Lockheed Martin and the Pentagon have agreed on a contract for the next batch of F-35 joint strike fighter jets that apparently calls for the company to share more of the rising cost of the aircraft.
The agreement, announced Monday by the Joint Strike Fighter Program Office, was reached after lengthy and contentious negotiations that went public in recent weeks.Details of the contract, including the price, the number of planes and cost-sharing arrangements, were not disclosed.The contract was concluded Friday, less than 24 hours after the Pentagon's F-35 program boss went public with a frank account of new problems found in the design and production of the jets.In an interview published online by AOL Defense, Vice Admiral David Venlet, the program's executive officer, said that significant numbers of cracks and "hot spots" were being found in the F-35's main structures. The problems will require expensive redesign work and time-consuming repairs to airplanes already built and those to be produced in the next year or two.The structural issues discovered in flight and fatigue testing pose no immediate safety problems, Venlet said, "but when you bundle them all up and package them and look at where they are in the airplane ... the cost burden of that is what sucks the wind out of your lungs."As a result of the findings, Venlet said production of the F-35 should remain low while flight and ground testing of the three F-35 models continues. A 20-page study obtained by Bloomberg News, prepared by Venlet's office for acting Pentagon weapons buyer Frank Kendall, says the aircraft design was not stable."The program has been finding and expects to continue to find issues which will require consideration of potentially significant rework," the report said.Lockheed officials have continually pressed the Pentagon to boost orders, arguing that the only way to lower manufacturing costs was to increase production. At an investor conference Thursday, Lockheed executives acknowledged that looming defense budget cuts would foreclose production increases, which they said would be a "lost opportunity" to lower costs.It was the high cost of fixing design problems in airplanes that had already been built that led the Pentagon to press Lockheed to bear a greater share of so-called concurrency costs.Lockheed CEO Robert Stevens publicly disclosed the dispute in late October.At Thursday's investment conference, Chief Financial Officer Bruce Tanner said the company was unaware of past defense contracts that required cost-sharing by a contractor on what he called "unknown and unknowable" problems that are found in development.The Pentagon's position was supported by Sen. John McCain, R-Ariz. "The joint strike fighter program has been both a scandal and a tragedy," he said on the Senate floor Monday, according to The Hill, a publication that covers Congress. "Lockheed Martin must be held increasingly accountable for cost overruns that come as a result of wringing out necessary changes in the design and manufacturing process for this incredibly expensive aircraft."Lockheed has 6,100 people working directly on the F-35 program in Fort Worth, about 3,000 of them production workers and the rest in development or other support activities. Without increased production, employment at the plant won't grow and may decrease as development and engineering work begins to wind down.This article includes material from Bloomberg News.Bob Cox, 817-390-7723Twitter: @bobcoxictHave more to add? News tip? Tell us
