Lockheed, Pentagon strike initial deal to produce 850 F-35 jets
LMT•Lockheed Martin reached an initial agreement with the Department of Defense covering at least 850 F-35 jets over 10 years, with the company aiming to maintain annual production of 156 aircraft. Lockheed will self-fund at least $7 billion in program initiatives, but the agreement is not an order.
1. Initial production agreement
Lockheed Martin entered an initial production and sustainment agreement with the Department of Defense for at least 850 F-35 Lightning II fighter jets over the next 10 years. The agreement covers international orders, initial spares and modification kits, and Lockheed aims to maintain annual production at 156 aircraft.
2. Funding and contract terms
The defense contractor will self-fund at least $7 billion in initiatives supporting the F-35 program. The agreement is not an order, but is counted as a prearranged long-term contract; the company said that if multi-year authority is granted in the coming months, it and the F-35 Joint Program Office will work to finalize contract terms, pricing and schedules through a formal award.
3. Expected economic effects
Lockheed estimates the agreement will support 317,000 U.S. jobs and generate nearly $79 billion in annual economic activity over the next decade. The company expects the arrangement to lower production costs and ease supply-chain constraints.
