New F-35 Block Buy is Close, Lockheed Says

[Corsair1963]

The $34 billion contract covering production Lots 12-14 of the F-35 fighter—encompassing some 478 aircraft—should be announced in the next two weeks, Lockheed Martin officials reported in a quarterly earnings call Oct. 22.

“We’re now going through some housekeeping on the ‘block buy’ and hopefully we have that definitized in the next week or two,” said Kenneth Possenriede, Lockheed’s executive vice president and chief financial officer. Non-US partners are combining their purchases across several years in a “block buy” to raise production rates in order to achieve volume efficiencies and lower costs.

The US cannot participate in what the Pentagon terms a “multi-year” buy, however, until the program is in full-rate production, which cannot start until operational test and evaluation is complete. Pentagon acquisition chief Ellen Lord said last week that the F-35 likely won’t enter full-rate production by the end of 2019 as planned because of difficulty integrating the jet into Pentagon the Joint Simulation Environment, which is used to game out how many weapons systems are needed for various conflict scenarios. Operational Test and Evaluation otherwise is proceeding well, Lord said. The delay means full-rate production could be held up by a year, she acknowledged.

Lockheed’s Possenriede said the company is pleased with the program. “We feel good with the deals we’re getting with the customer,” he said. “We think they’re fair and reasonable; they’re balanced.”

Lord said the Lot 12-14 contract would be made public “soon,” having announced a “handshake deal” in June. She called it a “historic milestone” at the time because, beginning with Lot 13, the unit cost of the new fighters will be under $80 million — “one year earlier than planned.”

Lot 12 calls for 157 aircraft. Lockheed is on track to deliver 131 F-35s in calendar 2019, and plans to ramp up to 140 in 2020, 160 in 2021, and 170 in 2022. Peak production is expected to be about 180-185 aircraft per year, including the output of final assembly and check-out locations in Japan, Italy, and Fort Worth, Texas.

Possenriede also said the company is “socializing” a performance-based logistics proposal for the F-35 that would drive the operating cost per hour to under $25,000 before 2025. Company officials at AFA’s Air, Space and Cyber conference in September said the plan would save 16 percent a year versus current methodology, for a total of $33 billion in savings by 2033. Lockheed and its F-35 partners would pony up some $1.6 billion to get the program started, and would be reimbursed for that investment out of later savings.

“Industry would invest [and] commit to metrics,” Possenriede said, leading to “additional rewards.”


Lockheed CEO Marillyn Hewson said in the earnings call that the State Department has approved Poland’s purchase of 32 F-35A variants, at a value of $6 billion.



She said Lockheed will recoup any losses resulting from the ejection of Turkey from the F-35 partner program. “The US government has documented that Lockheed Martin will not absorb any impact for planes we’ve built or are currently building for Turkey,” he said. “We can bill and collect for that.” Hewson said the Turkey exit “is a decision by the US government to take Turkey out of the program. … We have a contract modification that the US government covers all that risk.”

Lockheed and Pratt & Whitney, builder of the jet’s F135 engine, have been “reassigning” the work being done by Turkish companies and “establishing alternate sources of supply,” Hewson said.

Turkey was to have purchased 100 F-35As, two of which have been completed and are at Luke AFB, Ariz., where international and US F-35 combat training takes place. The US has not said what will become of the two jets. Turkey was expelled from the F-35 program over its insistence on fielding the Russian S-400 air defense system, which the US says would compromise the F-35’s stealth secrets.

Possenriede listed new sales that more than make up for the loss of Turkish sales:
•Japan has increased its order by 105 aircraft
•Belgium will buy 34
•Singapore will buy “a modest amount to start”
•And competitions continue in Finland, Switzerland and Canada.

Getting the price under $80 million in lot 13 will “certainly help with those possibilities,” he said. Germany has indicated a preference for the F/A-18E/F, but Possenriede said, “We don’t think we’re out of the German competition yet.”

http://www.airforcemag.com/Features/Pag ... Says-.aspx

[quicksilver]

Announcement tomorrow am, maybe.

https://www.msn.com/en-us/money/compani ... li=BBnbcA0

[spazsinbad]

Lockheed Martin Gets $7 Billion for 114 More F-35s
28 Oct 2019 John A. Tirpak​

"Lockheed Martin on Oct. 28 received an approximately $7 billion award to build another 114 F-35 Joint Strike Fighters, including aircraft under the program’s 13th lot. The deal, which updates an earlier procurement contract, covers aircraft and other considerations for the Defense Department as well as F-35 partner nations and other foreign customers.

The contract announcement reflected fewer than the 148 aircraft that were expected to be part of an award for Lots 12-14. Pentagon acquisition and sustainment chief Ellen Lord forecasted the contract earlier in October, noting Lockheed and the DOD had reached a “handshake deal” on a so-called “block buy.”...

…Of the 114 aircraft in the agreement, 48 are F-35As for the Air Force; 20 are Marine Corps F-35Bs; and nine are Navy F-35Cs. The US will receive 77 total aircraft, while 15 F-35As will go to Australia, 12 F-35As will go to Norway, and eight F-35As and two F-35Bs will go to Italy.

