Troubling Signs Ahead for the F-35

In its budget request submitted to Congress, the Pentagon plans to request 78 new aircraft. That’s six less than the Defense Department forecasted it would need for fiscal 2020. And as each fighter jet has a price tag of $85 million, that means over half a billion dollars in lost sales for Lockheed Martin—principal planemaker and the Pentagon’s top weapons supplier—and partner Northrop Grumman which supplies parts for the F-35. 

This is a significant change in direction for the military, which has been saying for years that it needs the state-of-the-art fighter jet—and is suddenly balking at the size of next year’s order. 

For the current year, Congress approved $9.34 billion for 93 F-35s, 16 more than requested. And for fiscal 2018, Congress boosted the 70 jets requested up to 90. Senator James Inhofe, chairman of the Armed Services Committee, has said he wants to triple F-35s purchased by 2024, making it the most ambitious procurement request on his agenda for next year. 

If history really does repeat itself, then lawmakers will likely put those six jets back on the final bill for 2020—and could even add more. 

Even President Trump is concerned the F-35 is too expensive. 

Acting Defense Secretary Patrick Shanahan is concerned about the long-term costs of maintaining and operating the F-35 fleet—which will eventually grow to 2,456 aircraft, surpassing $1 trillion over several decades. “The cost of sustainment is about the same cost as nuclear modernization,” he said. 

But Shanahan has no doubt about the plane itself. “What’s really important for people to always take away is I’ve found the aircraft—the F-35 as a product, its capability and performance—to be eye-watering,” said Shanahan. “It is high, high-performing—no ambiguity—no ifs, ands or buts.” 

The warfighter is only beginning its service life. Shanahan believes that driving down those costs as the plane starts its career is ideal over the span of the plane’s lifetime. “If you were ever going to realize high performance, you would do it on the front end. We have a small window.” Shanahan, a former Boeing executive, said he has “decades of experience” in managing the costs of operating and maintaining aircraft. His concerns about the costs of sustaining multibillion-dollar weapons systems apply to all the companies involved in making the F-35: Lockheed Martin, Northrop Grumman, BAE, and other suppliers.

But while the U.S. is cooling on the F-35, the country’s allies are eager to buy the warfighter.

Poland has recently committed to buying 32 fifth-generation jets as part of a $49-billion initiative to modernize its military. It’s believed that Polish Defense Minister Mariusz Blaszczak is eyeing the F-35, the only fifth-generation fighter currently in production. The F-35s would replace Poland's Su-22 and MiG-29 aircraft—relics of the Cold War era.

Andrew Hunter, director of the Defense-Industrial Initiatives Group at CSIS, said “if the Poles are interested and willing to buy the F-35, the U.S. would very likely say ‘yes.’”

Several other U.S. NATO allies—Britain, the Netherlands, Norway and Italy—are also putting in orders for the F-35. But Germany recently declined to buy the warfighter, looking to replace its aging Tornado fleet with older but cheaper fourth-generation jets. And Japan is the largest international buyer of the F-35, a demand spurred by growing concerns over China.

The American military is keen to put the fighter into active duty. The Navy recently declared its fleet of F-35C fighter jets ready for war—joining the Marines and Air Force as the third and final service branch to declare their fighter jets ready for war.

“We are adding an incredible weapon system into the arsenal of our Carrier Strike Groups that significantly enhances the capability of the joint force,” said Vice Admiral DeWolfe Miller in a statement.

Lockheed Martin designed three variants of the fighter to suit the needs of each branch of the military: the F-35A for the Air Force, F-35B for the Marine Corps, and F-35C for the Navy.

The new reluctance from Washington over projected orders for the plane should be concerning to Lockheed Martin. The fighter jet already accounts for more than 25 percent of the company’s annual revenue, and by the time the F-35 is in full production, it should surpass 50 percent of total revenue.

But Lockheed has a 400 plane backlog so orders are steady for the moment. And if the planemaker achieves cost savings and efficiencies it anticipates when it scales up production, the plane will become that much more appealing to buyers abroad—perhaps enough to compensate for the Pentagon’s order reduction.