Wednesday, February 28, 2018

Pentagon Pushes for Deeper F-35 Jet Cost Cuts: Government will take over some repair work for program from Lockheed and partners

The Wall Street Journal
By Doug Cameron
Updated February 28, 2018 6:47 p.m. ET

The Pentagon is pushing to make the F-35 combat jet cheaper and will take over some repair work to prevent the world’s most expensive military program from becoming unaffordable.

Lockheed Martin Corp.’s multiyear effort to reduce the plane’s cost has worked, but the military head of the program warned spending on the F-35 could still surpass the Pentagon’s budget for the program by 2021.

“The price is coming down, but it’s not coming down fast enough,” Vice Adm. Mat Winter said on Wednesday.

Lockheed derives a quarter of its sales from the F-35 program. The Pentagon’s request could dent expectations for Lockheed to win a greater share of the business of maintaining the planes, which is typically more profitable than building aircraft.

Adm. Winter has launched a six-month review of labor expenses incurred by Lockheed and partners including Northrop Grumman Corp. and BAE Systems PLC to analyze the plane’s cost structure.

Lockheed Martin said in a statement that it was “aggressively” cutting costs and working with the government and suppliers to identify other opportunities.

The Pentagon said that taking on some of the F-35 repair work will free companies working on the program to make spare parts that have sometimes run short. Adm. Winter said just over half the fleet of 280 jets is available to fly because of spares shortages and quality issues.

The average cost of the F-35A model used by the U.S. Air Force dropped to $94.6 million in the last contract, a 7% decline from the previous deal.

Original article can be found here ➤

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