V-22 Costs Soar

      The V-22 Osprey program has become the largest scandal in US military history.  Stubborn Marine Corps Generals refuse to admit that dedication and political influence cannot overcome the laws of physics which have proven the complex tilt-rotor design flawed and ultra-expensive.  Details can be found in the seven previous G2mil articles about the V-22, which reveal blatant lies about the V-22's performance.  This article will cover the V-22's soaring cost, $96.2 million for each MV-22 this year, while the FY2005 defense budget request boosts the price 19% to $114.8 million per aircraft. The US Air Force requests three similar CV-22s in FY2005 for $443.0 million; or a unit cost of $147.7 million each.  If the $395.4 million requested in FY2005 for V-22 research, development, evaluation and testing is included in this buy of 11 V-22s, the total cost of each V-22 is $159.7 million. 

     The US Army has lost 41 helicopters over Iraq and Afghanistan this past year, with another 24 so badly damaged they are likely to be scrapped.  This is proof that employing ultra-expensive V-22s over combat zones is unwise, especially since they are larger than any helicopter in the US inventory. The V-22 weighs twice as much and costs four times more than helicopters with comparable abilities.  For example, the Navy's FY2005 budget requests 15 MH-60S helicopters for $400.8 million; or a unit cost of $26.7 million each. This helo weighs one-third as much as the V-22, but can pick up nearly the same payload. It has room for 13 combat equipped Marines, compared to 18 for the V-22.  If Congress canceled the V-22 and diverted its $1756.5 million FY2005 request to buy MH-60Ss, this could provide 67 modern helicopters for the Corps, which can also carry machine guns, rockets, and Hellfire missiles, unlike the V-22.

     Marine Generals have evaded questions as to how the Marines can afford 360 V-22s, especially since other critical Marine aviation programs have been delayed as the V-22 is given priority.  After a fatal V-22 crash in 2000, the General Accounting Office released a report projecting a V-22 average unit production price of $83 million.  However, the Marine Corps insisted they would only cost $40 million.  During an April 2000 news conference, a reporter asked the head of Marine Aviation, LtGen Fred McCorkle, to explain:

Q: Can you clear up for us the price tag on this aircraft? I've seen it various reported between $40 (million) and $80 million apiece. How much do they cost?

Lt. Gen. McCorkle: I'll be more than happy to, and this is on the back of an envelope, not something that you can take to the bank on price tag. But the way that I talk about price is what all the DOD aircraft are priced at is '94 dollars. It's -- the last official price on the MV-22 in '94 dollars is $39.9 million. I understand now that that is going to increase to, like, 41.7 or something million dollars, but when I hear somebody say it's $80 million, I'll say, Okay, so what does your aircraft cost and -- when we look at it in the same way? So normally, when you hear prices of $80 million or $100 million, somebody is comparing apples and oranges.

At a V-22 news conference several months later, another reporter asked McCorkle to clarify costs:

Q: Yes, you said that you requested a delay in Milestone 3. I assume that's to go for full production. And could you just run us through a little bit, first of all, the cost per -- what is the current cost projection per MV-22? And also, you were about to make that decision to go to full production, weren't you? What's the --

McCorkle: That's correct. And I didn't come down -- if you'll forgive me -- to talk about cost of the aircraft. I've done that before. We can get you a spreadsheet, if you want the cost, if you want the garage that goes with it. For those of you that I've talked to that say when somebody says $83 million, I just read -- I would hope to sell you your car, your next one, where you buy a $23,000 Chevy and I build your garage and give you the tires and batteries for 20 years, that will be about $85,000. So when you put it that way -- but we can get you the cost.

     McCorkle led a passionate defense of the V-22 during his tenure.  Soon after retiring from the Marines in October 2001, McCorkle joined the board of directors and as a senior advisor for GKN Aerospace Services (V-22 fuel tanks).  He also serves on the Rolls-Royce North America board of directors (V-22 engines), and is a member of the board of directors of Lord Corporation (V-22 components).  In addition, he has served as a consultant for Boeing Aerospace (V-22 maker) and Optical Air Data Systems (V-22 low airspeed indicator).

     Cost information about the V-22 and other military procurement programs is often deceptive.  The program manager now insists that V-22s are costing just $76 million each, despite the facts in the FY2005 Defense budget.  What the V-22 manager does not reveal is that they hope the average cost for V-22s will fall dramatically and end up with an average of $76 million a copy over the entire production run.  Since the V-22 began production in 1999, these projections have been wildly optimistic.  The history of V-22 production clearly shows steady unit cost growth, so the program manager should be quoting a unit price higher than today's $115 million a copy if he wishes to advertise the average unit production cost.

     The program excused higher costs in early years by noting these were Low Rate Initial Production (LRIP) V-22s.  This designation is used to explain high costs during the first two years of production since costs associated with purchasing production tooling, and hiring and training production workers must be included.  That excuse was valid until 2001 when the V-22 entered normal production with a dozen of V-22s funded each year, despite having failed testing in 2001.  This is the oddest production line in US military history since it turns out incomplete V-22s which are placed in storage in hopes that further testing scheduled to continue through FY2008 can produce a safe and effective final design.  Then the first 100 of so V-22s must be sent back though the production line for upgrades to the final "Block C" configuration.  The Marines have not included these V-22 upgrade costs in their future aviation budget plans nor in the quoted unit price.

