Japan decision on F-35 jet now seen next week

WASHINGTON/TOKYO Wed Dec 14, 2011 12:24pm EST

A F-35 fighter jet refuels between missions aboard the USS Wasp off the coast of Virginia during sea trials, October 18, 2011.                    REUTERS/David Alexander

A F-35 fighter jet refuels between missions aboard the USS Wasp off the coast of Virginia during sea trials, October 18, 2011.

Credit: Reuters/David Alexander

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WASHINGTON/TOKYO (Reuters) - The Japanese government has delayed a formal announcement on its choice of a next-generation fighter jet until December 20, according to two sources familiar with the process, but Lockheed Martin Corp's (LMT.N) radar-evading F-35 is still expected to get the order.

The delay came because Japan's national security council, chaired by Prime Minister Yoshihiko Noda, has to deal with other pressing matters at a December 14 meeting where the fighter jet decision had initially been expected, said the sources, who were not authorized to speak on the record.

But the delay did not mean any change in Japan's commitment to buy Lockheed's F-35 fighter, one of the sources added.

Japan's government and ruling party officials have approved a Defense Ministry proposal to buy Lockheed's F-35 Joint Strike Fighter as the country's next mainstay fighter, public broadcaster NHK said on Wednesday.

Japanese media said on Tuesday that Lockheed was likely to win a deal worth more than $7 billion, beating out Boeing's (BA.N) F/A-18 and the Eurofighter Typhoon, made by a consortium of European companies including BAE Systems (BAES.L).

Japan's Defense Ministry denied the reports, and the U.S. Defense Department's F-35 program office said it had not been notified by the Japanese government of any decision.

"The Defense Ministry has made no decision yet. A meeting of minister, vice minister and parliamentary secretaries (to make the decision) has not even been held yet," a spokesman for the ministry said.

Ralph Heath, executive vice president of Lockheed's aeronautics division, told Reuters late on Tuesday the company was still awaiting Japan's decision, but remained confident the F-35 jet was the best plane in the competition.

A decision by Japan to choose the F-35 as its mainstay fighter would strengthen the long-standing relationship between Lockheed and Japan, and help maintain security in "a very critical part of the world," he said.

Winning an order to build 40 to 50 planes for Japan would be a strong endorsement of the F-35 fighter, which is being developed by the United States and eight partner countries -- Britain, Netherlands, Norway, Australia, Turkey, Italy and Canada -- to replace 12 current fighter jets.

The Pentagon is expected to spend $382 billion on 2,443 of the new fighter jets over the next two decades, making it the costliest fighter jet program ever, but defense spending cuts may slow the expected ramp up in production in coming years.

The program has faced tough scrutiny by U.S. lawmakers in recent years due to cost overruns and schedule delays, but company officials say the plane is meeting or exceeding its testing targets. Lockheed currently has 32 fully assembled F-35s in its Fort Worth, Texas, plus another 18 that are still being assembled, Heath said, adding: "We're actually very upbeat about the program."

Japan, which counts the United States as its key security ally and regularly conducts military drills with U.S. forces, had been widely expected to choose the F-35 because of its advanced stealth capability and U.S. origin.

The aircraft's stealth technology has drawn much attention in Japan since China, which has a long-running territorial dispute with Japan, in January confirmed it had tested its J-20 stealth fighter jet for the first time.

Japanese companies could invest close to $1 billion in facilities to manufacture parts of the new fighter jet if the pacifist nation lifts a ban on military equipment exports. That would allow Japanese contractors such as Mitsubishi Heavy Industries (7011.T) to compete as suppliers for the fighter.

Japan would begin purchasing the plane in 2016, buying small numbers for several years and only slowing the advancing of its purchases, according to industry sources.

(Reporting by Kiyoshi Takenaka and Andrea Shalal-Esa; Editing by Maureen Bavdek)

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