18 Aug, 2020 Lockheed Martin could incur costs due to F-35 delaysPosted in Aerospace, Defense & Security
Following the release of a Department of Defense (DoD) memo reporting major delays on Lockheed Martin’s F-35 program are likely;
Harry Boneham, Aerospace and Defense Associate Analyst at GlobalData, a leading data and analytics company, offers his view:
“Lockheed Martin appears to be having difficulties with its F-35 program due to the COVID-19 pandemic and financial releases from the company corroborate reports of slowed delivery rates. Supply chain bottlenecks due in part to the COVID-19 pandemic have set back the delivery schedule; however, the continuing failure to contain the virus in the US will hamper the company’s attempt to make up for lost time.
“According to GlobalData, F-35s account for 33% of contracted multi-role aircraft for 2020, showing the scale of the program. The delays currently anticipated by the DoD may prove costly for Lockheed Martin, with other producers such as Boeing and Huntington Ingalls already incurring COVID-19 related costs on defense programs. The addition of further delays due to continued spread in the US only threatens to worsen the situation.
“The Pentagon estimates that between March 15 and June 15, defense contractors including Lockheed Martin incurred an additional $11bn in COVID-19 related costs.
“While the economic effects of the COVID-19 pandemic have been dire, demand for defense products has not fallen. Rather, in recognition of a coming post-COVID-19 global world order – which is less stable and more dangerous – many states have sought to procure capabilities that secure their strategic interests. Therefore, while deliveries may be slow and additional costs incurred, the future of the F-35 program is not at risk.”