The Defense Department and Lockheed Martin have unveiled a pair of initiatives that aim to reduce the costs of producing and sustaining the F-35 Lightning II aircraft and weapon system.
Lockheed, the primary F–35 contractor, and its principal industry partners BAE Systems and Northrop Grumman will invest an additional $170 million over the next two years in an effort to generate further savings in aircraft production costs under their Blueprint for Affordability deal with DoD, Lockheed said Monday.
The three companies have provided a combined $146 million of their planned $170 million in investments so far as part of the original two-year blueprint announced in July 2014.
Lockheed estimates the initiative will generate more than $4 billion in lifecycle cost savings over the remaining production run of the F-35.
Under the Sustainment Cost Reduction Initiative, the contractors aim to invest up to $250 million from fiscal year 2018 to fiscal 2022 to help reduce F-35 sustainment costs by at least 10 percent.
Lockheed projects the effort will save the fighter aircraft program as much as $1 billion over the five-year period.
CNBC reported Monday that Marillyn Hewson, Lockheed CEO, said a commercial demand for the F-35 also drives down the price of the jet.
“Now with that many aircraft delivered, we are down 57 percent from the first aircraft that was delivered, and we’re on a path to be down to a price of an $85 million jet by 2019,” Hewson told CNBC’s Tom Dichristopher Monday on the sidelines of the Farnborough International Airshow in the U.K.