Pentagon leaders laud Lockheed on F-35 improvements

Posted Friday, Jun. 14, 2013  comments  Print Reprints
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After years of problems including cost overruns, design snafus and delays, Pentagon leaders now hope to ramp up production of Lockheed Martin’s F-35, the costliest jet fighter program in U.S. history.

The Pentagon is “cautiously optimistic” that it will raise production in the fall to 30 aircraft a year and eventually increase the rate several times more, Frank Kendall, undersecretary of defense for acquisition, technology and logistics, told a gathering of reporters and officials Thursday at Lockheed Martin’s west Fort Worth aeronautics headquarters.

“Ultimately, it will mean we will get production rates to a much higher level, which will mean obviously more work here in Fort Worth,” Kendall said.

Kendall and several other Defense Department officials came to Fort Worth to attend an annual F-35 round-table discussion between the aerospace giant and its major customers.

The F-35 program has been mired in controversy almost from its inception more than a decade ago. Costs have exceeded projections by as much as 70 percent, and a series of technical problems caused production delays.

As a result, the estimated $400 billion defense program has drawn criticism from watchdog groups, the Government Accountability Office and leaders at the Pentagon. And some foreign nations have threatened to consider other jets because of the rising cost.

Last fall, one of the Pentagon’s top officers over the program, Lt. Gen. Christopher Bogdan, said the relationship between Lockheed and the military was “the worst I’ve seen.”

In March, Lockheed announced a new management team for its aeronautics division. Orlando Carvalho replaced Larry Lawson, who retired from Lockheed and took a job at another firm.

At Thursday’s news conference, the Pentagon officials expressed satisfaction with the new leadership, and Bogdan said he’s encouraged by the progress under Carvalho.

“When I first came on the program … I was pretty vocal about the relationship the government had with Lockheed Martin,” he said. “I can tell you, there have been significant changes in leadership [at Lockheed].

“We believe our working relationship is definitely improving,” Bogdan said. “We are communicating much, much better with each other now. I’m encouraged by what I’ve seen over the last few months.”

Kendall said he is also pleased with the program’s progress.

“This is not the program I saw in 2010,” Kendall said. “It’s much more stable. The design is much more stable. Issues have been fleshed out, and we have a path to try to resolve them.”

But he also said it is still too early to declare victory.

“We still have a long way to go,” Kendall said. “I don’t want to be euphoric about this … but there’s a good deal of work to be done.”

Some of the progress has been due to the government’s shift to fixed-price contracting, Kendall said, which puts more of the risk associated with overruns on Lockheed. Recent adjustments have led to a $500 million drop in projected costs.

In December, Lockheed received a Pentagon contract guaranteeing a final installment of about $127.7 million for the fifth production lot of F-35s. It later received Pentagon contracts worth up to $3.67 billion for 31 additional jets, according to news reports.

The production rate is planned to increase to 42 planes in fiscal 2015, 62 in 2016, 76 in 2017 and 100 in 2018, according to an internal Pentagon budget document obtained by Bloomberg News.

About 11/2 years ago, the Pentagon had to postpone a decision to ramp up production, Kendall said.

“We were not ready to do that,” he said. “The design was not stable enough on the program to increase production.”

But the development program is executing close to the plan, he said. “We’re making good progress on” design issues, he said.

Lockheed Martin President and CEO Marillyn Hewson was pleased to hear the Pentagon’s commitment to the F-35.

“While there is work to do, we’re all proud of the progress the collective government, international partner, and industry team has made since our last meeting,” Hewson said in a statement.

“We are committed to building on this momentum to take the program to new heights. This conference was all about accelerating that momentum and ensuring the success of the program.”

Lockheed Martin has more than 14,000 employees at its west-side factory. More than 9,300 are working on the F-35 program.

Yamil Berard, 817-390-7705 Twitter: @yberard

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