WASHINGTON — Lockheed Martin’s production of the latest upgraded F-35 Joint Strike Fighters is slipping further behind schedule, and deliveries likely will not resume until the third quarter of 2024, the company said Tuesday.
Lockheed CEO Jim Taiclet told investors in an earnings call that the business now expects to deliver between 75 and 110 F-35s this year — fewer than the roughly 150 annually the company typically aims to deliver.
The delivery disruption of the newest F-35s, intended to features upgrades known as Technology Refresh 3, means Lockheed’s sales of the jet took a $400 million hit last year.
Taiclet said the company is making progress on the jets enabled with the TR-3 upgrades, which would come with software and hardware improvements including better displays, computer memory and processing power. But the system maturation process “is taking somewhat more time than we originally anticipated,” he added.
“The second quarter customer acceptance of delivery software remains our target,” he said. “However, we now believe that the third quarter may be a more likely scenario for a TR-3 software acceptance.”
The TR-3 upgrades are needed to prepare the F-35 for a further wave of upgrades known as Block 4, which would allow the jet to carry more precision weapons, advanced sensing, jamming and cybersecurity capabilities, and more accurate target recognition. Rep. Rob Wittman, R-Va., worries TR-3 delays could in turn delay the rollout of Block 4 upgrades.
“We are taking the time and attention to get this [TR-3] technology insertion right the first time because it will be absolutely worth it,” Taiclet said. TR-3′s features “will provide our customers with the onboard digital infrastructure of data storage, data processing, and pilot-user interface to provide unmatched capabilities for many years to come.”
But TR-3, which was originally due in April 2023, has repeatedly slipped behind schedule due to software problems and challenges integrating it with the jet’s new hardware. In July 2023, Lockheed Martin began rolling the first jets intended for the TR-3 configuration off its production line in Fort Worth, Texas.
Because those jets could not undergo test flights the Defense Department requires before delivery, the military refused to accept them. New aircraft awaiting TR-3 are now stored at Fort Worth, and Lockheed said between 100 and 120 jets could remain there later this year.
The F-35 Joint Program Office said in a statement to Defense News that it and industry partners are focused on delivering capable fighters, but that delays in software maturity are still putting those deliveries at risk.
The JPO said it and Lockheed are working on a plan to allow the government to accept undelivered jets before the full TR-3 capabilities are validated.
“Any aircraft involved and delivered as part of the truncation plan will provide valuable capabilities to the warfighters while TR-3 completes final verification and validation,” the office said.
In November, the office confirmed a production F-35 had flown with an interim version of the TR-3 software installed. Flying jets with such early release versions of the software is “potentially” one way for deliveries to resume before TR-3 is done, the JPO said that month.
Lt. Gen. Michael Schmidt, who leads the F-35 program, told lawmakers in December that production of a few key components needed for TR-3 hardware also ramped up slower than expected, which is contributing to the delay.
When the Pentagon halted deliveries, it and Lockheed Martin still expected TR-3 to be ready between December and April 2024. But in September 2023, Lockheed and the JPO said TR-3 could take even longer. That revised schedule placed delivery at sometime between April 2024 — which would already be a full year late — and June 2024.
That schedule is now sliding further, it appears.
Taiclet said more than 90% of the TR-3 capabilities are now in flight test, and Lockheed is moving the software integration process forward to include more aircraft and mission subsystems.
Lockheed’s chief financial officer, Jay Malave, said the company is confident it can meet the new third quarter goal to begin delivering TR-3 jets. But if the schedule slips further, he explained, Lockheed would have to reconsider its production pace of F-35s and possibly slow it down.
The company is bleeding cash due to the F-35 delivery halt — and the wound does not appear likely to heal soon.
“As we make progress [on the] TR-3 program, as well as getting ourselves into production, it’s difficult to take risk and rely on risk retirements as we’re still facing this program, and the progress we’re making there,” Malave said. “And so we assume that profit adjustments slow down in 2024 on the F-35 program.”
Lockheed Martin delivered 98 F-35s in the previous TR-2 configuration in 2023, including 18 in the fourth quarter, Taiclet said. The company originally planned to deliver between 147 and 153 fighters last year.
The delivery halt meant Lockheed’s net F-35 sales for the year dropped $400 million, partially offsetting the growth in other areas. Lockheed’s classified Skunk Works unit saw its sales grow by $540 million in 2023, and rising production of F-16s meant its sales grew $230 million for the year, the company said.
Despite the F-35′s troubles, Lockheed’s aeronautics sector saw its sales grow 2% in 2023 to nearly $27.5 billion. The aeronautics sector’s 2023 profit ticked down about 1% to $2.8 billion.
Author: Stephen Losey
Source: DefenseNews
