“What won’t work in my mind is an ever increasing set of demands by the government for more and more and more information and responsiveness, and an increasing expectation that the facilities that are available to meet those increasing demands ought to be reduced and reduced and reduced,”
Stevens’ unusually blunt remarks came as negotiations between Lockheed and the Pentagon for a fifth batch of 32 F-35 Joint Strike Fighters dragged on for more than five months.
Lockheed is developing and building the next-generation F-35 fighter for the United States and eight development partners - Britain, Italy, Turkey, Denmark, Norway, Canada, Australia and the Netherlands - plus two other countries, Israel and Japan.
The Pentagon projects it will spend $396 billion to develop and buy 2,443 of the new radar-evading, supersonic warplanes, with projected operating and maintenance costs likely to drive the program’s total lifetime cost to $1.51 trillion.
Stevens said Lockheed took the Pentagon’s concerns about overhead costs very seriously and had already cut its executive ranks by 26 percent. It also remained focused “on every expense account, every capital request, every individual ...job that we have in the company, how to reduce and how to streamline.”
But he said Lockheed was telling U.S. defense officials to be more focused in their requests for additional data.
“It falls a little bit into the domain of help us help you. If you want us to continue to focus on overhead reduction, then maybe we ought to look at how we work together with one another and exactly what is needed and be more specific and more tailored and more focused,” he said.
Stevens said the company’s cost-cutting efforts were also evident in its proposal for that contract, which came in lower than the fourth batch of planes, despite the Pentagon’s decision to scale back projected order quantities that had eroded the discounts it was able to negotiate with suppliers, he said.
“When it gets flatter, it gets harder to take cost out of the program,” Stevens said, adding that a strong affordability focus had still let Lockheed offer the government some savings.
He gave no details on the scope of the offered cost break.