F-35 contractor hits back, says Lockheed lawsuit is about ‘profits,’ not national security
The F-35 contractor recently sued by Lockheed Martin has hit back against Lockheed’s claims that the ongoing pricing dispute is a threat to national security. The contractor, Pittsburgh-based Howmet Aerospace, wrote in a recent court filing that Lockheed’s intent with the lawsuit is not to protect national security, but to protect its profits.
Lockheed has asked the court to grant a temporary restraining order, or TRO, to force Howmet to sell the titanium materials at a lower price.
“Contrary to Lockheed’s cavalier invocation of ‘national security interests,’ Lockheed is seeking a TRO for one cynical reason: profits,” Howmet attorneys wrote in a Thursday court filing.
Lockheed Martin employs more than 18,000 people in Fort Worth, where it makes the F-35. It has a $3 billion payroll across its 47 facilities in Texas, according to the company.
Last week, Lockheed filed a lawsuit against Howmet, which supplies titanium materials for the F-35 project. The suit was filed in the Fort Worth division of U.S. District Court for the Northern District of Texas.
The suit outlined a pricing dispute between Lockheed and Howmet, in which Howmet had demanded higher prices for its titanium materials, and Lockheed had refused to pay higher prices. As a result, court filings say, Howmet stopped providing Lockheed and other F-35 contractors with the titanium materials.
This break in the supply chain, Lockheed wrote in its lawsuit, will lead to “unavoidable and susbstantial delays in Lockheed Martin’s delivery of F-35 aircraft.” That, in turn, means that the pricing dispute is “threatening national security,” Lockheed’s filings say.
In a statement released Dec. 1, after the Star-Telegram initially reported on the lawsuit, Howmet said that it had raised its prices to reflect a significant increase in the market rate of titanium materials due to the Russian invasion of Ukraine. The materials had not only become more expensive to buy, Howmet’s statement said, but the company’s bottom line had also been impacted by other F-35 contractors selling their excess material on the market instead of returning it to Howmet as they were supposed to.
Howmet on Thursday filed a response to Lockheed’s TRO request, pushing back against Lockheed’s claims and urging the court not to force Howmet to sell at a lower price. In that filing, the contractor says that Lockheed is trying to avoid having to pay more for titanium materials, or having to absorb its other contractors’ increased titanium costs.
“Lockheed’s machinations must be rejected for what they are: an attempt to gain leverage in a business deal,” Howmet’s Thursday filing says.
According to the Howmet filing, the increased price of the materials would amount to a $17 million increase to Lockheed over the course of 2024. That increase would be “negligible,” the filing says, considering Lockheed’s massive budget. Lockheed’s annual report from 2022 shows net sales that year of $66 billion and net earnings that year of $5.7 billion.
Howmet’s response also casts doubt on whether the pricing disipute would lead to a delay in F-35 shipment anyway, because other contractors likely have a stockpile of titanium materials to work with, because Lockheed could buy titanium materials elsewhere and because Lockheed has already delayed F-35 shipments for unrelated software issues. Lockheed could also, the filing says, agree to pay Howmet’s price adjustments to restart the materials deliveries, even while the lawsuit is ongoing.
Lockheed filed a response on Friday, arguing that the court should grant its TRO request. That filing reiterated Lockheed’s stance that Howmet has breached the contract and that the pricing dispute could threaten national security.
Lockheed attorneys previously proposed that a hearing on the temporary restraining order — if the judge overseeing the case, U.S. District Judge Reed O’Connor, holds a hearing — could be scheduled for early next week.
This story was originally published December 8, 2023 at 1:26 PM with the headline "F-35 contractor hits back, says Lockheed lawsuit is about ‘profits,’ not national security."
