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FG: LM Cuts Price For Next Batch Of F-35  
User currently offlineoykie From Norway, joined Jan 2006, 2755 posts, RR: 4
Posted (1 year 4 months 3 weeks 3 days 3 hours ago) and read 4673 times:

From fg:

Quote:
The agreement reached with the F-35 joint programme office after a six-month negotiating process applies to the next two lots of low-rate initial production, named LRIP-6 and LRIP-7, Lockheed says. The LRIP-6 prices are reduced by 4% compared to the fifth lot of production signed in December 2012. Lockheed also agreed to reduce the cost of the aircraft ordered under LRIP-7 by another 4%.
http://www.flightglobal.com/news/art...ice-cuts-for-next-71-f-35s-388923/

Between 4-8% price cut is a good step in the right direction!!! Finally more good news for the F-35!

[Edited 2013-07-30 14:09:54]


Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
34 replies: All unread, showing first 25:
 
User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 1, posted (1 year 4 months 3 weeks 3 days 3 hours ago) and read 4652 times:

Total details:
71 F-35's between Lots 6 & 7, allocation is not clear as to specific variants
36 aircraft in Lot 6, 35 in Lot 7, some aircraft allocated to foreign and partner nations
8% cost decrease over LRIP Lot 5, estimated to be a total of $7 billion dollars between the two lots
No cuts in planned procurement
Last LRIP 5 contract was $3.8 billion for 32 aircraft for reference


User currently offlinekanban From United States of America, joined Jan 2008, 3864 posts, RR: 27
Reply 2, posted (1 year 4 months 3 weeks 3 days 3 hours ago) and read 4644 times:
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may be good news, however it was noted in the press that with sequestration, it was either reduce or no contract.. I wonder how much more pad is left.. probably another 10-15%.

The other side the cost reduction may have come at a the price of leaving stuff off to be added by separate contract later (another military contractor favorite game).


User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 3, posted (1 year 4 months 3 weeks 3 days 3 hours ago) and read 4637 times:

Aircraft break down as follows:
LRIP 6:
18 F-35A's for the USAF
6 F-35B's for the USMC
7 F-35C's for the USN
Plus 3 F-35's for Italy, and 2 for Australia

LRIP 7:
19 F-35's for the USAF
6 F-35B's for the USMC
4 F-35C's for the USN
Plus 3 F-35A's for Italy, 2 F-35A's for Norway, and 1 F-35B for the UK

The next lot will be LRIP Lot 8, and that's a big lot (48 aircraft). LRIP Lot 8's breakdown is as follows:
19 F-35's for the USAF
6 F-35B's for the USMC
4 F-35C's for the USN
4 F-35B's for the UK
2 F-35A's for Norway
4 F-35A's for Italy
5 F-35A's for Israel
4 F-35A's for Japan


User currently offlineRevelation From United States of America, joined Feb 2005, 12961 posts, RR: 25
Reply 4, posted (1 year 4 months 3 weeks 3 days 2 hours ago) and read 4621 times:

Perhaps the headline should be "Taxpayers spend $7B on 71 Aircraft"?

We read in http://www.reuters.com/article/2013/...heed-fighter-idUSL1N0G016Z20130730

Quote:

On Capitol Hill, U.S. lawmakers remain skeptical since any problems found in testing could lead to big retrofit costs later.

"Aggressive overlap in designing, testing and procuring this aircraft earlier in its history got us into serious trouble and wasted a lot of money. This committee doesn't want to repeat that problem," said Senator Richard Durbin, chairman of the defense panel of the Senate Appropriations Committee.

The panel proposed funding 29 F-35s in the 2014 fiscal year beginning Oct. 1 but moved to limit a production increase in 2015 to ensure the aircraft's software and design are fully tested.

Durbin said the panel wanted to ensure the military focused on the "existing challenges we face honestly, both in testing as well as design and development, before ramping up." The appropriations panel also put limits on the amount of research and development funding that could be used for the F-35.

The Senate is still in the early stages of finalizing its 2014 appropriations for the F-35 and other arms programs. The proposal must be considered by the Senate and reconciled with the House of Representatives' plans before going to the president for his signature.

