Thank you, Mr. Chair.
Ladies and gentlemen, I would like to thank you for inviting me to testify today. I would also like to thank you for your dedication to issues relating to national defence and the Canadian aerospace industry.
Héroux-Devtek is a public corporation founded in 1942. The company's head office is in Longueuil. We have plants in Longueuil, Laval and Saint Hubert, Quebec; Kitchener and Toronto, Ontario; Arlington, Texas, and Cincinnati, Springfield and Cleveland, Ohio. In Canada, we have over 1,000 employees working at our aerospace plants.
Héroux-Devtek is the third largest designer and manufacturer of landing gear in the world and a leader in the manufacture of commercial and military airframe components. Over 65% of our products are exported, which makes us a global leader that can compete for and secure contracts for projects around the world.
Héroux-Devtek's growth speaks for itself. Our revenues increased from $12 million in 1985 to over $320 million in 2010. We are very proud of our achievements. We got there through hard work and calculated risks, but above all through the exceptional skill of our employees.
Héroux-Devtek enthusiastically supports the Government of Canada's decision to purchase the F-35 joint strike fighters. This program, based on a partnership among nine nations that originated in 1997, will give Canadian companies access to opportunities in the partners' fleet valued at up to around $12 billion, excluding the maintenance of the aircraft.
The Government of Canada's involvement in the concept development and demonstration phases of the F-35 makes this an outstanding opportunity for the Canadian aerospace industry. Indeed, our early involvement in the development of state-of-the-art systems and components for the F-35 places our industry in a prime position to win substantial manufacturing contracts for the partner nation fleets of 3,200 aircraft and for the aircrafts sold to non-partner nations.
Note that the F-35 will likely be the replacement product for the F-18, A-10, F-15, and F-16, among other aircraft.
Canada's involvement in this program will bring value-added work to our country and generate the creation of thousands of jobs in the aerospace industry across the nation. Moreover, the large scope of this project would help us generate considerable economies of scale. Now is the time to integrate the supply chain and make the most of this extraordinary opportunity. Two years from now will be too late.
Héroux-Devtek's involvement with the joint strike fighter comprises several levels. We build components of the landing gear and aerostructure, such as the wings and the centre fuselage. The uplock system has been conceived and developed by our engineers in Longueuil, and we are proud to be one of the largest aerostructure suppliers in this program.
The contracts signed with Lockheed Martin and the other prime contractors will allow us to develop new technologies and bring our production process to the next level. This in turn will help us to remain competitive by pushing the limits of our capabilities to innovate. Moreover, this production will likely span more then 25 years, and the in-service supports will be required until 2051.
The majority of Héroux-Devtek's factories are engaged in production related to the F-35. Our participation in the joint strike fighter supply chain will help us demonstrate our capabilities across the world. We will also be in a position to leverage the technology developed and the knowledge acquired in the JSF context to other civil and military platforms. This program will therefore also have a considerable multiplier effect for a company like ours.
The choice of the F-35 Lightning II joint strike fighter to replace the CF-18s has been the focus of a lot of attention lately. I would like to outline a few points of clarification that I feel are needed in order to have an informed debate on this decision.
Firstly, Canada could not reap all the benefits of this program if it were to withdraw from the JSF partnership and choose not to purchase the F-35s. As an industry leader, I can assure you that if we don't buy the F-35 we will not get the benefits linked to industrial participation to which I was referring earlier. Those benefits, arising out of concerted and efficient efforts from government and industry over the past ten years, would go to partner nations acquiring the joint strike fighter.
Secondly, the value of the benefits received from industrial participation differ from those Canada would receive from a conventional industrial and regional benefit, or IRB. We're very pleased with the changes brought to the IRB policy by Minister Clement, but early involvement in a large program like that of the JSF is likely to bring considerably higher value-added work to Canadian companies such as Héroux-Devtek.
Moreover, only the costs related to the aircraft would generate IRBs. Those costs represent approximately $4.8 billion, not $9 billion, and we are in a position to bid on opportunities worth $12 billion on the partner fleets of 3,200 aircraft, excluding the maintenance and aircraft purchased by non-partner nations.
Finally, as I mentioned earlier, Canadian companies only have a window of opportunity of approximately two years to integrate the F-35 supply chain. Indeed, once the high rate of production scheduled to start in 2014 begins, the suppliers, both first and second source, will have been selected, and it will be too late for Canada to return to the table. Time is of the essence.
To conclude, as the chairman of the Aéro Montréal board of directors, and a member of the AIAC board of directors, allow me to reiterate some facts about our aerospace industry.
Canada ranks fifth in the world in aerospace production, and Montreal is the third largest aerospace centre worldwide. The industry is present in all regions in Canada. Our capacities for engineering and production are envied the world over. Not only are our companies able to compete, but they want to compete. We have invested a great deal to be able to win these contracts. We need a climate of stability to optimize the benefits of this decision for the industry, from one end of the country to the other.
Thank you for your attention.