FARNBOROUGH, England — Lockheed Martin on Monday unveiled a slate of new affordability initiatives meant to slash F-35 procurement and sustainment costs by billions of dollars.
The company will invest up to $170 million over the next two years to extend its existing "Blueprint for Affordability" measure, it announced at Farnborough International Airshow. It is also starting a new program to reduce sustainability costs for the airplane by $1 billion over the next five years.
Lockheed and F-35 subcontractors Northrop Grumman and BAE kicked off the Blueprint for Affordability program in 2014, using $164 million of their internal funding to improve manufacturing processes, tooling and assembly. For example, the companies altered the way they create bulkheads, reducing the amount of aluminum by 4,700 pounds, Marillyn Hewson, Lockheed's president and CEO, said Monday at the air show. That alone will cut $31 million over the program's life cycle.
So far, 193 projects are in progress and are expected to shave $1.15 million per plane off aircraft produced in the ninth batch of low-rate initial production (LRIP) and $1.7 million for aircraft in LRIP 10.
"Now it's time we build on that momentum," Hewson said. "We are confident that by extending the Blueprint for Affordability for Production for an additional two years, our industry investment will yield savings in excess of $4 billion for the life of the program."
Lockheed, Northrop and BAE are also starting a "sustainment cost reduction initiative" aimed at cutting operations and maintenance expenses by 10 percent during fiscal 2018 through fiscal 2022. The vendors will invest $250 million and hope to reap at least $1 billion in savings over five years.
The companies are considering projects such as establishing regional sustainment areas for the F-35's logistics software and buying spare parts though block-buy contracts. Invested funds could also go toward improving the processes and equipment used throughout the sustainment process, Hewson said.
The stated goal of the Blueprint for Affordability measure is to drive down the unit cost of an F-35A to $85 million by 2019.
"I think we're on track to do it. We haven't quite settled lots 9 and 10 yet," Pentagon acquisition head Frank Kendall said on Sunday, referencing a yet-unfinished contract agreement between the Defense Department and Lockheed for LRIP 9 and 10 jets. "We keep saying we're close, but we're not done until we're done. I think we will continue to the trend to cost reduction."