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Canceling Lockheed F-35 Said to Be Among Pentagon Options

August 02, 2013

Canceling Lockheed F-35 Said to Be Option in Pentagon Review

Lockheed Martin Corp.'s F-35 jet is the Pentagon’s costliest weapon system, with the estimated price tag of $391.2 billion for a fleet of 2,443 aircraft, up 68 percent from the projection in 2001, as measured in current dollars. Photographer: Mike Fuentes/Bloomberg

Canceling the $391.2 billion program to build Lockheed Martin Corp. (LMT:US)’s F-35 fighter jet is among options the Pentagon listed in its “strategic review” of choices if forced to live with automatic budget cuts, according to people familiar with Defense Department briefings.

The F-35 was a program listed for potential elimination in charts at briefings held July 31 by the Defense Department, according to the people, who asked not to be identified discussing the closed-door sessions.

Scrapping the fighter wasn’t among options disclosed to reporters that day by Defense Secretary Chuck Hagel as he outlined in broad terms results of the review he ordered of alternative approaches if the military must continue to absorb about $50 billion a year in cuts under the process known as sequestration. Hagel indicated the Pentagon may have to choose between a “much smaller force” and a decade-long “holiday” from modernizing weapons systems and technology.

“We have gone to great lengths to stress that this review identified, through a rigorous process of strategic modeling, possible decisions we might face under scenarios we may or may not face in the future,” Pentagon spokesman George Little said in an e-mailed statement. “Any suggestion that we’re now moving away from key modernization programs as a result of yesterday’s discussion of the outcomes of the review would be incorrect.”

Protecting F-35

The F-35 is the Pentagon’s costliest weapon system, with the estimated price tag of $391.2 billion for a fleet of 2,443 aircraft, up 68 percent from the projection in 2001, as measured in current dollars. The rising costs and troubles in building the plane as it’s still being developed have led to criticism in Congress.

The Pentagon moved to protect the F-35 from sequestration’s initial impact this year, locking in several contracts before the cuts took effect. Frank Kendall, the Defense Department’s chief weapons buyer, has said he will continue to do his best to protect the plane built by Bethesda, Maryland-based Lockheed in the future.

Based on that track record, “the implication is that any ‘option’ to kill the program is an academic exercise rather than a serious possibility,” according to Loren Thompson, a defense analyst with the nonprofit Arlington, Virginia-based Lexington Institute. Thompson wasn’t briefed on the charts.

While the Pentagon and its supporters have lobbied for relief from sequestration, President Barack Obama and congressional leaders aren’t engaged in active efforts to find an alternative to the automatic cuts.

Protecting Weapons

In Hagel’s presentation to reporters, he cited the F-35 among weapons systems that could be protected if substantial cuts are made instead to forces.

Asked on July 31 whether there is an emerging consensus in the Pentagon about protecting forces or weapons capability, Admiral James Winnefeld, vice chairman of the Joint Chiefs of Staff, predicted “we will edge slightly probably toward capability, because we have to keep our industrial base alive, we have to keep focusing on new technologies.”

Pentagon officials and the Government Accountability Office have said this year that the F-35 is making steady progress in development and flight testing.

Lockheed and the Pentagon reached an accord this week for the company to produce 71 more F-35 jet fighters, saying costs per plane have been reduced by about 4 percent.

‘High Priority’

“The F-35 is a very high priority,” Kendall, the undersecretary for acquisition, said in July 15 interview. “Could we protect it completely? I’m not sure. We have to look at all the trade-offs. We may address some of those decisions in the fall, but right now, we are committed to the program. That hasn’t changed.”

The supersonic F-35 was intended to transform military aviation. Three versions for the Air Force, Navy and Marine Corps would be built off a common assembly line, an approach designed to permit faster production, reduced costs and compatibility among allied air forces.

About a quarter of the aircraft would be purchased by other countries. Norway, Canada, the U.K., Australia, Turkey, Italy, the Netherlands, Denmark and the U.S. agreed in 2006 to cooperatively produce and sustain the F-35 jet. Israel and Japan later signed on to purchase jets and take part in their development.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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