Cuts could jeopardize on-time F-35 rollout, official says

Posted Wednesday, Apr. 24, 2013  comments  Print Reprints
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WASHINGTON -- The on-time rollout of the F-35 fighter jet in 2017 could be in jeopardy because of forced federal budget cuts, a key military official testified to Congress on Wednesday.

The monetary problems could lead to a loss of customers for Lockheed Martin's Fort Worth-based program, hurting the company.

Lt. Gen. Christopher C. Bogdan, the Pentagon's executive officer of the F-35 program, told a Senate Armed Services subcommittee that he has "moderate confidence" that the first two software upgrade phases needed to complete the program will be delivered on time. But he's less optimistic that the final phase will be completed as scheduled because of mandated budget cuts, known as sequestration, in the current fiscal year.

President Barack Obama's proposed budget for the next fiscal year would give $6.36 billion to build 29 F-35s for 2014 and would increase production to as many as 60 aircrafts a year by 2018.

The F-35 program's eight partner countries, including the United Kingdom, are carefully watching the growing cost of F-35s. The United States pushed back an order of 179 planes, which caused Italy to reduce its jet order from 140 planes to 90. Canada and the Netherlands, too, have cut back on plane orders, Bogdan said, though Singapore is showing interest.

Any reduced orders mean increased unit costs for the rest of the customers.

Sen. John McCain, R-Ariz., said Bogdan's doubt was unnerving. "None of us around here seem to like the word moderate," McCain said.

Without the funding it has maintained from previous years, it could be difficult to complete the last phase of the project, Bogdan said. "It is vital for us to keep the partners in the program," he said.

In his prepared testimony, Bogdan also said that the government expects to reach a contract with Lockheed by the end of May on the next production order for as many as 60 F-35s. The parties reached a preliminary agreement on the deal in late December.

McCain questioned the program's efficiency and affordability and said history is repeating itself. Cost overruns on big aircraft programs are not new, having happened on the F-22 and B-2 programs, he said. It's time to understand the core of these financial problems to ensure that they don't happen again, he said.

Bogdan said he is ready to tackle the F-35's long-term costs and is analyzing cost reduction methods in hope of reducing the estimated $1.4 trillion over the next 50-plus years that will be spent to roll out the jets.

Bogdan said he will be more sure at the end of the summer about the likelihood of the program's 2017 completion.

Michael Rein, Lockheed Martin's F-35 spokesman, said that despite budget cuts, the United States and several international partners still rely on F-35 production, and Lockheed Martin will still have orders to fill.

"While sequestration will have an impact, F-35s are going to be built at Fort Worth for years to come," Rein said.

About 6,000 employees work on the F-35 program at the Fort Worth complex, and hundreds more are involved indirectly.

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