So it seems DoD is a bit ahead of the Congress on this one.

Quoting kanban (Reply 2):
The other side the cost reduction may have come at a the price of leaving stuff off to be added by separate contract later (another military contractor CONtractor favorite game)


Fixed that for ya!

Seems Congress feels that LM will be shipping lots of sub-par early frames knowing they're going to make up the difference in bringing them up to par later on.



Inspiration, move me brightly!
User currently offlineOroka From Canada, joined Dec 2006, 913 posts, RR: 0
Reply 5, posted (1 year 4 months 3 weeks 3 days 2 hours ago) and read 4606 times:

Quoting Revelation (Reply 4):
Seems Congress feels that LM will be shipping lots of sub-par early frames knowing they're going to make up the difference in bringing them up to par later on.

Software is software. It will never be 'done', just upgraded and new features beyond what was initially contracted added.


Are there any significant airframe fixes left unresolved other than the charlie tail hook issue? At this stage in the game, Im pretty sure they know about the big issues.


User currently offlinekanban From United States of America, joined Jan 2008, 3864 posts, RR: 27
Reply 6, posted (1 year 4 months 3 weeks 3 days 1 hour ago) and read 4570 times:
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Quoting Revelation (Reply 4):
Fixed that for ya!

Thanks.. some would have used the letter "U", but that's for the non av thread

Quoting Oroka (Reply 5):
Software is software. It will never be 'done',

while essentially true, this program is way behind on basic software.. I believe the Pentagon sent a note to China requesting any aggressive acts be postponed until 2025 because the targeting software was late.
  


User currently offlinetugger From United States of America, joined Apr 2006, 5785 posts, RR: 10
Reply 7, posted (1 year 4 months 3 weeks 3 days 1 hour ago) and read 4560 times:

Quoting kanban (Reply 2):
may be good news, however it was noted in the press that with sequestration, it was either reduce or no contract.. I wonder how much more pad is left.. probably another 10-15%.

You are about right, LM (and several other defense contractors) reported about a 12% operating margin. Nothing great but decent enough. Though I am sure some (many?) will bash it as gouging the taxpayer etc. I know there is waste and excessive items within the expenses that are used to arrive at the margins but I doubt it is anything to far out of spec with what happens in many companies.

I always wonder what people would consider to be acceptable. There are many other companies and industries that are more profitable so dollars and people will go elsewhere for high tech as needed. These are supposedly world leaders in high tech and technology in general.

Good news though on the costs coming down.

Edited to add:
Guess the margin isn't as good as I had thought:

Quote:
What it tells you is that the idea weapons makers are generating excess profits is laughable. Lockheed’s F-35 fighter may be the biggest weapons program in the history of the world, worth literally hundreds of billions of dollars, but to date Lockheed Martin has only realized about a 7% return on the effort. It seems the company might have done better by growing in the crushed-rock business.
http://www.forbes.com/sites/lorentho...dustry-profits-are-not-impressive/

Tugg

[Edited 2013-07-30 17:13:09]


I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
User currently offlinekanban From United States of America, joined Jan 2008, 3864 posts, RR: 27
Reply 8, posted (1 year 4 months 3 weeks 2 days 23 hours ago) and read 4530 times:
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Quoting tugger (Reply 7):
Guess the margin isn't as good as I had thought:

however I thought they were at the point of having to pay for some of the overruns.. so that might be figured in.. on the other side grocery chains manage on 3%..

where LM is hamstrung is in the reliance almost solely on military contracts.. Boeing at least has a robust commercial business.


User currently offlineBigJKU From United States of America, joined Feb 2007, 883 posts, RR: 11
Reply 9, posted (1 year 4 months 3 weeks 2 days 23 hours ago) and read 4527 times:

Setting aside all the various agendas being pushed the most interesting thing about this is that the price is coming down with even slightly increased production. That is a good sign of maturity and stability in the manufacturing process which is good news for the program.

