Report: Pentagon mulls axing F-35 Strike Fighter
The jet fleet from Lockheed Martin is the most expensive weapons program in the US military's history.
The $391.2 billion program -- the Pentagon's most expensive ever -- was "listed for potential elimination in charts at briefings held July 31 by the Defense Department," according to Bloomberg News' well-connected Pentagon reporter Tony Capaccio.
Spokesman George Little said the review is part of a "rigorous process of strategic modeling" to consider possible decisions under scenarios the Pentagon may or may not face in the future.
But the fact that canceling the Joint Strike Fighter is even being contemplated in a worst-case scenario is noteworthy, given its rocky history.
Earlier this year, Air Force Lt. General Christopher Bogdan, who oversees the F-35 for the Pentagon, lambasted Lockheed Martin (LMT) and its engine-maker subcontractor, United Technologies' (UTX) Pratt & Whitney, for "behaving as if they are getting ready to sell me the very last F-35 and the very last engine and are trying to squeeze every nickel out of that last F-35 and that last engine."
J. Michael Gilmore, the Pentagon's chief testing officer, is another F-35 critic. Among the litany of complaints he leveled at the aircraft in a February report obtained by the watchdog group Center for Public Integrity was poor cockpit visibility. The plane breaks down quite a bit as well, with two-thirds of the fleet unavailable more than half the time.
Yet the F-35 continues to have plenty of defenders. As Capaccio noted, officials at the Pentagon and the Government Accountability Office have said this year that the F-35 is "making steady progress in development and flight testing." This week, Lockheed was given the green light to make 71 more of the aircraft.
Loren Thompson, a defense analyst at the Lexington Institute who is also a Lockheed consultant, told Reuters that it would cost four times the money to keep the military's existing aircraft flying compared with buying new Joint Strike Fighters. Besides, canceling the program would not save much money since it is in its early stages, Thompson told the wire service.
Defense programs are hard for lawmakers to kill since the industry has a foothold in many Congressional districts. This problem would be magnified exponentially given the breadth of the F-35 program. But the Pentagon is faced with a huge challenge in maintaining large forces and expensive weapons systems.
Something has to give.
--Jonathan Berr is a former Bloomberg News reporter. He doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.
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It's planes and techno like this that have given the US the edge for years. Just like NASA and the race to the moon created more off shoot techno that created more jobs than we could have ever imagined.
Microwave ovens, florescent light, transistors, WD-40, Kevlar, and many alloys to name a few. We are losing our edge in all techno as Obama guts the military. There are side effects of everything. I think this is one we don't want to gamble with.
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[BRIEFING.COM] S&P futures vs fair value: +1.50. Nasdaq futures vs fair value: +1.70. U.S. equity futures display modest gains after spending the bulk of the overnight session in negative territory. The S&P 500 futures trade higher by 0.1%. Among news of note, Democratic and Republican lawmakers have reached a budget agreement that would avoid another government shutdown. However, the plan still needs to be approved by both chambers of Congress.
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