When the U.S. Department of Defense selected Lockheed Martin to design the F-35 Lightning II Joint Strike Fighter in 1996, it likely had no idea the repercussions they would be facing sixteen years later. After billions of dollars in cost overruns, production delays, upgraded F-16s and close cancellation calls, the Pentagon has had to reduce its order by 179 planes for five years, adding $60 billion to its support cost. Now, the government's practically begging Lockheed to put a higher priority on the completion of the long-term F-35 project, and less of a priority on immediate profit.
The cost of the plane would have been $65-$70 million when it was supposed to be completed in 2010. However due to inflation, Lockheed estimates its 2012 price at about $112.5 million. The entire inventory is being produced for the Air Force, Navy and Marine Corps variants, and at the time of the program’s conception, the F-35 was supposed to be the elite of the fighter jets. However since 2001, there has been a 70 percent increase on the estimated total cost, which is now $395.7 billion, and other projects have taken precedence over the very expensive F-35 Lightning II. Estimates put the F-35's final price tag at around $1.5 trillion.
One would think that a major corporation would do all that it could to satisfy its biggest buyer, especially if that buyer is the U.S. government. Lockheed, however, appears to make their own rules without answering to anybody. In a recent announcement, Lockheed employees were told that they were in danger of being laid off if the Pentagon cut their spending. This frantic reaction reflected the heat they must feel from the decrease in the national security budget, as well as their motive to string the Pentagon’s spending along for as long as they can.
According to Lockheed’s company profile, 82 percent of their $46.5 billion in revenue came from the U.S. government last year, and they have plenty of work with aerospace and various defense sectors to keep their employees secure and satisfied. This is not to mention the $25.4 million in compensation its CEO receives.
It makes absolutely no sense that the U.S. government would need to request their manufacturer to place a higher priority on their order when they are their leading source of profit. With $81 billion in backlogged orders, the relationship between the Pentagon and Lockheed needs re-evaluation. How long will large contractors get away with making their own timeframe and doing things only by their schedule? It makes one question who holds the real power and influence in our country’s current state of affairs.