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Revelation of Chinese Magnet Supplier Triggers F

Dec 19, 2023

A Chinese-made component found deep in the supply chain for the Lockheed Martin F-35 has halted aircraft deliveries for weeks or months, revived concerns about the limits of the Pentagon's industrial awareness and highlighted sourcing issues for specialty metals and rare earth elements.

The F-35 Joint Program Office (JPO) suspended deliveries from Lockheed on Sept. 7 after determining that all 850 jets delivered to date include Chinese materials in the samarium-cobalt alloy magnets placed within the Honeywell integrated power package (IPP) subsystem.

A replacement for the Chinese supplier has been selected, and the first compliant batteries are scheduled to be delivered in late October, a Lockheed spokeswoman says. Meanwhile, Bill LaPlante, undersecretary of defense for acquisition and sustainment, said on Sept. 9 that he is open to approving a national security waiver to allow Lockheed to resume F-35 deliveries sooner, pending the outcome of security and airworthiness impact reviews.

"If we find neither of those [conditions] to be the case, we’ll be able to do a waiver," LaPlante said during a Pentagon press conference on Sept. 9.

But the internal process for approving such a waiver could still take weeks. The JPO decided on Sept. 9 to seek the waiver but had not yet sent a formal request to LaPlante's office as of Sept. 13. In the meantime, internal processes continue.

Despite the delivery suspension, Lockheed is continuing normal F-35 assembly operations, with completed aircraft set aside until the Pentagon starts accepting them again. The company's financial guidance to investors still includes plans to deliver between 147 and 153 F-35s this year. Lockheed had delivered 88 F-35s to all customers before Sept. 7, leaving between 59 and 65 aircraft to be delivered through the end of December to meet the company's target.

The Chinese material inside the high-performance magnet has not been found to be unsafe or a security risk, Lockheed says. But U.S. laws and regulations prohibit the Defense Department from using in weapon systems the rare earth element samarium and specialty metal cobalt from China, Iran, North Korea and Russia.

The laws acknowledge the risk of relying on potential enemies as suppliers for key weapon systems. China has used export controls as a coercive tool. In 2010, Beijing imposed a temporary export ban on rare earth elements to Japan amid a territory dispute over islands in the East China Sea. Indeed, the state-owned Global Times newspaper responded to the Pentagon's reaction to the Chinese supplier for the F-35 with a warning, quoting a Beijing-based military expert named Wei Dongxu.

"If the U.S. opts for a waiver . . . the U.S. should now also worry about a potential export control from China," Wei told the Chinese newspaper.

Meanwhile, Pentagon and defense industry officials are concerned about a lack of visibility into sources for certain parts and materials at the lowest levels in the supply chain. Although Lockheed delivered F-35s for years without knowing about an illegal Chinese supplier, LaPlante said the issue is not limited to the fighter program. The samarium-cobalt magnets in the F-35's IPP subsystem are among 30,000 parts on the aircraft, including thousands that include raw materials far removed from the subsystem supplier or the prime contractor.

"Any company that says they know their supply chain is like a company saying they’ve never been hacked," LaPlante said.

Honeywell self-reported the existence of the Chinese supplier to F-35 program officials in late August, after being informed by the supplier of a lubricant pump within the IPP.

"We are working closely with [the Defense Department] and Lockheed Martin to ensure we continue to achieve those commitments on products Honeywell supplies for use on the F-35," a Honeywell spokesman says.

Samarium-cobalt magnets are used in many U.S. military weapons because they can withstand temperatures up to 550C (1,020F) without demagnetizing. U.S. industry led global mining output for rare earth elements such as samarium from the 1950s to the 1980s, but then China took over the market. By the time of the temporary Chinese export ban on rare earth elements to Japan in 2010, Chinese companies controlled 97% of the global market supply.

U.S. manufacturers such as Electron Energy Corp. and MP Materials have increased domestic operations since 2010, but they struggle to compete globally with China's cheaper labor and looser regulatory standards.

Steve covers military aviation, missiles and space for the Aviation Week Network, based in Washington DC.