Lockheed, Pentagon tout new F-35 deal said to lower cost per plane

FORT WORTH, Texas — Lockheed Martin and the Pentagon announced a deal Monday on a production contract for the next batch of F-35 fighter jets that it says will lower the price per plane by 3.6 percent.

The contract, expected to be finalized in the next several weeks, would cover 43 F-35 aircraft including 29 for the U.S. military, the first two for Israel, four for Japan, four for the United Kingdom and two each for Norway and Italy.

Deliveries from what is known as “Low-Rate Initial Production lot 8” would begin in 2016. The Pentagon said cost details would be released later, but sources told Reuters last week that it is worth about $4 billion.

In a statement, Lt. Gen. Chris Bogdan, the top Pentagon officials over the F-35, said the agreement represents the program’s “ongoing maturation.”

“Once production of (the new contract’s) aircraft is completed, more than 200 F-35s will be in operation by eight nations,” he said.

The F-35, which is being built in west Fort Worth, Texas, has been dogged by technical problems and cost overruns for years but has made progress on both fronts in the past year.

However, this summer, the military’s fleet was grounded after an engine caught fire at Eglin Air Force Base in Florida, forcing the Pentagon to cancel the F-35’s scheduled appearance at the high-profile Farnborough International Airshow in England. Officials have since identified the cause of the fire, and flight testing has resumed with more frequent engine inspections.

In July in Fort Worth, the Pentagon’s top acquisition chief said the engine fire was unlikely to delay a planned increase in production, which is needed to reduce the average cost of the plane which has been running around $100 million. Lockheed and the Pentagon are aiming to boost production of the F-35, now at about 36 a year, to more than 120 a year by the end of the decade.

More than 6,000 people work directly on the F-35 program in west Fort Worth, and increased production could add upwards of 1,000 jobs over several years, Lockheed officials have said.

On Monday, a top Lockheed F-35 executive said the new production contract is indicative of efforts to make the plane more affordable.

“Affordability is a key performance parameter in today’s challenging acquisition environment.” said Lorraine Martin, Lockheed’s F-35 program manager in a statement. “Working together with our suppliers, we are making steady progress in reducing F-35 costs.”