Offset Agreements and Industrial Participation

¶ Offset Agreements and Industrial Participation

¶ Offset Obligations

With the purchase of the F-35A, Switzerland agreed on a 60% offset obligation of the contract value. This means that Lockheed Martin and its subcontractors must award contracts worth approximately CHF 3.6 billion to Swiss industry.

¶ RIGI Project: Swiss Final Assembly

RUAG received pre-approval for the final assembly of 4 of the 35 F-35A in Switzerland (RIGI project) [62]. This project encompasses:

• Final assembly and functional testing in Emmen
• Technical support from Lockheed Martin
• Knowledge transfer for Swiss technicians
• Quality assurance according to US standards

The remaining aircraft will be assembled at the European FACO (Final Assembly and Check-Out) in Cameri, Italy [63].

¶ Price Components of the Total Budget

Total budget CHF 6.035 billion
├── Aircraft (35 × F-35A)
│   ├── Airframe price
│   ├── F135 engine
│   ├── Mission systems and software
│   └── Test and ground equipment
├── Armament
│   ├── Air-to-air missiles (AIM-120 AMRAAM, AIM-9X)
│   └── Precision-guided munitions
├── Logistics and spare parts
│   ├── Initial spare parts package
│   ├── Maintenance contracts (Initial Sustainment)
│   └── ODIN logistics system
├── Training
│   ├── Pilot training (USA and Switzerland)
│   ├── Technician training
│   └── Full Mission Simulator
├── Infrastructure (share)
│   ├── Air base modifications
│   └── Stealth maintenance hangars
└── Risk surcharge / Reserve

¶ Comparison with F/A-18 Offset

During the F/A-18 procurement in 1993, the offset obligation was also 60%. RUAG was able to carry out all maintenance autonomously in Switzerland at the time -- software maintenance, engine overhaul, avionics repairs without foreign involvement [61]. A comparable level of autonomy is not foreseen for the F-35.

¶ Comparison with Finnish Industrial Participation

Finland agreed on a minimum quota of 30% for industrial cooperation for its 64 F-35A [64]. This nominally lower quota (compared to 60% in Switzerland) is qualitatively compensated by deep integration into the global F-35 supply chain:

• Patria (forward fuselage production): The semi-state-owned company Patria (51% Finnish state ownership) produces F-35 forward fuselage sections not only for the Finnish fleet but for the global supply chain. This makes Finland a structurally indispensable supplier to the entire F-35 programme. According to EDR Magazine, Finnish industrial participation creates approximately 4,500 direct and 1,500 indirect person-years of employment [65].

• Engine hub Nokia/Linnavuori: The Finnish government approved a facility for final assembly and lifetime maintenance of F135 engines. The facility will operate for the entire life cycle of the Finnish F-35 fleet [66].

• Insta (avionics and system integration): Insta handles the maintenance of avionics systems and integration into national command systems (C2). The contract is designed for the full 30-year service life [67].

Structural difference: The Finnish participation positions Finland as a permanent node in the global F-35 supply chain. Excluding Finland would affect production for other customer nations. Switzerland's final assembly of 4 jets under the RIGI project [62] does not create a comparable structural position. The PAC-CE found in 2022 that the existing Swiss offset controlling did not allow any conclusions about goal achievement [68].

---

---

→ See also: Procurement Costs and Cost Overruns

¶ References

[61] DebugLies.com (2025). Switzerland's F-35 Acquisition: Data-Driven Analysis of U.S. Control
[62] Army Recognition (2024). Switzerland to Locally Produce Four of Its 36 F-35A Fighter Jets
[63] Defence Industry EU. RUAG Receives Pre-Approval for Final Production of F-35 Fighters in Switzerland
[64] Air & Space Forces Magazine -- Finland Formalizes Deal for 64 Block 4 F-35s (2/2022)
[65] EDR Magazine -- Patria: Significant role in F-35 supply chain
[66] Defense News -- Finland approves construction of Patria's F-35 assembly facility (3/2024)
[67] Insta -- F-35 Avionics Services and Maintenance (2024)
[68] GPK-S / CdG-E / PAC-CE -- Controlling Offset-Geschäfte (PDF, 25.1.2022)