March 12, 2013
Credit: Lockheed Martin
Lockheed Martin and Pratt & Whitney are improving production processes for the F-35 to the extent that they could manage to sell the anticipated 3,000 of the tri-service, multinational fighters, says Program Executive Officer U.S. Air Force Lt. Gen. Christopher Bogdan.
“That number is starting to get back into the sweet spot on the curve,” he says of the contractors’ costs, adding that the per-unit price is heading to where the “partners want it to be,” in the range of $80 million to $90 million.
The production lines had been riddled with what officials call “traveling work,” meaning tasks that cannot be done in their designated work stations owing to parts or supply issues, forcing workers to delay them until later in the assembly process.
Now, however, the companies are “doing a very good job recently of taking problems and quirks out of the production line such that it is running smoother.”
However, cost is highly dependent on production numbers, which are soft at this point. Bogdan notes that when Turkey, a production partner, deferred its aircraft two years from low-rate-initial-production (LRIP) lot 7, the remaining aircraft grew in price by $1 million apiece.
“We are all going to hang together or we are all going to hang separately,” Bogdan told an audience at the Credit Suisse/McAleese Defense Programs Conference in Washington March 12.
Meanwhile, Bogdan plans in the “next year or so” to release a request for proposals for management of F-35 training centers. He says he thinks he can save up to one-third of the cost of managing these centers by introducing competition into the process. Lockheed Martin and its primary subcontractors are invited to compete. “I have their attention,” Bogdan says, in terms of the price and deal they are currently discussing with the government.
Prior to releasing the request for proposals, Bogdan says the Joint Program Office is working to ensure it has proper data rights to allow for a competition. The way forward will depend partly on how cooperative Lockheed and Pratt are, he says, adding that they “have lawyers” detailed to protect their businesses.
Likewise, Bogdan sees competition farther down the road for managing support equipment and the fighter’s global supply chain.