Forum: Program and politics

GRAPEVINE - Future defense-spending reductions will likely lead to the Air Force buying fewer F-35 joint strike fighters than now planned, but a senior Lockheed Martin official says that should not drive up the aircraft's price.

"The best intel we have is the U.S. government is going to adjust the Air Force buy," Tom Burbage, Lockheed's executive vice president for the F-35 program, said Wednesday.

Pentagon plans call for the Air Force to buy about 1,700 F-35s over 15-20 years, out of a total U.S. purchase of about 2,400 planes. But defense analysts say those plans are likely to be altered because of ballooning federal budget deficits and changing military requirements.

Interviewed after speaking at the SAE AeroTech Congress at the Gaylord Texan in Grapevine, Burbage said he had little hard information about ongoing Pentagon budget and strategy reviews. At this point, he expects the number of F-35s to be purchased for the Navy and Marines to remain unchanged.

Some analysts have suggested that the Navy version of the plane could be endangered. The Navy is already buying one new fighter jet -- the F/A-18E/F -- and service officials could decide that they don't need another, especially if the price of the F-35 rises.

Two issues -- how many F-35s will be purchased and when they'll be purchased -- are crucial to keeping the aircraft's cost low enough so the U.S. military and foreign governments can afford to buy the airplane.

Getting production rates up early and keeping them at a high rate is crucial to keeping the F-35's unit low, said Richard Aboulafia, aerospace analyst with the Teal Group market-forecasting firm. The first production aircraft is expected to be completed in 2008.

When the F-35 program was launched in late 2001, Defense Department officials said the goal was to produce new fighter jets ranging from $45 million to $60 million each, depending on the model. The Air Force, or conventional takeoff version, is the cheapest, and the Navy and Marine versions will be more expensive.

A cut in the number of planes purchased by the Air Force would not have much effect on production rates early in the program, Burbage said. "We think the front end will remain pretty stable."

Burbage has made frequent trips to Washington to meet with Pentagon officials and members of Congress to keep them informed of progress and bolster political and bureaucratic support for the program.

International purchases could pick up the slack of cuts by the U.S. government, but significant foreign orders aren't expected until 2015 or so.

Lockheed is heading the F-35 development team that also includes Northrop Grumman and BAE Systems, as well as a number of other U.S. and foreign firms. Eight countries, in addition to the defense departments of the U.S. and Britain, have contributed funds to the $40 billion-plus F-35 development program.

Burbage, Lockheed's point man for dealing with U.S. and foreign governments, said the F-35 international coalition seems to be holding together but not without some tension.

Representatives of the various nations and their defense industries met in Turin, Italy, last week to continue discussions on the amount of work that Lockheed, Northrop and BAE are subcontracting out to companies in the partner nations.

The F-35 program is awarding contracts to foreign companies on a "best value" basis, factoring in cost and quality. That's a shift from the historical pattern of offering a specific share of work in exchange for aircraft orders.

The Turin meeting "went pretty well," Burbage said. "We're on our plan. Nobody's satisfied [with their share of work], but we're on the plan. We're trying to make that a nonissue politically."

Government and industry officials in Turkey were the latest to make noises about the level of work coming their way. Burbage met with them in Ankara last week and said he thinks that their concerns have been addressed.

"They have a very competitive aerospace industry," Burbage said, "but they don't have much experience dealing with the U.S." government and industry.

Norwegian officials have been the most vocal about not getting enough work for their companies as a result of their $150 million investment in the F-35 program. Burbage said he continues to talk to them, but "Norway is going to continue to be a challenge."

European defense contractors have been wooing Norway and Turkey as possible buyers for the Eurofighter, a rival in the competition for fighter sales, further complicating Burbage's travel schedule.

Some of the same companies, notably BAE and Italy's Alenia, are involved in both Eurofighter and the F-35 joint strike fighter.

Negotiations between the U.S. government and partner nations are continuing over definitive contracts, memorandums of understanding, on each country's plan to purchase F-35s. Burbage said negotiations on the memorandums need to be completed by mid-2006 so the governments can submit them for approval.

Partner countries have indicated that their plans would lead to purchases of 650 to 750 F-35s, a figure Burbage said is probably conservative. Other countries are also expected to eventually buy hundreds of planes.


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Some analysts have suggested that the Navy version of the plane could be endangered. The Navy is already buying one new fighter jet -- the F/A-18E/F -- and service officials could decide that they don't need another, especially if the price of the F-35 rises.

DOD: Hill Cut Would Delay JSF Fielding Up To A Year

In my opinion, 1700 JSF's is just too much, especially since not every mission would need to be accomplished with stealth.