The biggest question at the moment for Lockheed Martin Corporation (NYSE:LMT) according to, Jane Wells, on CNBC is whether the company will be able to debut its new F-35 war planes at the Farnborough air show next week. Currently, all the fleet of the planes have been grounded by the Pentagon, due to an engine fire in one of the planes. If the F-35 does not make it to the Farnborough airshow, it will be a huge embarrassment for the company.
“We are still waiting to see if Lockheed is going to debut the jet at the Farnborough Air Show next week, in England, currently, all the fleet has been grounded by the pentagon due to an engine fire. We don’t know if the plane is going to be there” said Mrs. Wells.
Escalating costs for the jet has been one of the most contentious issues between the company and the department of Defense. The company has been asked to reduce the cost of the jet so that it can be nearly equal in costs, with the fourth-generation jets at the end of the decade.
According to Wells on CNBC, Lockheed Martin Corporation (NYSE:LMT), Northrop Grumman Corporation (NYSE:NOC) and BAE Systems PLC (ADR) (OTCMKTS:BAESY) have agreed to invest a total of $170 million over the next two years to facilitate reduction OF costs for the jets to under $80 million by 2019. F-35 Program manager has already said there are over 300 initiatives that when carried out could result in cost savings of up to $1.8 billion in the coming years.
“Lockheed is addressing the other issue with the F-35, its escalating costs. Announcing an agreement with the pentagon today to reduce that cost so that this fifth-generation aircraft would be equal to the price of the fourth generation at the end of the decade.” Said Mrs. Wells.
Wells report’s that if the affordability measures being initiated by Lockheed Martin Corporation (NYSE:LMT) are successful in the next two years, the American government has the option to invest additional money. Lockheed and its partners are working on reducing the costs of the F-35 so that it is nearly equal in costs to other jets in the market but with far more advanced capabilities.