I get that there is some fear that they will hit a major roadblock in testing and have large refit cost but those so far have been lower by healthy margins than what was initially estimated. By nature you can't really predict this sort of stuff but so far the predictions on refit cost have been high which is also good news for the program.

Overall this is good news.


User currently offlineOzair From Australia, joined Jan 2005, 881 posts, RR: 2
Reply 10, posted (1 year 4 months 3 weeks 2 days 23 hours ago) and read 4517 times:

Quoting BigJKU (Reply 9):
Overall this is good news.

And combined with what I posted in the other thread,

Operating costs are better understood now that the Marine Corps and Air Force are training F-35 pilots, and he predicted “we can make a substantial dent in projections” of operating costs. They will be reflected in the September cost numbers, he said. from http://www.airforcemag.com/DRArchive...5-No-Longer-the-Problem-Child.aspx

So not only is the acquisition cost dropping but the operating cost is expected to drop as well. I am not sure what a "substantial dent" is but at a guess would say we are looking at a 8-12% reduction in per hour costs.


User currently offlineOroka From Canada, joined Dec 2006, 913 posts, RR: 0
Reply 11, posted (1 year 4 months 3 weeks 2 days 22 hours ago) and read 4516 times:

Quoting kanban (Reply 6):
I believe the Pentagon sent a note to China requesting any aggressive acts be postponed until 2025 because the targeting software was late.

lol with all the data China got from hacks, maybe the pentagon should ask of they got any farther with the software than Lockheed did XD


I do think they severely underestimated how complex this software would be, but this will probably be the basis for all future Lockheed jets, other jets will use variations of this software rather than starting from scratch. Imagine asking Microsoft to sit down and write Windows 8 from scratch... even Microsoft would be looking at the better part of a decade to bring it to maturity. There is still code in Windows 8 that dates back to the early 80s.


User currently offlineoykie From Norway, joined Jan 2006, 2755 posts, RR: 4
Reply 12, posted (1 year 4 months 3 weeks 2 days 14 hours ago) and read 4423 times:

Quoting ThePointblank (Reply 1):

Thanks for sharing the breakdown of this order.

Quoting kanban (Reply 2):

It will be interesting to see how the price evolves as the production rate increases. From the news I get the impression that they have Madeleine good progress on LRIP8 already.

Quoting Revelation (Reply 4):

These early bird airplanes can be upgraded, just like the USAF is upgrading early F-22 Raptors.

Quoting BigJKU (Reply 9):

Good point! I agree the F-35 now seems more mature than the worst skeptics are claiming!



Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlineRevelation From United States of America, joined Feb 2005, 12961 posts, RR: 25
Reply 13, posted (1 year 4 months 3 weeks 2 days 9 hours ago) and read 4311 times:

Quoting tugger (Reply 7):
Good news though on the costs coming down.

Whenever you see a percentage being used you should ask yourself what is the basis of comparison.

In this case, it's the previous run of aircraft, whose price is far above earlier projections and far behind in schedule and completeness.

So the percent looks good only because it's being compared to something in a very sad state of affairs - the new aircraft are 4-8% less of a disaster.

Quoting BigJKU (Reply 9):
Setting aside all the various agendas being pushed the most interesting thing about this is that the price is coming down with even slightly increased production.
Quoting BigJKU (Reply 9):
That is a good sign of maturity and stability in the manufacturing process which is good news for the program.

We don't know either of these things to be true. It could simply being LM forcing itself to take less money because they fear the entire program is in jeopardy if they do not.

Quoting oykie (Reply 12):
These early bird airplanes can be upgraded, just like the USAF is upgrading early F-22 Raptors.

Right, but we're paying for them as if they are complete, yet they are not.



Inspiration, move me brightly!
User currently offlineBigJKU From United States of America, joined Feb 2007, 883 posts, RR: 11
Reply 14, posted (1 year 4 months 3 weeks 2 days 8 hours ago) and read 4301 times:

Quoting Revelation (Reply 13):
Whenever you see a percentage being used you should ask yourself what is the basis of comparison.

In this case, it's the previous run of aircraft, whose price is far above earlier projections and far behind in schedule and completeness.

