With F-35 deliveries to the U.S. military halted since last July and F-35 production continuing apace, stealth fighters are stacking up on a ramp somewhere.
During an earnings call on Tuesday, Lockheed Martin revealed that between 100 and 120 undelivered jets could be in storage, presumably at its Fort Worth production plant, by later this year.
But where the jets may be sitting idle is not clear, nor are other important questions. On Tuesday, I queried a Lockheed Martin spokesperson as to how many undelivered F-35s it is storing as of this week and where. Lockheed offered no answer as to the number of F-35s in storage nor did it indicate where they are located. The company also declined to make anyone available for an interview.
The backlog stems from delays in completing a Technology Refresh 3 (TR-3) upgrade to F-35s coming off the assembly line attributed to delays in maturing the hardware and software that comprise it.
TR-3 brings improved cockpit displays, more computer memory and more processing power to the F-35, structural enhancements that underpin a highly anticipated follow-on software upgrade called Block 4.
Block 4 will broaden the menu of optional long-range precision weapons that the Joint Strike Fighter can carry, enhance its target identification prowess and most importantly, elevate its already powerful electronic warfare capability.
The TR-3 delays are potentially holding up Block 4 as well as the expected delivery of new F-35s to the Air Force, Navy and Marines, and slowing production deliveries for the stealth fighter’s foreign customers.
Word that there will be a further delay in completing TR-3 development came from Lockheed CEO Jim Taiclet during the investor call that made headlines this week.
TR-3 upgrades were originally scheduled to be completed and TR-3 aircraft ready to be accepted by the military by April 2023. The first jets intended for the TR-3 configuration started rolling off Lockheed’s production line in Fort Worth in July 2023.
But the Services have not taken delivery of them as they cannot be flight tested and approved for acceptance by military pilots without their complete TR-3 upgrades.
According to Taiclet, “…we now believe that the third quarter may be a more likely scenario for a TR-3 software acceptance.”
Unless Mr. Taiclet knows something we don’t, “believing” is tantamount to declaring that the upgrade will not be complete before mid-summer or later. In the meantime, Lockheed is still moving tails down the production line, churning out new F-35s. As noted, by the third quarter 100 to 120 F-35s with incomplete TR-3 upgrades will be resting undelivered somewhere.
Lockheed has targeted a 156 aircraft per annum rate of production. Despite DoD refusing new aircraft, the company is sticking to that pace. A Lockheed spokesperson relayed via email that, “We continue to produce at a rate of 156…”
This leads to a raft of obvious and less obvious questions that have largely not been asked.
They include questions about whether all of the delayed delivery aircraft are in storage at Fort Worth or at another location? How are the aircraft stored? Is the storage all outside? Are the aircraft sealed in any way? Are they grouped together? Are the aircraft visible to reconnaissance/intelligence satellites?
Defense News reported that “New aircraft awaiting TR-3 are now stored at Fort Worth…” but Lockheed would not confirm this. Late yesterday I queried the F-35 Joint Program Office (JPO) about the location of the undelivered aircraft and other questions above.
JPO spokesman, Russell Goemaere, replied that, “For operational security concerns we will not disclose the location of TR-3 aircraft that have not achieved [delivery].”
So, the aircraft currently may be at Fort Worth or they may be elsewhere. How many? Air & Space Forces magazine says industry sources have told it the number is above 60. For context, that’s in excess of three Air Force or four Navy squadrons worth of F-35s.
The JPO would not give a specific figure for how many of the aircraft are currently in storage. However, it noted in a statement that there were 52 TR-3 aircraft contracted for delivery in 2023. “Twenty-one have completed production,” it says. They have not been delivered however. The program office added that there are 148 TR-3 aircraft on contract to deliver in 2024.
Lockheed is presumably completing or has completed the balance of the 2023 jets (21) ordered and, given an even pace of production, would complete 12 to 13 aircraft per month to meet the 148 contracted for in 2024. That would suggest a current combined total of 52 2023 TR-3 airplanes plus approximately 12 more as January winds down for a figure of 64 aircraft in storage or heading shortly to storage.
Lockheed Martin and DoD are attempting to come to an agreement to allow the government to take delivery of incomplete TR-3 F-35s, the logic being that these unfinished airplanes, “will provide valuable capability to the warfighters while TR-3 completes final verification and validation,” according to a statement from the JPO.
But if such a “truncation plan” as the JPO calls it is adopted, further questions arise. Foremost among them is whether aircraft accepted under a such a plan will have to return to Forth Worth in the future to receive both software and hardware upgrades for full TR-3 capability?
Obviously, that would incur further delay and cost to both Lockheed and the government. Despite my query, Lockheed did not provide a current estimate of the number of airplanes that will require TR-3 retrofit.
As the airplanes continue to pile up in storage it is also logical to ask how much that storage is costing and who is paying for it? This is a particularly pressing question if Lockheed is storing the jets on U.S. government property at locations away from its Fort Worth plant.
A number of media outlets have reported that DoD is withholding about $7 million in payments per undelivered aircraft and that Lockheed Martin’s net F-35 sales for 2023 dropped by $400 million. Storing the jets may be a further debit for the company depending on who is footing the bill.
How deliveries will resume is another matter for which we have yet to divine an answer. During the earnings call Lockheed’s CEO asserted that the company expects to deliver between 75 and 110 F-35s this year rather than the full complement it had planned.
Does this mean that Lockheed will deliver 25 to 36 aircraft per month in the last three months of 2024? Does it mean the Services might get 50 airplanes in the first month after deliveries resume? What about the balance of the 148 Lockheed is contracted to produce and deliver in 2024? When can we expect those?
The questions vex Richard Aboulafia, managing director at AeroDynamic Advisory, who related via email, “I’m fascinated by the complete lack of guidance on make-up deliveries. You’ve got all of these aircraft built but not delivered. Why is there so little guidance on whether there will be an acceleration of deliveries when TR3 is done, and, if not, why not?”
What are the implications for the timely completion of Block 4 upgrades? The Joint Program Office did not have an answer. And there’s one more important question which neither Lockheed or the JPO have responded to.
How much has the delivery delay cost the Services in terms of re-programming their operations and planning, and possibly extending the service of aircraft the new jets are supposed to replace?
As Lockheed’s dealer lot fills up, somebody’s got to pay the inventory cost.
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