WASHINGTON | Tue Sep 6, 2011 7:57pm EDT
(Reuters) – Lockheed Martin’s (LMT.N) multinational F-35 Joint Strike Fighter, the Pentagon’s costliest weapons program, is a critical part of U.S. security infrastructure and should be funded solidly despite tight budgets, the company’s chief executive said on Tuesday.
The radar-evading aircraft is facing greater scrutiny in the U.S. Congress as lawmakers look for ways to pare the nation’s $1.4 trillion budget deficit and $14.3 trillion debt.
“An investment in the F-35 is a fundamental investment in the security infrastructure and architecture of the nation that will yield returns for the next 40 or 50 years,” Lockheed CEO Robert Stevens told the Reuters Aerospace & Defense Summit.
“Let’s follow through on this program,” he said. “Let’s not underinvest in it now and let’s get these airplanes delivered to the field where they can make a difference.”
Stevens said the plane’s flight testing was ahead of schedule this year. At the end of August it was 8 percent ahead on flights and about 11 percent ahead on the number of test benchmarks it had completed, Stevens said.
The aircraft is currently in low-level initial production but is expected to ramp up to full production runs by 2015 or 2016 once it gets the go-ahead from the U.S. government.
“The supply chain is maturing,” Stevens said. “We’re seeing greater cycling of the line. We’d like to see the momentum continue to build as we converge on that full-rate production decision.”
The Pentagon views the F-35’s radar-evading design as necessary to counter the increasing sophistication of air defenses designed to prevent the kind of aerial dominance the United States has maintained over the past 20 years.
The Defense Department is currently planning to purchase 2,443 of the aircraft through 2035, at a total cost of some $385 billion. It has been developed with eight foreign partners to replace at least 13 types of aircraft for 11 nations initially.
Stevens said Lockheed expects to sell about 750 aircraft to the consortium partners involved in the plane’s development.
The F-35 could account for more than 20 percent of Lockheed’s overall revenues, depending on overseas sales and the speed of U.S. acquisitions, once full production starts.
United Technologies Corp (UTX.N) unit Pratt & Whitney, the maker of the F-35’s engine, estimated that revenues from the aircraft would be $1 billion annually, or about a third of all revenues from its defense engine business, Pratt’s chief executive David Hess told the Reuters summit.
Stevens expressed optimism about the future of the F-35 program, likening it to the company’s F-16 fighter jet.
“We look at the F-16 program that’s delivered 4,400 airplanes in 25 countries,” he said. “The F-16 is just one of the airplanes that the F-35 will replace. The long-term future of the program has real promise. That promise could well take revenue generation in excess of 20 percent.”
The F-35 has come under fire for production delays and rising costs. Former defense secretary Robert Gates last year put the Marine Corps’ short-takeoff version of the plane on probation, threatening to cancel it unless its production problems are resolved.
(Reporting by David Alexander; Editing by Phil Berlowitz)