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Lockheed Martin CEO-in-waiting Christopher Kubasik says the company is committed to righting ongoing problems with the F-35 Joint Strike Fighter, which has doubled in unit cost and slipped in schedule by six years until full-rate production, now slated for 2019. Meanwhile, the Government Accountability Office (GAO) said the government is responsible for $672 million of the $1 billion-plus cost overrun from the program’s first four low-rate initial production (LRIP) contracts.
Speaking at Lockheed Martin’s annual media day in Arlington, Va., on June 19, Kubasik was asked how the company under his leadership will better match program performance with expectations. Kubasik, currently president and COO, will replace Robert Stevens as CEO in January. “Part of what we’re focused on are the underlying processes, both internal reviews and the communication and candid dialogue with our customers. I think over the years, we’ve put the right processes and the right leadership in place to make sure that issues and concerns are elevated in a timely manner,” Kubasik said.
“At the end of the day, stability in requirements and stability in funding contribute a fair amount to the success of the program, and selecting the right suppliers and teammates to work closely with us,” he added. “As of today, we have just a handful of what we call ‘red programs.’ There are 9,000 programs at Lockheed Martin that you don’t hear a lot about that are on time, on schedule and helping our customers with their missions. But we’ll continue to look at ways to optimize our performance.”
In an assessment of the F-35 released on June 14, the GAO said instability in the program “has been and continues to be the result of highly concurrent development, testing and production activities.” The GAO estimated that $373 million in so-called “concurrency” costs have been incurred to correct deficiencies found in testing. The agency said the manufacturing process continues to absorb a higher-than-expected number of engineering changes resulting from flight testing. Steven O’Bryan, Lockheed Martin vice president of F-35 program integration and business development, said the GAO’s concurrency figure is a “government number.” He said he had not evaluated the cost-share of LRIP overruns, but suggested the GAO report is based on dated information from last year.
Stevens said Lockheed Martin has made the best of a machinists’ strike at the Fort Worth plant, now in its ninth week. The company replaced striking members of the International Association of Machinists and Aerospace Workers (IAM) with non-union personnel. Under the auspices of a federal mediator, management and the IAM were to meet on June 20 for the first time since the strike began April 23, according to a Lockheed Martin spokesman.
“There are some opportunities in every event,” Stevens said. “We’ve taken those opportunities to learn in great detail the characterization of the process on the floor, how we might refine that process and make it more efficient to bring several sections of the airplane back into a better balance. We’ve worked to use this time productively and well both in the near term and with regard to the long-term performance expectations of the program.”