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The Pentagon and Lockheed Martin on Thursday announced a 10-year agreement to produce 850 F-35 warplanes, a deal that signals Washington’s long-term commitment to the stealth fighter.
The two sides did not disclose a value for the agreement, which comes as the Pentagon seeks multi-year contracts to expand American weapons production and strengthen the US defense industrial base. The “framework agreement” still requires congressional approval and funding.
Lockheed Chairman, President and CEO Jim Taiclet told investors on a call that the deal “cements (the plane’s) role as the free world’s key frontline fighter for years ahead.”
The Pentagon said the arrangement would “modernize and expand” the F-35 program. Beyond the aircraft themselves, Lockheed said, it includes initial spares, 10 years of modification kits and sustainment, and orders from international customers.
In exchange for the Pentagon’s 10-year commitment, Lockheed will fund $7 billion in projects supporting the F-35, according to the Pentagon.
Michael Duffey, the Pentagon’s top acquisition official, said the department has “fundamentally changed how we stabilize the American defense industrial base to produce at speed and scale.” He added that tying financial incentives to actual performance would ensure troops have “the lethal capabilities they need to fight and win.”
If approved, the deal would give Washington a “predictable, affordable, and resilient” fighter program, Lockheed said. The company pointed to billions of dollars in expected savings from “long-term pricing and industry volume discounts.”
Taiclet said the added certainty would allow the company to make upfront investments to expand capacity, improve efficiency and build a more resilient supply chain. He called that “good for the taxpayer, good for our suppliers and, most importantly, good for the United States and its allies.”
Lockheed said the program will support more than 315,000 jobs and generate nearly $80 billion in economic activity over the next 10 years.
The F-35 is a joint project between the United States and several allies and is among the world’s most advanced military aircraft. It is built in three versions, and a single plane can cost more than $100 million. Lockheed says more than 1,375 F-35s are based around the world. US forces have used the aircraft in combat during the US-Israeli war against Iran.
International interest remains strong. Last month, the United States announced approval of a $24.3 billion sale of 48 F-35s to Saudi Arabia.
Türkiye was expelled from the F-35 program in 2019 over its purchase of a Russian air defense system. It has recently expressed confidence that it will regain access to the jets, a prospect Israel strongly opposes.
Separately on Thursday, Lockheed reported third-quarter earnings that beat expectations, again helped by higher activity across all of its business segments. Its shares rose more than 7 percent in Thursday trading and closed at $590.2.
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