Pentagon, Lockheed Martin Reach $34 Billion F-35 Deal

Lockheed Martin will produce nearly 500 F-35 fighter aircraft under a newly announced $34 billion Pentagon contract, company and department officials said Tuesday.

The 478 F-35 Lightning II planes included in the finalized agreement will primarily consist of 351 F-35A aircraft used by the Air Force. The order also includes 86 of the vertical-takeoff F-35B used by the Marine Corps and 41 of the carrier-based F-35C.

The U.S. military will receive 291 of the planes, while 127 will go to the Pentagon’s international partners and 60 will be purchased through the foreign military sales process.

The latest agreement, which adds to the more than 400 F-35s already delivered, will significantly reduce the aircraft’s costs compared to previous generations, officials said. Lockheed noted the price of the F-35, including the engine, will fall below $80 million each in the latter portion of the contract, and that costs were down more than 12% compared to the previous round of F-35 production.

"We were able to exceed our long-standing cost reduction commitment one year earlier than planned,” Greg Ulmer, Lockheed’s F-35 vice president and general manager, said in a statement.

Pentagon officials also noted that the production schedule will be slower in the latest contract, which will ease the burden on program contractors.

"With this award, we see, from a production perspective, the most dramatic rate increases in the production line are now behind us,” F-35 program executive officer Air Force Lt. General Eric T. Fick said in the announcement.