The contract also covers funds to supply parts that have become harder to find, as well as software data, safety items, engineering services, and more. Lockheed will partner with Northrop Grumman and BAE Systems on the bulk of the work.

Lord and F-35 Program Executive Officer Air Force Lt. Gen. Eric Fick plan to offer more details on the new contract Oct. 29...."

Source: http://www.airforcemag.com/Features/Pag ... F-35s.aspx

[Corsair1963]

QUOTE:

While the purchase of this new group of stealthy F-35s for U.S. and allied militaries is expected to be valued at about $34 billion for 478 fighters, the Defense Department’s daily contract summary on Monday specified a partial installment of $7 billion


https://www.msn.com/en-us/money/compani ... ua4d-vM7b0

[quicksilver]

From the link I posted — “While the purchase of this new group of stealthy F-35s for U.S. and allied militaries is expected to be valued at about $34 billion for 478 fighters, the Defense Department’s daily contract summary on Monday specified a partial installment of $7 billion.“

My bet is the 114 (and the $7B) is for the first Lot (Lot 12) of the buy. When you add the other included stuff alluded to in the text you posted, the unit prices are gonna be really low. I think that’s why the governments comments in advance of the presser later this am are so ‘excited’ and rosy.

[Corsair1963]

From the link I posted — “While the purchase of this new group of stealthy F-35s for U.S. and allied militaries is expected to be valued at about $34 billion for 478 fighters, the Defense Department’s daily contract summary on Monday specified a partial installment of $7 billion.“

My bet is the $7B is for the first Lot (12). PW engine is GFE.

Yes, the 114 aircraft for $7 Billion....


(posted same time as you)

[Corsair1963]

Shocked by the "9" F-35C's! Which, should be like 20+ by this stage...

[quicksilver]

‘Shocked...’ ?

[joost]

What is interesting, is to see the first real spike in Italian orders: 10 aircraft at once! It seems they finally are moving forward with building their F-35 fleet.
Also seems to be a deviation in the Norwegian plan, with 12 aircraft in Lot 13, instead of the planned 6.

I think in the end the US numbers will go up, as we have seen multiple times before.

Joost

[quicksilver]

From the link I posted — “While the purchase of this new group of stealthy F-35s for U.S. and allied militaries is expected to be valued at about $34 billion for 478 fighters, the Defense Department’s daily contract summary on Monday specified a partial installment of $7 billion.“

My bet is the $7B is for the first Lot (12). PW engine is GFE.

Yes, the 114 aircraft for $7 Billion....


(posted same time as you)

Watching the presser live just now, the 7B is for an additional 114 aircraft beyond the money previously obligated for 255. The rest of the aircraft are in PB20 so they cannot obligate funding not yet approved by the Congress.

[krorvik]

Also seems to be a deviation in the Norwegian plan, with 12 aircraft in Lot 13, instead of the planned 6.

Only 6 remained unordered a few weeks ago - maybe they squeezed in the final ones. RNoAF are forward deploying to Rygge these days, and IoC is likely a couple of weeks ahead.

[playloud]

Shocked by the "9" F-35C's! Which, should be like 20+ by this stage...

Looks to be right on schedule per the SAR...

2007 - USAF=2 : USN/USMC=0 : Total=2
2008 - USAF=6 : USN/USMC=6 : Total=12
2009 - USAF=7 : USN/USMC=7 : Total=14
2010 - USAF=10 : USN/USMC=20 : Total=30
2011 - USAF=22 : USN/USMC=10 : Total=32
2012 - USAF=18 : USN/USMC=13 : Total=31
2013 - USAF=19 : USN/USMC=10 : Total=29
2014 - USAF=19 : USN/USMC=10 : Total=29
2015 - USAF=28 : USN/USMC=10 : Total=38
2016 - USAF=47 : USN/USMC=21 : Total=68
2017 - USAF=48 : USN/USMC=26 : Total=74
2018 - USAF=46 : USN/USMC=24 : Total=70
2019 - USAF=48 : USN/USMC=29 : Total=77
2020 - USAF=48 : USN/USMC=36 : Total=84
2021 - USAF=54 : USN/USMC=44 : Total=99
2022 - USAF=54 : USN/USMC=44 : Total=99
2023 - USAF=54 : USN/USMC=45 : Total=99
2024 - USAF=60 : USN/USMC=45 : Total=105
2025 - USAF=60 : USN/USMC=45 : Total=105
2026 - USAF=60 : USN/USMC=45 : Total=105
2027 - USAF=60 : USN/USMC=45 : Total=105
2028 - USAF=60 : USN/USMC=45 : Total=105
2029 - USAF=60 : USN/USMC=45 : Total=105
2030 - USAF=60 : USN/USMC=41 : Total=99
2031 - USAF=60 : USN/USMC=24 : Total=84
2032 - USAF=60 : USN/USMC=3 : Total=63
2033 - USAF=60 : USN/USMC=0 : Total=60
2034 - USAF=60 : USN/USMC=0 : Total=60
2035 - USAF=60 : USN/USMC=0 : Total=60
2036 - USAF=60 : USN/USMC=0 : Total=60
2037 - USAF=60 : USN/USMC=0 : Total=60
2038 - USAF=60 : USN/USMC=0 : Total=60
2039 - USAF=60 : USN/USMC=0 : Total=60
2040 - USAF=60 : USN/USMC=0 : Total=60
2041 - USAF=60 : USN/USMC=0 : Total=60
2042 - USAF=60 : USN/USMC=0 : Total=60
2043 - USAF=60 : USN/USMC=0 : Total=60
2044 - USAF=33 : USN/USMC=0 : Total=33

