Navy may have to lower its expected orders of Lockheed Martin's (NYSE:LMT) F-35 amid budget pressure, as the entire program's buying plan is under review.Here.
The Navy may only order as few as 12 of the F-35C variants each year vs. the current plan to order 20 of the stealth jets annually during the 2020s.
"I think the current realities of the budget and other priories inside the Navy may drive something between those two numbers, but we're still on the path to (initial operational capability) for our first squadron in 2018," said Naval Air Forces Commander Vice Adm. Mike Shoemaker, at the U.S. Center for Strategic and International Studies on Wednesday, according to Flightglobal.
I've talked about this long enough that many are bored by it, but the facts are the facts.
The US Navy has to fund a new ballistic missile sub, buy ships, upgrade aircraft, deal with staffing realities...there just isn't room for a fantasy buy of F-35's.
Oh and did you notice the wording?
"The Navy may only order as few as 12...each year vs. the current plan...."That's classic death spiral talk. You buy less or at a reduced rate and the price spikes. That means you can buy fewer than programmed which means that the price rises for everyone.
Of course General Dunford already signalled this....via Breaking Defense....
“Given the evolving defense strategy and the latest Defense Planning Guidance, we are presently taking the newest strategic foundation and analyzing whether 2,443 aircraft is the correct number..."So yeah boys and girls.
The death spiral is here. They just haven't told you yet (directly).
So what should you expect?
Expect the USMC to attempt to do accelerated buys of the airplane NOW! You're probably going to see the UK piggy back off those buys to try and force down the cost NOW!
It won't work, the budget won't allow it...but it will be fun watching all the "Game of Thrones" intrigue.