     The current excuse is that V-22s are costing so much because of inefficient low rates of production.  However, the Navy has been buying only around 15 MH-60S a year, and those cost four times less.  The FY2005 budget also contains a $320.4 million request for four Marine Corps KC-130J tankers; or $80.1 million each. This aircraft is twice the size of the V-22 with twice as many engines (the same engines too), and is now produced at the same rate as the V-22.  So why does a V-22 cost 44% more than a big C-130 and 425% more than an MH-60S?

Marine Aviation Plans to Quadruple Spending

     There is a  shocking chart at the bottom of this link to the 2003 Marine Almanac (pdf).  Marine Aviation procurement dollars have been $1 to $2 billion a year for the past 15 years.  To afford the V-22, the Corps expects funding to rise $1 billion a year starting in FY2006 and eventually quadruple to over $6 billion a year in FY2009.  Congressmen have become big spenders, but with the record budget deficits, it is doubtful Congress will increase procurement funding four fold. In addition to this huge amount needed for the Osprey, the Corps needs funding for the CH-53E upgrade, and the Corps recently announced that it needed $250 million to outfit their ancient CH-46s with new engines due to delays in V-22 deliveries. Meanwhile, the H-1 upgrade program has just begun and will cost twice as much as planned, and the F/A-18s are getting old and the new F-35 is scheduled for several billion dollars in annual funding starting in FY2009.  The Corps has not budgeted the billion dollars needed to rebuild the first 100 or so new V-22's sitting around in hangers, which a recent whisterblower lawsuit claims are filled with defective hydraulic parts.

     When the V-22 began production in 1999, the procurement plan was to quickly ramp up to 36 a year and finish up in FY2009.  However, two fatal crashes led to an 18-month standdown, followed by a new six year research, development, evaluation, and testing phase which is eating up funds intended for production.  Here is the recently revised MV-22 procurement plan for 360 aircraft:

FY05 - 11
FY06 - 17
FY07 - 26
FY08 - 39
FY09 - 48
FY10 - 48
FY11 - 48
FY12 - 48
FY13 - 30

Note: The 50 CV-22s desired by the US Air Force special operations command will be produced in small batches mixed with MV-22 production.

      If the V-22 is fixed by 2008 and produced in higher quantities, they may get the price down to $100 million a copy, but the Corps needs $4.8 billion a year starting in FY09 just for V-22 procurement, which is also the target date when F-35s are to begin production. This does not include the billion or so needed to upgrade the first 100 V-22s to "Block C" when testing and development is done in FY2008.  Finally, the Corps will be forced to begin retiring its CH-53Es, which can carry three times more than the V-22, in 2010 because they will become too old and unsafe since no money will exist to upgrade and overhaul them.  Moreover, this all assumes the complex and problem plagued V-22 will complete testing by FY2008.  Delay seems likely as the V-22's flight control software problems continue.

     The Secretary of Defense or Congress must demand that the Marines present a realistic aviation procurement plan, just as the US Army has recently done with the cancellation of the RAH-66 Comanche helicopter.  The reasonable solution is to end V-22 production this year and hope the 80 or so already funded can be eventually upgraded for special long range missions.  Meanwhile, V-22 production funding can be diverted to purchase dozens of Navy MH-60S helicopters, or perhaps the new larger S-92 or EH-101 helicopters, although they will require a couple years of proper military evaluation.  

     The most effective strategy is to buy the MH-60S since it can also be employed as an attack helicopter, or outfitted for special roles using Army developed packages: an MH-60Q air ambulance, an EH-60 for electronic warfare, and the MH-60K with larger fuel tanks with twice the range of a V-22.  Spare parts and training will be economical since the Marines can use the existing Navy pipeline.  Hopefully, enough funding will remain to upgrade more CH-53Es; the current unfunded plan is to only upgrade only 111 and retire the other 54.  Another option is for the Corps to acquire and upgrade the 40 newer MH-53Es which the Navy plans to retire soon.  A final option is to trade the 80 or so V-22s now in testing or storage to the Air Force Special Operations command in exchange for their 38 newer MH-53Js, which they plan to retire as CV-22s come into service.  MH-53s can be sent through the CH-53X upgrade and overhaul program to insure commonality with Marine heavy lifters.

     These are the options which must be discussed. The current plan of passing the buck cannot continue or Marine Aviation will soon derail.  A mixture of  H-60s and more H-53s can provide the Marines with a more effective helicopter force than the unaffordable plan for 360 V-22s.  Today's MH-60S can carry three times the payload of the original CH-60As from the early 1980s, and has been so modernized that it has few common components.  An upgraded CH-53E will prove far more capable than the original design of 20 years ago. Ironically, a mixed force of H-60s and H-53s is what former Marine and Secretary of the Navy James Webb proposed in the early 1980s when the V-22 design was deemed unsafe and cancelled.   The V-22 is unsafe and unaffordable.  It is time for leaders to step forth and address this issue.

                                        Carlton Meyer  editor@G2mil.com

2004 www.G2mil.com

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