So the percent looks good only because it's being compared to something in a very sad state of affairs - the new aircraft are 4-8% less of a disaster.

Nothing in that is necessarily untrue but it is also not the whole story either. This article is a pretty good breakdown of it all.

http://www.aviationweek.com/Article....l/awx_07_30_2013_p0-602401.xml&p=1

If we are going to get hung up on the cost today against the early program cost projections then yes, there is no way anyone could be satisfied with the program. Hell, if we want to drag some people into the streets and shame them publicly I suppose it would not be out of line. But at this point we kind of have to deal with the here and now. The US can either buy the aircraft or not at the price it cost today and the prices it will cost going forward. Everything else is the past at this point.

The news is important because in 2010 after the restructure Lockheed basically said that cost would be expected to decline by 25% for every doubling of the production rate. The production rates were up around 12% and the price is down by 4% and then 8% both of which are in line or ahead of that expectation. It shows that there are cost savings to be had as production scales up and that is a big deal for the program.

Does it get the program to where they thought it would be when first projected? No. But none of that can be changed at this point. The question is do you want the F-35 at the prices it will be offered at or do you want something else?


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 15, posted (1 year 4 months 3 weeks 2 days 6 hours ago) and read 4254 times:

[quote=BigJKU,reply=14] The question is do you want the F-35 at the prices it will be offered at or do you want something else?

For the USA and Israel, it'll be F-35s all the way but far fewer as the money isn't there to buy as many as planned. For most international "buyers", it'll be something else, I am pretty sure. The political engineering that the US defense industry has been so good at within the USA, does not work nearly as well internationally. Many countries will simply not order it beyond what they're already (most have ordered zero) for reasons of price. Whether they have industry work on the F-35 or not, is not relevant, except for Italy, as manufacturing can not be moved away now anyway, whether the host country itself orders or not.

Coming down 4% from around $200 million, is still totally unaffordable. You have to include all the parts, the engine, the long lead contracts awarded a long time ago and all other contracts for these tranches, etc..and the price is still astronomical.

LRIP-5 costs have been to date:
-- F-35A: $172 million per aircraft;
-- F-35B: $291.7 million per aircraft;
-- F-35C: $235.8 million per aircraft.

Retrofit not included.

http://www.defense-aerospace.com/art...%3E%28updated%29%3C%C2%A7i%3E.html

So take off 4% from here, and I am not surprised almost no international orders have come in and the few international planes delivered are basically stored. In LRIP-7, some international "orders" are listed, that have not actually been ordered by those countries. International countries are under no obligation to order the F-35 and most wont at these prices, IMHO. Apparently, LM can not manipulate foreign countries like it can Washington.

The fact that the Italian FACO can compete from day 1 on price against the LM line in Texas which has years of experience and a long learning curve already behind it and more volume, shows how there is something way wrong with the prices for the Texas built planes. What the Italian FACO is pulling off should not be possible.

I am glad the international countries are pushing back at LM, as Washington apparently can't.


User currently offlineoykie From Norway, joined Jan 2006, 2755 posts, RR: 4
Reply 16, posted (1 year 4 months 3 weeks 2 days 5 hours ago) and read 4220 times:

Quoting tommytoyz (Reply 15):
In LRIP-7, some international "orders" are listed, that have not actually been ordered by those countries. International countries are under no obligation to order the F-35 and most wont at these prices, IMHO. Apparently, LM can not manipulate foreign countries like it can Washington.

Norwegian government has confirmed their 2 F-35 in LRIP7 and issued a press release regarding the commitment. As long as the program is not canceled Norway will buy their planned 52 F-35 airplanes.



Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlinekanban From United States of America, joined Jan 2008, 3864 posts, RR: 27
Reply 17, posted (1 year 4 months 3 weeks 2 days 4 hours ago) and read 4206 times:
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Quoting Revelation (Reply 13):
Whenever you see a percentage being used you should ask yourself what is the basis of comparison.

Good old Dr. E. Deming used to blast away at the use of percentages in the news without any reference points.. nice to see you have the same concerns..

we'll know more when the contracts are let and hopefully how the manipulated the numbers.


