Thursday, June 13, 2013

F-35: The effect of sequestration on the program

In a little noted article, Bloomberg points out the effect sequestration is having on the F-35 program (and others):
The Air Force’s $2.5 billion to buy 19 F-35 jets made by Lockheed reflects a sequestration cut of $503 million, according to the report. The Navy’s final $808 million to buy four carrier-model F-35s incorporates a $157 million cut, and its $1 billion for six Marine Corps short-takeoff-and vertical landing fighters reflects a $146 million reduction.

While the report doesn’t spell out the number of weapons cut in each program, defense companies will be able to use the report to determine “what funding is available for that particular program for the fiscal year,” John Roth, the Pentagon’s deputy comptroller for programs and budgets, said in an interview.
One of the major concerns among critics of the program have been the costs of the aircraft.  As we've pointed out here, as long as we see the aircraft bought in small batches, like the LRIPs, economies of scale aren't likely to be realized.   And, if you cut the small batches even smaller, one certainly won't see lower prices.  It is simple economics as USMC BGen (Ret.) Cheney explains:
Buying fewer F-35s is a tempting solution to the affordability issue. But reducing the buy creates problems too. Buying fewer aircraft means each one costs more. And the more each plane costs, the more risky it becomes to use them.

The B-2 bomber, developed and produced in the 1980s, is the textbook case of poor management. Attempting to cut costs, planners reduced the buy from 132 to 21, driving up the unit price to $2 billion per copy. The result was a bomber that the military was reluctant to use. “If it does badly, and it crashes, you’d have a $2 billion smoking hole in the desert, which could be a bit embarrassing,” one Air Force official explained. 
Or said another way, we've seen and done this before (let's include the F-22).  Let's not make the same mistake a 3rd time with a fighter absolutely critical to the future of our national defense.


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