Key Points
- Annual production is targeted at 156 aircraft.
- Congressional authority and funding remain necessary for a formal contract.
- Lockheed estimates the programme will support 317,000 US jobs.
- The company projects nearly $79 billion in annual economic activity.
ISLAMABAD: Lockheed Martin has entered an initial production and sustainment agreement with the United States Department of Defence covering at least 850 F-35 Lightning II fighter jets over the next 10 years, according to a report published by Reuters.
The defence contractor will self-fund at least $7 billion in initiatives supporting the programme, while aiming to maintain annual production at 156 aircraft, Reuters reported, citing statements from the company and the US defence department.
Announced on October 22, the framework also covers international customer orders, initial spare parts, modification kits and long-term sustainment. However, it is not a final procurement contract, and its implementation depends on the necessary multi-year contracting authority and funding.
Contract still pending
The agreement does not constitute a formal order for the aircraft. Instead, it establishes a framework for a longer-term procurement arrangement intended to provide greater certainty to the manufacturer and its suppliers.
“If granted multi-year authority in the coming months, the F-35 Joint Programme Office and Lockheed Martin will work to finalise contract terms, pricing and schedules through a formal contract award,” the company said.
Under-Secretary of Defence Michael Duffey said the agreement represented a change in how the United States was seeking to strengthen its defence industrial base and accelerate weapons production.
“We have fundamentally changed how we stabilise the American defence industrial base to produce at speed and scale.” – US Under-Secretary of Defence Michael Duffey
“We have fundamentally changed how we stabilise the American defence industrial base to produce at speed and scale,” Duffey said.
“By aligning financial incentives with actual performance, we are ensuring our warfighters are equipped with the lethal capabilities they need to fight and win,” he added.
Billions in investment
Lockheed Martin said it would independently fund at least $7 billion in initiatives to support the F-35 programme. The investment is intended to expand industrial capacity, improve production efficiency and strengthen the supply chain.
The company expects more predictable orders to help suppliers plan purchases of raw materials and critical components, reduce manufacturing bottlenecks and improve the availability of spare parts.
Lockheed estimates the arrangement will support approximately 317,000 jobs in the United States and generate nearly $79 billion in annual economic activity over the next decade.
The agreement comes as the United States and other countries increase defence spending amid continuing geopolitical conflicts and growing demand for advanced military equipment.
F-35 programme
The F-35 Lightning II is a family of stealth multirole combat aircraft developed by Lockheed Martin for the US military and international partners. Its low-observable design is intended to reduce its detectability by enemy radar, while its integrated sensors and electronic systems support air combat, strike missions and intelligence gathering.
The aircraft programme is central to Lockheed Martin’s aeronautics business, accounting for close to 40 per cent of the division’s quarterly revenue.
Production challenges
Maintaining production at 156 aircraft annually is a central objective of the framework. The company expects long-term planning to make it easier to invest in manufacturing facilities, procure materials in bulk and coordinate deliveries with its international supply network.
The new framework seeks to address some of these challenges by linking longer-term procurement planning with investment in industrial capacity, spare parts and sustainment.
