Lockheed, partners pledge to pump $170 million into F-35

07/10/2014 10:59 AM

07/10/2014 11:43 AM

Lockheed Martin and its corporate partners on the F-35 Joint Strike Fighter announced a new plan Thursday to reduce costs on the over-budget program even as the next-generation jet remained grounded on the eve of scheduled appearances at international airshows in Britain.

The companies pledged to spend $170 million through 2016 to help bring down the cost of the fighter jet from more than $100 million apiece to about $80 million by the end of the decade.

The upfront investment by Lockheed, Northrop Grumman and BAE Systems to pay for cost-reduction initiatives represents “a significant change in business approach within the F-35 program,” said Lt. Gen. Chris Bogdan, the Pentagon’s F-35 program manager.

The announcement came as military investigators continued to probe the cause of a June 23 engine fire at the rear of an F-35 jet at Eglin Air Force Base in Florida.

In Washington, Frank Kendall, the Pentagon’s top weapons buyer, told the House Armed Services Committee that the blaze appears to be an isolated problem.

“There is a growing body of evidence that this may have been an individual situation, not a systemic one,” said Kendall, the Defense Department’s undersecretary for acquisition.

Speaking with reporters, Kendall called the findings preliminary. “We haven’t identified a specific root cause. We haven’t found a similar problem with any of the other engines,” he said. “Based on what we have right now we think this is a ‘one-off’ of some kind.”

The military canceled the F-35’s appearance scheduled for today at the Royal International Tattoo Airshow, but officials remained hopeful that the plane will be cleared to appear at the Farnborough International Airshow next week.

In Florida, Defense Secretary Chuck Hagel visited Eglin, where he met with the pilot who escaped the F-35 fire and was briefed on the matter. The pilot aborted takeoff when the aircraft caught fire on the runway as it was about to take off for a training flight.

“We’re not going to put this aircraft in the air unless we feel absolutely secure that it is safe,” Hagel said.

The F-35’s debut flight at Farnborough has been highly anticipated by Lockheed and military leaders on both sides of the Atlantic as a sign that the program, which has been delayed by technical problems and cost overruns, was finally on track. Lockheed is seeking more foreign sales to support increased production, which would then help to reduce costs.

Four B-models — the short take-off/vertical landing (STOVL) variant of the F-35 — are scheduled to take to the skies on Monday at Farnborough, considered a more important showcase which draws aircraft and officials from around the world, Lockheed said.

The B model is designed to operate from bases and aircraft carriers near front-line combat zones. U.S. Marines were expected to fly three F-35’s at the show, with the fourth to be flown by a British pilot.

During a July 1 interview with the Star-Telegram, Lockheed’s top executive in Fort Worth said he was hopeful that the aircraft would be permitted to fly.

“We’re very excited,” said Orlando Carvalho, executive vice president of the aeronautics division. “We’re very proud of where the airplane is. We’re very proud of how well it performs, how well the flight testing has gone.

“This is an opportunity for the rest of the world to see the airplane, especially the B-model, to see it hover, a key capability of the B-model. To have this airshow where everyone can get to see that, is just a thrill for us.”

During the interview, Carvalho said the company was waiting for the results of the investigation into the cause of the blaze.

“We’re letting the process play out,” he said.

The fire is the latest blow to the F-35, the costliest U.S. weapons system, which has endured technical problems and cost overruns. Over the past year, the Pentagon said Lockheed has made progress in addressing performance and cost issues of the program, which is now estimated to reach nearly $400 billion for more than 2,400 planes.

Under the new investment plan, dubbed the “Blueprint for Affordability,” the plane’s manufacturers would not recoup their investment until program costs have been reduced.

Lorraine Martin, Lockheed’s executive vice president in charge of the F-35 program, called the agreement with the government “unprecedented measures” to make the plane more affordable.

“We have total faith in the F-35 to support the U.S. and our allies’ future defense needs,” Martin said. “Our industry team knows what is at stake given the current budgetary and global security demands to reach these cost milestones.”

More than 6,000 people work directly on the F-35 program at Lockheed’s complex in west Fort Worth, which employs about 13,300 overall. More than 100 F-35s have been delivered to the U.S. military.

This article includes material from Bloomberg News and The Associated Press.

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