User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 18, posted (1 year 4 months 3 weeks 1 day 23 hours ago) and read 4148 times:

Quoting tommytoyz (Reply 15):
The fact that the Italian FACO can compete from day 1 on price against the LM line in Texas which has years of experience and a long learning curve already behind it and more volume, shows how there is something way wrong with the prices for the Texas built planes. What the Italian FACO is pulling off should not be possible.

The issue is that the Lockheed Martin facility in Fort Worth, TX, is not Lockheed Martin owned; it's what is called a GOCO (Government Owned, Contractor operated) facility.

It's a massive assembly facility and was the plant where the F-16 was assembled. The plant in the past completed 280+ F-16's in a year. There's a ton of overhead costs that need to be absorbed, and of course, costs will be decreasing if volume is allowed to increase.

The Italian FACO is assembling most of the Italian F-35 and Dutch F-35 orders. That is around ~150 F-35's. The Ft. Worth facility will be producing thousands of F-35's.

Quoting kanban (Reply 2):
The other side the cost reduction may have come at a the price of leaving stuff off to be added by separate contract later (another military contractor favorite game).

Actually, that's a Pentagon and DoD thing. The DoD buys/develops the engines separately. This has been the general practice pretty much since at least WW2. LM has no real say in the matter.

Quoting BigJKU (Reply 14):

Does it get the program to where they thought it would be when first projected? No. But none of that can be changed at this point. The question is do you want the F-35 at the prices it will be offered at or do you want something else?

Also have to factor in inflation. For example, the full rate production F-35A's are expected to be around $75 million dollars in FY2012 dollars... however, adjust for inflation back to 2005 using the Consumer Price Index, you get just under $65 million a copy, which was the originally quoted and bandied about price by LM for a F-35A.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 19, posted (1 year 4 months 3 weeks 1 day 18 hours ago) and read 4099 times:

Quoting ThePointblank (Reply 18):
you get just under $65 million a copy, which was the originally quoted and bandied about price by LM for a F-35A.

Even if that price is met, it's without engine. However, back then, the price included the engine, now it doesn't. So they admit they'll never get there. The Pentagon, broke the program into two pieces – airframe and engine – beginning in 2011. So now you have to add them separate where before they were tethered and the price included engine.

The F-35 (APUC) Average Procurement Unit Cost (with an engine), as projected by the latest SAR, will be $104.8 million in base-year (2012) dollars, not $75 million. IMHO, that assumed a lot of very good things. Coming down 4% every lot will not do it. They need about a 50% price reduction from LRIP-5 prices - on average - within a few years from now and I can't ever see that happening, IMHO.

But anything is possible. But so far, international orders are mostly AWOL.


User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 20, posted (1 year 4 months 3 weeks 1 day 16 hours ago) and read 4077 times:

Quoting tommytoyz (Reply 19):
Coming down 4% every lot will not do it. They need about a 50% price reduction from LRIP-5 prices - on average - within a few years from now and I can't ever see that happening, IMHO.

Price decreases will depend on the ramp up of F-35 production. The next lot is (LRIP Lot 8) is already going to be 1/3 larger than the Lot 7 was (and long term lead items have already been ordered for the full 48). LRIP lot 8 is the final Low Rate Production Lot, with full rate production starting after that. After that, F-35 production will be ramped up, significantly.

The F/A-18 E/F is an excellent example of how unit pricing changes due to production ramp ups. Per the F/A-18 E/F SAR, total program cost of a F/A-18E/F in 1997 was $178.51 million dollars (2142.2 million divided by 12 aircraft) in BY2000 dollars, when the aircraft first started production. By 2004, total program cost of a F/A-18E/F decreased to $69.52 million dollars (2920.1 million divided by 42 aircraft). in BY2000 dollars.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 21, posted (1 year 4 months 3 weeks 1 day 8 hours ago) and read 3998 times:

Quoting ThePointblank (Reply 20):
total program cost of a F/A-18E/F

That's the wrong metric to use. You can not compare PAUC with APUC, two different things. APUC vs. APUC is apples to apples:

The F-18SH cost is listed as $80.427 million in 2011 US Dollars (TY=2011), including engines, while the F-35 is estimated (yeah right) years away, at $104.8 million US Dollars, with engine, in 2012 US Dollars years from now. That's about a 50% price chop over LRIP-5. Even if that fantasy does occur, it would still be miles more expensive than advertised and over replacement aircraft cost.