Total - USAF=1763 : USN/USMC=693
Grand Total = 2456

[commisar]

Giant buy was just announced

https://www.google.com/amp/s/www.cnbc.c ... t-yet.html

Almost 500 jets, sub $80 million a copy

[doge]

From F-35 official site F-35.com.

https://www.f35.com/news/detail/pentago ... by-12.8-pe

Pentagon and Lockheed Martin Reach Agreement Reducing F-35A Cost by 12.8 Percent
Lockheed Martin // October 29, 2019

The F-35A is now below $80 million; lower cost than legacy aircraft

FORT WORTH, Texas, Oct. 29, 2019 –The F-35 Joint Program Office and Lockheed Martin (NYSE: LMT) finalized a $34 billion agreement for the production and delivery of 478 F-35s at the lowest aircraft price during the history of the Program. This contract includes all U.S., International Partners and Foreign Military Sales aircraft in Lots 12, 13 and 14.

In the agreement, the F-35 Enterprise meets and exceeds its long-stated cost reduction targets for each variant – and the F-35A unit price, including aircraft and engine, is now below $80 million in both Lot 13 and Lot 14, the F-35A unit cost represents an estimated overall 12.8 percent reduction from Lot 11 costs for the conventional landing variant, and an average of 12.7 percent savings across all three variants from Lot 11 to 14.

“Driving down cost is critical to the success of this program. I am excited that the F-35 Joint Program Office and Lockheed Martin have agreed on this landmark three-lot deal. This agreement achieves an average 12.7 percent cost reduction across all three variants and gets us below $80 million for a USAF F-35A by Lot 13 - one lot earlier than planned,” said Air Force Lt. Gen. Eric Fick, F-35 Program Executive Officer. “This $34 billion agreement is a truly historic milestone for the F-35 Enterprise.”

The agreement includes 291 aircraft for the U.S. Services, 127 for F-35 International Partners, and 60 for F-35 Foreign Military Sales customers. Price details include:
Variant / Lot 12 / Lot 13 / Lot 14 / % Reduction from Lot 11*
F-35A / $82.4M / $79.2M / $77.9M / 12.8%
F-35B / $108.0M /$104.8M/$101.3M/ 12.3%
F-35C / $103.1M /$98.1M / $94.4M / 13.2%
*Please note: Final prices for F-35 variants following adjustments for Congressional plus-ups and other contractual settlements are as follows: F-35A - $89.3M; F-35B – $115.5M; and $108.8M.

“With smart acquisition strategies, strong government-industry partnership and a relentless focus on quality and cost reduction, the F-35 Enterprise has successfully reduced procurement costs of the 5th Generation F-35 to equal or less than 4th Generation legacy aircraft,” said Greg Ulmer, Lockheed Martin, F-35 Program vice president and general manager. “With the F-35A unit cost now below $80 million in Lot 13, we were able to exceed our long-standing cost reduction commitment one year earlier than planned.”

The sub $80 million unit recurring flyaway cost for an F-35 represents an integrated acquisition price for the 5th Generation Weapon System. With embedded sensors and targeting pods, this F-35 unit price includes items that add additional procurement and sustainment costs to legacy 4th Generation aircraft.

Program Progress
With more than 450 aircraft operating from 19 bases around the globe, the F-35 is playing a critical role in today's global security environment.

More than 910 pilots and 8,350 maintainers have been trained, and the F-35 fleet has surpassed more than 220,000 cumulative flight hours. Eight nations have F-35s operating from a base on their home soil and seven Services have declared Initial Operating Capability.

In addition to strengthening global security and partnerships, the F-35 provides economic stability to the U.S. and International Partners by creating jobs, commerce and security, and contributing to the global trade balance. The F-35 is built by thousands of men and women in America and around the world.With more than 1,400 suppliers in 46 states and Puerto Rico, the F-35 Program supports more than 220,000 direct and indirect jobs in the U.S. alone. The Program also includes more than 100 international suppliers, creating or sustaining thousands of jobs.

Image from Twitter
https://twitter.com/thef35/status/1189215319849603072

PDF
https://a855196877272cb14560-2a4fa819a6 ... 0008765716

[sferrin]

Death spiral for sure.