US Air Force Seeking To Boost Fighter Buy Rate

With a price tag of over $200 billion, it is the largest weapons program in history.

The U.S. Air Force wants to speed the rate of production of its newest fighter jet, the F-35, a source familiar with the program said on Thursday, in the wake of the recent grounding of F-15 fighter jets and the Pentagon's reluctance to buy more F-22 fighters.

The F-35 or Joint Strike Fighter, built by Lockheed Martin Corp, is a family of warplanes for the Air Force, Marine Corps, Navy, and export. The Pentagon plans to buy 2,458 aircraft in three versions over nearly three decades, including 1,763 for the Air Force.

With a price tag of over $200 billion, it is the largest weapons program in history.

The Bush administration is due to unveil its proposed budget for fiscal year 2009 next week, including billions of dollars for the F-35 program.

Lockheed is already building small numbers of the fighters as part of the $40 billion design and development phase of the program. It is currently negotiating terms of a contract for six Air Force aircraft and six for the Navy for delivery as soon as 2010.

As long as the program stays on track, the company is due to build at least 16 more planes under "low rate initial production" before ramping up production in 2014 -- with an eventual goal of building 110 planes a year.

Now Air Force leaders want to speed up the production schedule in case more problems emerge with its fleet of older-model F-15 fighters, built by Boeing Co, said the source, who asked not to be identified.

"The Air Force wants to build the F-35 as fast as it can because we really need them," said the source, noting the changes would be included in a budget planning document now being compiled that will outline program funding from 2010 on.

Faster production rates could be good news for Lockheed, translating into larger orders earlier than expected.

The Air Force grounded all its older-model F-15s last November after one broke up during a training flight.

The initiative comes after remarks by Deputy Defense Gordon England that he opposes additional purchases of Lockheed's radar-evading F-22 beyond those already planned in the budget.

England recently approved plans to buy four more F-22s to replace lost aircraft as part of a supplemental war budget for fiscal year 2009, but he opposed entering into another multiyear production agreement for larger quantities of F-22s.

Senior Pentagon officials met to discuss the F-35 program on Monday, with a more formal review scheduled for Feb. 14.

At that review, the Pentagon's chief arms buyer, John Young, and other senior officials will consider the contract for 12 more F-35s that Lockheed and the Air Force are currently negotiating, Lockheed spokesman Tom Jurkowsky said.

Two sources familiar with the program said Monday's review went well and no problems were expected at the next meeting.

But two industry sources raised concerns about looming cost overruns in the current development phase that could force the Pentagon to notify Congress under the Nunn-McCurdy law.

The industry sources attributed the expected cost growth to issues with the engine for the new fighter, and to early assumptions that had proven to be too optimistic.

Jurkowsky said he was unaware of any potential cost increase that would trigger congressional notification, and underscored Lockheed's commitment to further cost cutting.

"The F-35 program is technically stable, retiring risk at a rapid pace, and focused on affordability," he said.

On Wednesday, Lockheed said it would lay off as many as 650 people as the F-35 program moves from the design phase toward production. About 850 jobs will be moved off the program this year, with as many as 200 people placed elsewhere in the company or offset by voluntary layoffs.

The program office also said it had no information about a breach of the cost thresholds set under the Nunn-McCurdy law, and declined further comment until after the Pentagon meeting.