User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 22, posted (1 year 4 months 3 weeks 1 day 2 hours ago) and read 3940 times:

Quoting tommytoyz (Reply 21):
That's the wrong metric to use. You can not compare PAUC with APUC, two different things. APUC vs. APUC is apples to apples:

I know, I compared program costs for the F/A-18 E/F over time, not to the F-35 program. You missed that comparison.

Quoting tommytoyz (Reply 21):
The F-18SH cost is listed as $80.427 million in 2011 US Dollars (TY=2011), including engines, while the F-35 is estimated (yeah right) years away, at $104.8 million US Dollars, with engine, in 2012 US Dollars years from now.

Actually, the SAR reports that like F-35, the F/A-18 E/F engine contract is separate from airframe contract. Again, standard DoD practice.

Quoting tommytoyz (Reply 21):
That's about a 50% price chop over LRIP-5. Even if that fantasy does occur, it would still be miles more expensive than advertised and over replacement aircraft cost.

The F/A-18 E/F saw a 38% price drop between start of production, and mid-way through the production cycle. Other systems show essentially the same thing; for example, the Stryker IFV had a unit cost of $3.1 million dollars (22 million divided by 7) in 2000. When production increased a year later to 447 units, it had a unit cost of $2.05 million dollars, a 33% price drop, for what was essentially, a in production vehicle (The Styker IFV was a variant of the LAV III, which was already in production for Canada, Australia and New Zealand).

Want another example? MH-60R. 2004: unit costs of around $86.87 million dollars for 4 units purchased. Forward time frame to 2009: $38.83 million dollars for 30 helicopters. Roughly a 56% price decrease after 5 years once full rate production is achieved.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 23, posted (1 year 4 months 3 weeks 20 hours ago) and read 3891 times:

Quoting ThePointblank (Reply 22):
Actually, the SAR reports that like F-35, the F/A-18 E/F engine contract is separate from airframe contract. Again, standard DoD practice.

APUC of $80 million for the F-18 includes engines. I suggest you reread it.

Quoting ThePointblank (Reply 22):
The F/A-18 E/F saw a 38% price drop between start of production, and mid-way through the production cycle. Other systems show essentially the same thing;

What happened elsewhere, does not mean it will happen with the F-35. The F-18 did not come go 80% over original budget estimates and 7 years behind schedule as the F-35 is today.

[Edited 2013-08-01 21:36:18]

User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 24, posted (1 year 4 months 3 weeks 16 hours ago) and read 3847 times:

Quoting tommytoyz (Reply 23):
What happened elsewhere, does not mean it will happen with the F-35. The F-18 did not come go 80% over original budget estimates and 7 years behind schedule as the F-35 is today.

It shows a trend; unit costs decline as units procured goes up, and as systems leave low rate production.

And with the F/A-18 E/F, they CUT or DELAYED capability in response to issues, not try to fix them immediately. Also, they downloaded many of the costs back down to the original Hornet, by making a number of the systems that were supposed to be developed just for Super Hornet back down to the original Hornet.

We are already seeing steady price decreases without any increases in production. Note that Lots 5/6/7 are of the these quantities: 32/36/35, yet the price goes down 4% for each lot for a presumed $115M for a lot 7 F-35A. The 4% per lot is learning curve effect only! The lots are of similar size.

LRIP Lot 8 with 48 (so far) will be at least 25% larger than Lot 7. Now the production rate effect will begin to kick in as well. Full rate production of the F-35 will drive costs down even more, as FRP is expected in 2018, with at least 100 F-35's built just for the US alone annually. No other recent jet fighter, other than the F-16 has seen that high of an annual production rate.

