USAF purchase commitment of 1,763 F-35 units still strong

By February 15, 2011F-35 News

Vice Admiral David VenletWASHINGTON, Feb 15 (Reuters) – The Pentagon on Tuesday said it remains committed to buying a total of 2,443 Lockheed Martin Corp (NYSE:LMT) F-35 fighter jets despite a major restructuring that postponed production of 124 airplanes until after 2016.

“We have not changed our inventory objective,” U.S. Navy Vice Admiral David Venlet told industry executives at his first public appearance since taking over as program manager of the Pentagon’s largest acquisition program last May.

Venlet said the Air Force still planned to buy 1,763 of the stealthy new fighter jets, and the Navy planned to buy 680 for the Navy and Marine Corps, although it was considering whether to change its mix of carrier and short takeoff variants.

Decisions on that issue would be announced by the service chiefs in coming weeks, Venlet told a luncheon hosted by the National Aeronautic Association.

Venlet said he was confident that the latest restructuring, the program’s second in less than year, was realistic and achievable because it was based on “very deep assessments” of all facets of the program, including technical issues, the manufacturing process, testing, and the supply chain.

Earlier reviews were more top down, while these assessments were bottom up, he noted.

Venlet said the decision to add $4.6 billion to the program was carefully and repeatedly vetted, and he was confident that the extra money would suffice to complete its development.

He said Pentagon acquisition chief Ashton Carter had told him that officials had been disappointed when earlier minor tweaks did not produce results. Venlet said he took it to heart when Carter told him, “I don’t want to be disappointed.”

The admiral acknowledged that postponing production of 124 jets as part of this restructuring on top of 100 jets already deferred earlier would drive up short-term unit costs since the program was still on a very “steep learning curve.”

For the next few years, he said it would add in the range of $4 million to the cost of each airplane, tapering off to around $1 million in a few years.

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