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U.S. DoD Refuses Further F-35 Deliveries Due to Cost Issues and Production Errors

May 02nd - 2018

Image Credit : U.S. Air Force

The latest in a long line of critical issues plaguing the F-35 program, the United States Department of Defence (DoD) has informed producer Lockheed Martin that it will not accept further fighters due to a production error found last year on more than 200 of the next generation jets, regarding which a debate regarding which party will provide a financial remedy remains ongoing. A Lockheed Martin spokesman told Reuters in early April regarding the dispute: "The F-35 Joint Program Office has temporarily suspended accepting aircraft until we reach an agreement on a contractual issue and we expect this to be resolved soon.”

Lockheed Martin is set to deliver 91 new F-35 fighters to the U.S. military by the end of 2018 under a number of contracts, and the company has maintained its production lines running confident that its dispute with the DoD will be resolved. The Pentagon for its part has yet to comment on the issue, though a number of U.S. military official have reported poorly on the company’s performance in delivering the contracted fighters. Vice Admiral Mat Winter, director of the F-35 Program Office, stated in March that Lockheed Martin had been deliberately sluggish during negotiations with the military, going so far as to obstruct the process of providing precise figures on the plane's true cost. The director stated: “I will tell you, I am not satisfied with the collaboration and cooperation by Lockheed Martin… They could be much, much more cooperative and collaborative.” He further explained: "The price (per aircraft) is coming down, but it's not coming down fast enough. We could seal this deal faster. We could. They chose not to and that's a negotiating tactic… We don't know to the level of granularity that I want to know (is) what it actually costs to produce this aircraft.”

In late 2017 the Pentagon halted F-35 deliveries when parts locking together the fighters’ exterior shells were found to be highly corroded. According to a Reuters report, citing officials familiar with the flawed deliveries, the delivery of flawed fighters has caused a situation which "will likely be a complex logistical fix that could require technicians to travel widely to mend aircraft based around the world.” While the F-35 program is set to cost over $1.6 trillion dollars in total, the fighter was designed as a light and low cost complement to the F-22 Raptor which was set to be widely exported to American partners across the world - much like the F-16 and F-5 before it. Reducing costs has therefore been an important priority, and as production has expanded the unitary costs per fighter have been reduced considerably each year. F-35 production has thus benefitted considerably from economies of scale, which has given the next generation fighter a significant advantage over European competitors such as the Eurofighter Typhoon, Dassault Rafale and SAAB Gripen, which due to smaller production have been far less cost effective. The Eurofighter and Rafale, despite coming at a similar weight to the F-35 and lacking fifth generation technologies, have notably surpassed the U.S. platform’s unitary cost due to the sheer scale of F-35 production and the resulting far greater efficiency of the U.S. defence industries compared to their European counterparts. Should the DoD and Lockheed Martin fail to resolve their disputes promptly, and should production lines be halted as a result, this critical advantage could potentially be compromised.

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