In addition, once we achieve IOC, it will be possible to switch over to formal Multi-Year Procurement contracts. This is significant, as it will yield serious reductions in price on top of production and learning curve efficiencies.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 25, posted (1 year 4 months 3 weeks 6 hours ago) and read 3787 times:

LRIP-5 costs have been to date:
-- F-35A: $172 million per aircraft;
-- F-35B: $291.7 million per aircraft;
-- F-35C: $235.8 million per aircraft.

Not including retrofit.

To get to $104 million (with engine) - on average - from the LRIP5 level, requires such an incredible price reduction, the like that has never been seem over such a short period of time for large projects, that it's as clear as day that $104 is fantasy.

By the way, what was the original price supposed to be with engine and the performance parameters and the time line? They already missed them all by a huge margin.

I guess the saving grace in all of this, is that eventually, all of this will become apparent, perhaps making this one of the last large defense programs allowed to run amok like this. That's the hope anyway. I also hope foreign nations slam the door on LM's and the US DoD's face. Someone has to stand up to them. You don't want to encourage failure and lies.

Quoting ThePointblank (Reply 24):
s FRP is expected in 2018, with at least 100 F-35's built just for the US alone annually

There is not enough money for that, due to 1) the gigantic costs of the F-35 and 2) lowered defense money available - a double squeeze. The US DoD has already deferred many orders. With less international orders, it only compounds the problem. The F-35 will have an F-22 like end, IMHO. Perhaps a few more built, but far less than originally planned, IMHO.

[Edited 2013-08-02 11:18:13]

User currently offlinetugger From United States of America, joined Apr 2006, 5785 posts, RR: 10
Reply 26, posted (1 year 4 months 3 weeks 5 hours ago) and read 3769 times:

Quoting tommytoyz (Reply 25):
LRIP-5 costs have been to date:
-- F-35A: $172 million per aircraft;
-- F-35B: $291.7 million per aircraft;
-- F-35C: $235.8 million per aircraft.

Is that inclusive or exclusive of ongoing development costs?

Actually I don't need you to answer that as I found the source for your numbers.
http://www.defense-aerospace.com/art...%3E%28updated%29%3C%C2%A7i%3E.html

And it does includes NRE and other development costs. Sure you can say this is all part of the cost but I think you know better on how manufacturing works. Like commercial jet products, the sunk and developmental costs are the not "final cost" of an aircraft production lot (look at how much that first F-35 then cost o the first 787), they are considered investment, long term and must spread over the entire production or counted separately.

Tugg



I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
User currently offlineRevelation From United States of America, joined Feb 2005, 12961 posts, RR: 25
Reply 27, posted (1 year 4 months 3 weeks 1 hour ago) and read 3731 times:

Quoting BigJKU (Reply 14):
If we are going to get hung up on the cost today against the early program cost projections then yes, there is no way anyone could be satisfied with the program. Hell, if we want to drag some people into the streets and shame them publicly I suppose it would not be out of line. But at this point we kind of have to deal with the here and now.

This is the approach you take if you never want to see contractors deliver anything near to budget or schedule.

You may want to ask yourself why Boeing is paying Australia penalties on Wedgetail which had a lot of state of the art tech, integration and packaging issues yet it does not end up having to pay penalties to the US government.

Quoting BigJKU (Reply 14):
The US can either buy the aircraft or not at the price it cost today and the prices it will cost going forward. Everything else is the past at this point.

Not really: LM has a LOT more it needs to deliver and if the past is prologue, us USA taxpayers should be prepared to be screwed just as hard or harder than we've already been screwed.



Inspiration, move me brightly!
User currently offlinetugger From United States of America, joined Apr 2006, 5785 posts, RR: 10
Reply 28, posted (1 year 4 months 3 weeks ago) and read 3724 times:

Quoting Revelation (Reply 27):
This is the approach you take if you never want to see contractors deliver anything near to budget or schedule.

You may want to ask yourself why Boeing is paying Australia penalties on Wedgetail which had a lot of state of the art tech, integration and packaging issues yet it does not end up having to pay penalties to the US government.

