Air Warfare, Global, Pentagon

Countries keep buying the F-35. Can Lockheed keep up with production demands?

WASHINGTON — Lockheed Martin’s F-35 Joint Strike Fighter has proven enormously popular around the globe, with new nations signing on annually and older members increasing their buys. It’s a good problem to have — but one that also has consequences, not just for the defense giant but for its biggest customer, the US Air Force.

Orders for the jet now exceed Lockheed’s production capability, a top US Air Force general told Breaking Defense, and while the service wants to increase its buy rate for the fifth-gen fighter, a maxed-out production line, combined with budgetary constraints, means that won’t be “possible in the very near term.”

In fact, Lt. Gen. Richard Moore, Air Force deputy chief of staff for plans and programs said, “I think Lockheed will have to [increase production] in order to meet the international demand. They’ve already got orders that exceed what they’re producing today.”

Moore made it clear he wasn’t ordering Lockheed to invest in new production with his comments. Instead, he said, he was simply stating the fact as he sees it. It’s a reality that analysts say has been boiling under the surface for some time, but is now coming to the fore: There are simply too many jets on order for everyone to get what they want, at least in a timely way, if Lockheed’s goal of 156 new builds a year starting in 2025 doesn’t increase.

According to JJ Gertler, a senior analyst with the Teal Group, there are over 2,500 jets currently on order over a planned 14 years of remaining production. That works out to a rate of roughly 180 jets a year if the existing schedule holds — a rate that Lockheed was reportedly aiming for before the pandemic hit, but which represents 24 more than the current annual capacity goal of 156.

That 156 number is expected to hold through at least production Lot 24, according to a report in Aviation Week. Adding potential stress to the production crunch is the reality that new customers could always sign on (or existing customers can expand their orders) and increase the backlog further. 

When asked about F-35 production in the spring, Air Force acquisition chief Andrew Hunter told lawmakers that Lockheed “would be very stressed to produce at a rate beyond [156 per year]” and that if the program wanted to up production, “we would probably have to increase tooling, and one of the significant limiters there is the center body piece.” 

Ultimately, Moore’s point still stands: for the F-35 program to meet the existing program of record, production is going to need to grow, or sacrifices are going to have to be made.

“The question becomes, does the US let other countries in line first and save procurement money and get its jets later? Or does it insist on getting its jets on time, which makes the other countries wait? Or is there some significant increase in production capacity?” Gertler told Breaking Defense. “One of those three things has to be true, possibly more.”

The Risk Of Expanded Production

International demand for the F-35, at least for about a decade, certainly looks strong, according to Richard Aboulafia, managing director at Aerodynamic Advisory. 

“You haven’t really scratched the surface in the Middle East yet. Eastern Europe is just getting going… Greece has a long way to go. A lot of Asian customers like Singapore have only started to order. So I think it’s going to be a fantastic late 2020s and early 2030s,” Aboulafia said.

But expanding production capacity is no easy decision, and for it to be possible, all of Lockheed’s suppliers would need to be on board. That’s not just big primes like engine maker Pratt & Whitney or center fuselage producer Northrop Grumman — it also includes hundreds of smaller vendors who supply parts down to the fighter’s “bits and pieces,” Aboulafia said.

A partnership with Rheinmetall for center fuselage production could help bump Lockheed’s capacity up to 165 builds a year, Defense One previously reported. Gertler, however, called that a “bizarre, very small increase” considering the hurdles of qualifying another source, which still falls short of the 180 per year target Gertler outlined.

“We continue to evaluate options to increase F-35 annual production capacity beyond 156 to meet the growing international demand and ensure the U.S. Services have the jets they need now and in the future,” Lockheed Martin told Breaking Defense in a statement. “We are actively working with our suppliers to increase that rate and continue to partner with JPO to align investments for future production and sustainment requirements.”

It might make business sense to increase production, according to Aboulafia, but it wouldn’t be without possible downsides. Meaningfully expanding capacity would take several years, he said, making for a “gangbuster five or six years” down the road, though not everyone involved might be on board with that payoff period. 

Other priorities like forthcoming domestic and international sixth-generation fighters, which at least by US standards will be prohibitively expensive, also threaten to eat into countries’ F-35 buys. Those jets are expected to come online in the 2030s, another reason why some industry partners might see risk in expanding production, Aboulafia said.  

Russ Goemaere, a spokesman for the F-35 Joint Program Office (JPO), told Breaking Defense that the JPO and its industry partners “are constantly assessing the current and projected aircraft forecasts from the U.S. Services, International Partners and FMS customers to understand and maintain the correct and most efficient steady-state production rate. 

“Additionally, it is important that any increase in production must include, and address, a corresponding increase in sustainment requirements to ensure availability of the fleet in the future,” Goemaere added. A recent watchdog report found that just 55% of the US F-35 fleet is mission capable, a number attributed to factors like insufficient depot capacity. 

Besides a next-gen fighter program collapsing or a new glut in international demand forming, governments may be able to decrease risks to scaling up capacity by using different incentives like a multi-year production contract, Aboulafia said — which a Lockheed executive previously told Breaking Defense could be possible for a future Lot 20 agreement. 

All things considered, however, Aboulafia said he wouldn’t bet on the program moving to increase production, especially considering its complexity and international structure. 

“It gets back to my favorite joke in the business, which is how many parts does it take to make a plane?” Aboulafia asked. “And the answer is all of them. You have to get everyone on board. That’s hard.”

And without an increase in production, F-35 decision makers are going to be left with the hard choice outlined by Gertler: delay giving jets to foreign customers and prioritize DoD, or deprioritize DoD to get jets to foreign customers. And the longer customers face delays, there is growing risk that they decide to cut their F-35 buy in favor of something else — a particular risk in Europe, which has two competing sixth-gen fighters looming in the 2030s.

Other Jet Requirements

F-35 production questions are part of the larger challenge facing a US Air Force that is hungry for newer fighters to replenish its legacy jets. In the fiscal 2024 budget, the service finally hit a goal of 72 new annual fighter procurements, though Moore has cautioned before that number relies on two active fighter production lines, the other being Boeing’s F-15EX.

Moore said that “under fiscal pressure” in years past, the service reduced the planned buy for the F-15EX — truncating an original program of record of 144 to 80 — and “over the last couple of cycles as the defense top line has gone up, we were able to add some of that back in.” As part of the FY24 budget, the service announced it would extend production for a final F-15EX fleet size of 104. 

Looking ahead, more fiscal constraints lie in the debt ceiling deal known as the Fiscal Responsibility Act (FRA). That legislation effectively caps FY25 defense spending at $895 billion, according to a Congressional Research Service report [PDF], a growth rate of about 1% and a much smaller budget increase than the Pentagon has enjoyed in recent years. (Some lawmakers, however, have said supplemental defense spending outside those caps might be on the table.)  

“We know that inflation has been planned to be about 2.1%. So there will be a reduction in the defense top line, and we’ll have to see what we’re able to do within that new top line,” Moore said.

The Air Force will also need to continue winning over lawmakers so that its requested divestments get approved, Moore said, who warned of dire consequences as a threat of a long-term continuing resolution, or possibly even a government shutdown, looms.

“If you look at the growth that was also a part of our budget from ‘23 to ‘24, not having all 12 bills passed by the first of January will reduce our budget by $12.7 billion. This is where we see risk,” he said. “A long-term continuing resolution could be a major failure, and certainly a government shutdown is something we all feel like we need to avoid.”