Alternate Engine’s Jobs Argument Falls Flat

One of the common arguments made by proponents of the alternate engine for the F-35 Joint Strike Fighter is that it is good for the aerospace and defense industrial base. At first glance it seems to make sense – two engines means more jobs and businesses up and down the supply chain, right?

But what seems to be an obvious truth is actually a confusing misperception.

First, let’s talk about the importance of the aerospace industrial base overall. It’s hard to overstate how vital it is to the U.S. economy, especially in these trying times. As other industries have hemorrhaged jobs over the last nine months, aerospace and defense has held steady, with a total direct employment right around 650,000, just a small dip from the middle of last year. Estimates put the total number of jobs the industry is responsible for at 2 million, spread out among 30,000 companies in all 50 states. It’s the nation’s leading exporter, and totaled $97 billion last year. (All statistics from the Aerospace Industries Association.)

Clearly, this economic cornerstone is more important now than ever.

So what does this mean to the alternate engine discussion? The claim that the second engine will bolster the industrial base ignores the fact that the same number of engines will be bought – it’s just a question of who will build them. A second engine does not mean twice the engines.

Splitting the engine buy will also have direct negative impacts on each company involved in the program, from the smallest supplier to the systems integrators involved. Most companies in the supply chain would see a smaller piece of the overall pie than they would under a single engine provider. It trickles down – less work per supplier means reduced economies of scale and fewer opportunities for the government to save money due to size of the JSF program. A report by the Lexington Institute that delved into the alternate engine issue said that “split procurement and sustainment is intrinsically less efficient …” barring extraordinary circumstances. The report concluded that dividing the F-35 engine buy will make the program and companies involved less efficient, and pointed out that this is not the usual goal associated with strengthening the industrial base.

Curiously, some recent remarks by members of Congress questioned the importance of protecting the defense industrial base, saying that contract decisions should not take jobs and other factors into account. Luckily, that opinion is squarely in the minority. In fact, AIA just released a report pressing for industrial base impact to be a factor in the Quadrennial Defense Review, which is due to be released this fall.

There’s one more significant misperception about the alternate engine when it comes to the issue of supporting the U.S. industrial base. As much as 20 percent of the work on the alternate engine is going to occur in the United Kingdom. Talk about not helping the U.S. defense industrial base.

What do you think? Would splitting the engine buy hurt or help the aerospace industrial base? Weigh in with your views in the comment section.