F-35 PEO: “any foreign partner pooling out will have an effect on the others, a ‘death spiral’”

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Controlling Costs

Lack of transparency about the flyaway and operational costs of the F-35 caused significant embarrassments to some of the strong supporters of the program. The cost of the F-35 has soared dramatically in recent years. From a fighter plane that would cost $69 million in 2001 the cost of a single Joint Strike Fighter soared to over $137 million in 2012, with more than twice that cost projected in operating costs. F-35 PEO Lt. General Bogdan claims these costs hikes are now over, and, with tighter control and better learning curve, the production cost of planes currently being manufactured is already dropping. According to JPO estimates confirmed recently by prime contractor Lockheed Martin, the flyaway cost of an F-35A is expected to be $85 million in 2020. Bogdan attributed the savings to tighter, more efficient management of the program, both at the JPO and the contractors, where personnel changes meant refocusing on performance efficiency and timely delivery.

Bogdan cautioned that if reductions are made in procurement funding, fewer aircraft may be ordered in LRIP Lot 7 (FY13 budget) for the Navy and the Air Force. “While this would slightly lessen the cost burden imposed by concurrency, fewer aircraft in LRIP Lot 7 would increase the unit cost of the remaining aircraft in Lot 7.” Bogdan warned, “Our international partners are closely watching unit cost and are highly sensitive to cost increases.” He added.

Furloughs of civilian workers “will have immediate negative consequences,” he added. It would cause a reduction in testing and could reduce productivity by a third, he explained.

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Other topics addressed by Bogdan were:

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