A string of tweets posted by President-elect Donald Trump have been interpreted by many to signal the end of the F-35, the reality is seemingly quite different.
It’s now clear that Trump sought to cut F-35 costs, not cancel the hugely valuable programme which supports more than 151,000 direct and indirect jobs in the US and tens of thousands more around the world.
Marillyn Hewson President and Chief Executive Officer of Lockheed Martin said she had a “very good conversation” with Trump and that she had “heard his message loud and clear about reducing the cost of the F-35”, according to a statement released by Lockheed Martin.
Trump tweeted earlier in the month:
“Based on the tremendous cost and cost overruns of the Lockheed Martin F-35 I have asked Boeing to price-out a comparable F-18 Super Hornet!”
Hewson added later that the conversation was “productive” and that she had “conveyed our commitment to delivering an affordable aircraft to our military and our allies.”
The president-elect later relented, revealing his intentions and confirming what many in the industry had suspected, that this was simply an effort to drive down costs.
“It’s a little bit of a dance. But we’re going to get the cost down.”
At peak, the F-35 will support 25,000 jobs in the UK over the next few decades and pump £1bn a year into the economy. Cliff Robson, Senior Vice-President for the F-35 Lightning II programme at BAE Systems, said in an interview, referring to the estimated British 25,000 jobs either directly created or supported in the F-35 supply chain.
“It’s cheap when you look at what that investment is returning to the UK.”
When the jet reaches peak production, the programme will be worth some £1 billion to UK industry alone, according to research by KPMG the accounting firm. An estimated 25,000 UK jobs will be sustained across more than 500 companies in the supply chain.
The F-35 features a significant amount of British developed components, in addition to 15% of every jet sold globally being built in Britain. As the only Level 1 partner, the United Kingdom has garnered tremendous economic benefits from the F-35. British industry will build 15% of each of the more than 3,000 planned F-35s, in addition to a large volume of British developed aircraft systems including the electronic warfare suite.
The programme at peak will generate significant export revenue and GDP growth for the US, UK and many other partner nations.
A spending report earlier in the year also showed a steady cost drop for all variants of the F-35. On the 24th of March 2016, the annual Selected Acquisition Reports (SAR) for 2015 was released. It has been revealed that the Pentagon’s estimate for the total acquisition cost of the F-35 program is $379 billion, down from $391 billion projected in 2014.
According to a statement from the F-35’s project office:
“The overall Acquisition Cost (RDT&E, Procurement, and MILCON) of the program decreased by $7B in base year 2012 dollars (BY12$) and $12.1B in then-year dollars (TY$). The increase of $16B (BY12) and $95.2 (TY$) to Total Program Cost is the net impact resulting from a transfer of $300M to RDT&E, a $7.5B decrease in Procurement, an approximately $200M increase in MILCON, and a $23B increase in O&S.
The RDT&E increase is the result of a transfer of money from the Procurement account to the RDT&E account to fund the modification of 24 Operational Test aircraft for Initial Operational Test and Evaluation, in accordance with Service guidance.
This transfer out of Procurement into RDT&E had zero net effect on Total Program Cost.”
According to F-35 Joint Program Office chief Lt. Gen Christopher Bogdan earlier in the year:
“We are coming down the learning curve and the price curve a little steeper. We are coming down the price curve faster than we anticipated years ago.”
The average unit cost of the aircraft decreased by:
$1.8M for the F-35A
$0.7M for the F-35B
$1.0M for the F-35C
Babione later told reporters that the cost of the F-35A will drop to about $85 million by 2019. This is understood to be thanks to efficiencies and cost-cutting manufacturing technologies. The B and C variants are also steadily reducing in cost.
By contrast, the US Navy’s F/A-18 Super Hornet aircraft costs about $60 million apiece.
The estimate of annual operating cost decreased by an average of two percent and the estimated steady state cost per flying hour decreased by:
2.2 percent for the F-35A,
3.3 percent for the F-35B,
4.2 percent for the F-35C
These reductions were reportedly the result of improved maintainability and sustainability as the aircraft matures, the design stabilises, and maintenance of the aircraft becomes more efficient and effective.
F-35 unit costs have been going down with each successive lot of aircraft and will continue to.