
that 108 out of 126 Rafales will be built in India, not France.

A similar deal with Canada would allow major components to be
manufactured here, according to Dassault's vice-president, Yves Robins.

"Should the Canadian industry wish to assemble or produce part of the
Rafale in Canada, we are fully open to it," Robins told CBC News in
Montreal.

Robins said the "intellectual property" associated with
the Rafale would be part of any sale, including the source codes for the
fighter's computer system as well as the know-how to adapt and update
the aircraft — both hardware and software — throughout its lifespan.

"The Rafale will be Canadianized," said Robins.

This would mean, he said, "transfer of technology to the Canadian
industry, creating high-value jobs and integrating the Canadian industry
in the global supply chain."

Robins said the jobs created in Canada would far exceed those that would flow from a purchase of the F-35.

The Rafale's backers dismiss concerns that a French plane will not
work well with U.S. forces, saying it did just that in both Afghanistan
and Libya. They add that its attachment points for bombs and missiles
are built to NATO standards.

Even so, the Rafale offer suggests the contest for billions of
dollars in fighter sales to Canada is increasingly focused on the
spinoff benefits — meaning, jobs on the ground — and less on how the
competing planes perform in the air.

All the rival fighters claim to be fully capable of conducting
sovereignty patrols in the Arctic, as well as combat missions such as
the overthrow of Libyan dictator Moammar Ghadafi in 2011. Canada's
CF-18s took part in that operation, but are due to retire over the next
five years.

Prime Minister Stephen Harper's governing Conservatives had picked
Lockheed Martin's F-35 stealth fighter to replace them, until the
government's lack of candour about the cost provoked a political storm
and a scathing report by the auditor general in 2012. That forced the
government to retreat, saying it would "hit the reset button."

After years of delays and cost overruns, the F-35 program
is still in its early stages. Canada's fighter purchase is now going
nowhere as the government tries to decide whether to stick with the F-35
or to hold a competition with some or all of its rivals — the Boeing Super Hornet, Dassault's Rafale, the Eurofighter Typhoon and the Saab Gripen.

By coincidence or not, the Dassault bid comes a month after the
Canadian government announced a new procurement strategy emphasizing the
creation of jobs.

Discussing the plan in Vancouver last week, Public Works Minister
Diane Finley said, "The whole idea behind it is, anyone who is competing
on the procurements, the various ones, has to make sure that they are
investing in Canada — that Canada's getting benefits."

Dassault says that's exactly what it is doing, and that it already
has a supplier network in Canada, led by Thales, a French multinational
specializing in aerospace and defence hardware. The Thales plant in
Montreal produces actuators that move the flaps on the wings of the
Rafale.

Thales Canada CEO Mark Halinaty told CBC News that the company
employs 1,300 Canadians, and that an influx of French military
technology could be exploited for growth in many other fields. Already,
Thales makes control systems for commercial aircraft, railroads and the
Canadian Forces.

"It's not just about transferring technology and know-how for a particular program," said Halinaty.

"What that does is provide us with the expertise which allows us to
develop our own Canadian-originated projects, which we can then export."

Robins, the Dassault VP, added that "we are not only limiting this offer to the Rafale."

Robins said that Dassault's partnerships with hundreds of other
French companies will allow it to include Canadian industry in other
high-tech projects — in space, unmanned drones and avionics. This, he
said, would be "a guarantee of activity amounting at least to the
equivalent of the procurement budget for the aircraft — and going much
further later on."

To date, the Canadian government has budgeted $9 billion for the
purchase. Robins said Dassault would promise in writing to invest that
much in Canada.

"This is a commitment. A contractual commitment, even with penalties
written in the contracts. We are not saying the Canadian industry could
potentially, maybe go up to $10 (billion) or $11 billion by bidding for
such-and-such contracts. We are saying we guarantee this return to the
Canadian industry. It's a totally different philosophy from some of our
competitors."

That's a direct shot at Lockheed Martin, which says it will offer
Canadians the chance to bid on "$11 billion in opportunities" over the
life of the F-35 program. There's no guarantee that Canadian firms would
win those contracts.

Even so, Lockheed Martin vice-president Steve O'Bryan says he has
already signed $600 million in contracts to build parts of the F-35 in
Canada.

"These are real contracts … all before Canada has even decided on a single airplane," O'Bryan told CBC News.

"This isn't mundane work. This is software, this is avionics, this is
composite work. These are the technologies in the aerospace industry
you need for years to come."

In the Ottawa suburb of Gloucester, a small company called GasTOPS is
one of Lockheed Martin's 70 Canadian suppliers. Having developed a
specialized sensor for another stealth fighter — the top-secret F-22 —
GasTOPS now makes an updated version for the F-35. It's an early-warning
system that checks the oil flow for microscopic pieces of metal which
might indicate a looming engine failure.

Although the devices are worth $5,000 each, the F-35 production line
is still not rolling at full speed and Lockheed Martin has only bought
500 of the sensors so far. But GasTOPS has expanded into a much larger
market for the same sensor: for wind turbines, which are in use all over
the world.

Dave Muir, the CEO of GasTOPS, says "the key thing is these are
knowledge-based, what you would call highly qualified, professional
jobs. These are jobs that are hard to come by. They're hard to create."

Of course, Dassault is not Lockheed Martin's only rival. Although the
Eurofighter and Saab bids are not seen as strong contenders at the
moment, Boeing's Super Hornet, like the Rafale, has combat experience
and lower operating costs than the F-35. It's an updated version of the
CF-18s Canada currently uses, which Boeing says implies an easier
learning curve for Canadian pilots. The U.S. has bought dozens of Super
Hornets to bridge the gap until the F-35 reaches full-rate production.

As a global aviation company, Boeing also has a network of 200
suppliers in Canada and, like Dassault, dismisses Lockheed Martin's
offer on jobs as inferior.

For now, though, all the fighter companies interested in Canada's
business can only wait for the government to make a decision: will it
hold a competition, or not? And will its decision reflect the commitment
to Canadian jobs, or not?