by Charles Alcock
Lockheed Martin believes it can balance the cost-reduction expectations the new U.S. administration has set for the F-35 fighter program with its profitability goals. At a January 24 analysts call to announce earnings for the fourth quarter of 2016, company president and CEO Marillyn Hewson indicated that the latest round of talks with President Donald Trump on January 23 bolstered her expectation that Lockheed Martin will soon reach agreement for 90 F-35s under a contract for low-rate initial production (LRIP) lot 10, for which the unit cost of the aircraft is expected to fall below $100 million.
In response to questions from analysts as to whether Lockheed Martin may come under further pressure to cut program costs, Hewson said that meetings with Trump had been “productive” and that he had “asked very good questions.” She indicated that unit costs are on track to fall to $85 million by the time Lot 13 is in production around 2019. “This isn’t about slashing our profit margins,” said Hewson. “We’re bringing costs down in line with our Blueprint for Affordability plan.”
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