The strike by the Machinists union now in its ninth week has given Lockheed Martin breathing room to make improvements to its F-35 joint strike fighter production line.
Lockheed Chief Executive Robert Stevens said Tuesday that the company's F-35 management team has been able to make good use of the drastically reduced production rate caused by the strike."It's certainly given us time to bring balance to the line," Stevens said in a teleconference in Bethesda, Md. "We've worked to use this time prudently."Negotiators for Lockheed and the International Association of Machinists & Aerospace Workers are to begin meeting today with a federal mediator in an effort to end the strike that began April 23.Neither the company nor union had any comment preceding the negotiations, which will be held at an undisclosed location.Stevens disputed suggestions that Lockheed's talks with the machinists and its hard-line stand on changes to pension and healthcare benefits were the result of Pentagon mandates."The Pentagon did not direct us in any way in our negotiations with the IAM," Stevens said.The company's contract offer that included no pension for new employees and fewer health care plan choices and higher employee benefits costs reflected a drive to reduce expenses across the corporation, Stevens said, as Lockheed prepares for drastic reductions in defense spending.Lockheed Martin has been the focus of Pentagon and congressional criticism over constantly rising costs and development delays on the F-35, the largest and costliest military weapons program in U.S. history. Development and production costs alone are now estimated at $395.7 billion.The first four production contracts for 63 jets are over budget by $1 billion, according to the Government Accountability Office.The chairman of the Senate Armed Services Committee told Bloomberg News on Tuesday that the Pentagon and Congress should press Lockheed to reduce soaring costs of the F-35."We have to keep the pressure on," said Sen. Carl Levin, D-Mich. "We've got to have contracts which are fixed-priced. We have to make reductions."Since the program's earliest days, the F-35, like most new aircraft, has been plagued with parts shortages and defective components, and there has been major redesign work.All of these factors, many stemming from overly optimistic assumptions, have added to the delays and rising costs.Stevens again sounded warnings about the likelihood of a nearly $50 billion across-the-board defense budget cut in January if Congress can't agree on new budget and deficit-cutting plans."How will sequestration be implemented? We have no idea," Stevens said, referring to automatic spending cuts if Congress doesn't act. The better question, he said, "Is how many people will be affected? How many dedicated people are going to lose their jobs? How many families are going to be affected?"This report includes material from Bloomberg News.Bob Cox, 817-390-7723Twitter: @bobcoxict