There is a big difference in the potential financial risk between a custom made, unique aircraft versus a modified (even if heavily) airframe that has been in commercial production for decades. Boeing has similar risks with the KC-46, aka the KC-767 tanker.

The F-35 is truly cutting edge, there are a lot of elements that are difficult and new and that were requested/desired by the Pentagon which is why the USG is on the hook for many costs. With that said, I do fully support the new/current current push to FFP contracts for these types of development. It keeps the cost known and upfront versus what we have here where contractors are willing low bid knowing they will be able to recoup excessive promises via later plus up in the contract.

I think the F-35 will be an excellent fighter. I just think it has been burdened with too much "everything capabilities" up front. If it were bought and sold as the original basic F-16 was, it would be a screamer, and then more capabilities would be added over the years. But that is not the way it was done and we are nearing the end game on its development.

Tugg



I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 29, posted (1 year 4 months 2 weeks 6 days 23 hours ago) and read 3708 times:

Quoting tugger (Reply 26):
Quoting tommytoyz (Reply 25):
LRIP-5 costs have been to date:
-- F-35A: $172 million per aircraft;
-- F-35B: $291.7 million per aircraft;
-- F-35C: $235.8 million per aircraft.

Is that inclusive or exclusive of ongoing development costs?

No, it does not include those costs. APUC expressly excludes that.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 30, posted (1 year 4 months 2 weeks 6 days 23 hours ago) and read 3710 times:

Quoting tugger (Reply 28):
we are nearing the end game on its development.

6 more years to at least 2019 to become fully combat capable. And those capabilities are not even known yet. The bar keeps getting lowered as testing and development continues.


User currently offlinetugger From United States of America, joined Apr 2006, 5785 posts, RR: 10
Reply 31, posted (1 year 4 months 2 weeks 6 days 23 hours ago) and read 3707 times:

Quoting tommytoyz (Reply 29):
No, it does not include those costs. APUC expressly excludes that.

Did you read your source?

Quote:
One contract, worth $485,000,000, is for LRIP 5 “non-recurring requirements,”

Additionally the source article implies that "cost plus incentive fee" means only that costs will go higher, yet the incentive fees only come into play if cost or time frame (which is money) decreases. They reference a PW contract which PW has agreed to assume cost overruns. It has incentive fee clauses though for if they beat and meet incentive clauses but is otherwise capped at the contract value. It makes me think they do not understand what they are writing.

Tugg



I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
User currently offlineRevelation From United States of America, joined Feb 2005, 12961 posts, RR: 25
Reply 32, posted (1 year 4 months 2 weeks 6 days 21 hours ago) and read 3678 times:

Quoting tugger (Reply 28):

There is a big difference in the potential financial risk between a custom made, unique aircraft versus a modified (even if heavily) airframe that has been in commercial production for decades.

The main difference is in who is accepting the risk.

Keep in mind that F-35 had a flying prototype to de-risk the program.



Inspiration, move me brightly!
User currently offlineThePointblank From Canada, joined Jan 2009, 1857 posts, RR: 0
Reply 33, posted (1 year 4 months 2 weeks 6 days 20 hours ago) and read 3673 times:

Quoting Revelation (Reply 32):
Keep in mind that F-35 had a flying prototype to de-risk the program.

Not really, it was more of 'proof of concept', especially for the lift-fan design. The X-35 reused a lot of components from existing aircraft (for example, the displays inside the cockpit were from a C-130), while F-35 has all new systems designed specifically for it.

Lockheed Martin's magazine had an article comparing the two is below, and it goes pretty in depth:

http://www.codeonemagazine.com/article.html?item_id=28


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 34, posted (1 year 4 months 2 weeks 6 days 18 hours ago) and read 3646 times:

Quoting tugger (Reply 31):
Did you read your source?

Quote:
One contract, worth $485,000,000, is for LRIP 5 “non-recurring requirements,”

Yes I did, I always do. Nonrecurring cost "requirements" are not development costs. The development costs are extra. There is a development budget for that.


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