Apex Industries Inc is the most recent firm from Canada to join hands with Lockheed Martin (NYSE: LMT) in developing the F-35 Lightning II program. The contract agrees to the use of Apex's aluminium metallic parts that make up the wing and the forward fuselage. The agreement was described as a "multi-year" contract with all the work to be done at the New Brunswick, Moncton-based Apex facility.
The contract with Apex is the latest example of Lockheed's maneuver to collaborate with Canadian partners in the F-35 programme. So far, approximately $500million contracts have been awarded to Canadian firms just for the F-35 deal including 34 suppliers from Canada. As Apex becomes a regular player in Lockheed's production line, it will have an opportunity to obtain more defence deals in the future.
"Lockheed Martin is honoured Apex Industries is joining the F-35 Canadian Industrial team to bring value to the program as we increase our production rates and further reduce the cost of our aircraft," Lockheed Martin's F-35 Business Development Director in Canada, Keith Knotts, said regarding inking the agreement with Apex.
"Apex's contribution will be substantial F-35 machining work which is extremely important as the program continues to grow," Mr Knotts said in a press release. Apex is privately held and based in Canada with a headcount of 225 employees. Apex Industries is known for tie-ups with aerospace players like Bell Helicopter, Boeing Defence, Bombardier and Lockheed Martin. The F-35 Lightning II programme belongs to the fifth generation fighter aircraft. What it does best is combine the speed and flexibility with the advantage of stealth.
COO of Apex, Keith Parlee, was quoted as saying by The Hill Times, the Apex agreement is tenured for three years. Apex declined to discuss the value of the agreement, since the production of its components is directly linked to the number of F-35 production. Canada was on track for the delivery of four F-35 fighters in 2017. However, a review by the Department of National Defence reported to the Canadian Parliament that a delay of a year would cost an additional $430 million to the total cost of acquisition, tagged at $9 billion.
"We're using three years, but the build rates do impact volume size, the dollar amount and the length, but for this initial contract, it's about three years and obviously the big thing for us is that it opens the door to another original equipment manufacturer," Mr. Parlee said. "Now we can add Lockheed Martin to that list and that's in Canada today, is to continue to open those doors with these larger firms and that's why we're quite pleased to have this contract," said Mr. Parlee, declining to provide a dollar figure for the value of the contract.
"We have rough amounts that we could say, but we don't typically do that only because the lengths and the build rates do impact the dollar amount. It's significant to us, it's not the largest contract we've ever signed, but it's significant," Mr Parlee.
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