Lockheed Martin, in a Dogfight with Boeing, Puts the F-35 on Sale (excerpt)
(Source: The Motley Fool; posted May 18, 2019)
By Lou Whiteman
Lockheed Martin, seeking to give its F-35 a leg up against a rival fighter offered by Boeing, is dramatically reducing the F-35 sticker price for the next batch of jets it will sell to the Pentagon.

The aerospace company is offering the base model of the fifth-generation F-35 for $80 million apiece in negotiations with the Pentagon, according to a report from DefenseOne. That's an 11% reduction from the $90 million price last September when the last tranche of the fighters was ordered.

The F-35 has been marred with lengthy development delays and cost overruns, but the plane is now operational and is steadily becoming a key part of the U.S. arsenal. The Pentagon is expected to finalize its next order for the fighter this summer. Analysts have been expecting each batch to come in cheaper than the last, but the amount of this latest reduction is likely to take some by surprise.

New for the price of old

Lockheed Martin has been under constant pressure to bring down the cost of the F-35, but the urgency has increased since the Pentagon reversed course and decided to buy new Boeing F-15s for the first time in two decades. The modernized F-15EX is significantly upgraded compared to the original 1960s-era plane, with a sophisticated electronics suite, but it's still last-generation technology that up until recently was of little interest to military procurement officials.

The decision to buy F-15s, according to the Pentagon's acquisition summary, "reflects the Department's strategy to layer capability to address different threat situations." The government is buying F-35s "to address advance technology aircraft being deployed by Russia and China," the report says. But to defeat lower-technology platforms, it wants to use older designs "which nominally have lower operating costs when compared to 5th generation combat jets" such as the F-35. (end of excerpt)


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