Pentagon Still Plans F-35 Increase --update
11 February 2016 - 12:12PM
Dow Jones News
By Doug Cameron
Plans by the Air Force to trim its F-35 Joint Strike Fighter
order this year won't affect a planned long-term increase in output
to make the plane more affordable, a senior Pentagon official said
Wednesday.
Production is expected to rise from more than 50 this year and
climb every year until the mid-2020s, peaking at 160 to 170 jets,
Gen. Chris Bogdan, the military chief of the F-35 program, told
reporters.
Boosting production is crucial to efforts to reduce the average
cost of the radar-evading jets as the Pentagon looks for more
export deals at a time when the U.S. has again slowed its own
purchases.
The Pentagon had at one point hoped to build as many as 200 jets
a year, though the proposed rise to 170 is at the top end of many
analysts' forecasts. The defense department budget for fiscal 2017
cut more than $11 billion from weapons spending, including five
F-35s.
Gen. Bogdan's comments contrasted with concerns raised this week
by a senior Pentagon official about efforts to boost
production.
"It's unclear we'll be able to get this program back to the
[production] ramps that we had hoped for previously," Pentagon
Comptroller Mike McCord said Tuesday.
Lockheed Martin Corp., the lead contractor, delivered 45 planes
last year and expects this to rise to 53 in 2016 and to around 100
from 2018.
"The program right now is accelerating, growing and changing"
Gen. Bogdan said. He said that this week's move to trim orders for
the Air Force wouldn't harm the effort to cut the average cost of
the main model to between $80 million and $85 million, by 2019,
when adjusted for inflation. This compares to around $100 million
for the batch currently being negotiated.
Gen. Bogdan said he expected to reach a final agreement in March
with Lockheed on the next round of aircraft.
The Pentagon reached a preliminary deal with United Technologies
Corp's Pratt & Whitney unit last month for two more batches of
engines for the jets.
He said efforts to secure a three-year deal potentially covering
hundreds of jets and land two new overseas customers could cut the
cost further. The Pentagon has pushed back plans for a block-buy of
the planes by a year until fiscal 2019.
The Pentagon plans to invest up to $100 million during the next
year on cost-cutting efforts, building on the combined $170 million
spent by Lockheed and its two largest partners-- Northrop Grumman
Corp. and BAE Systems PLC--during the past three years on reducing
the cost of the plane.
Gen. Bogdan said he expected overseas deals would fill most of
the gap left by the Pentagon's reduced purchase. He forecast total
domestic and international sales of 873 jets between now and
2021--20 fewer than expected a year ago.
However, this includes a hoped-for deal involving as many as 60
jets from Canada, whose new Liberal government has reopened a
long-running competition to supply new jets.
The defense department cut weapons spending from its fiscal 2017
budget to focus resources on the new Air Force tanker being built
by Boeing Co., a new bomber contract awarded to Northrop Grumman
Corp.--which is being protested by Boeing and Lockheed--and work on
a new ballistic missile submarine.
The Air Force is due to declare the F-35 combat ready in August,
while Israel, the first overseas customer, is due to receive its
initial planes in December.
(END) Dow Jones Newswires
February 10, 2016 19:57 ET (00:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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