via Defense Industry Daily...
The Pentagon lowered the forecast procurement cost 
of the F-35 program by 2 percent today – that’s $7.5 billion in savings over a roughly $400 billion program. The fighters are slated now to cost a mere $159.2 million per copy, if the military does indeed purchase 2,457 of them.
Good news huh? The Pentagon announcement was Friday, but earlier in the week we heard this from DoD Buzz...
The cost to develop and build the Joint Strike Fighter fleet rose 1.88 percent over the past year because of delays in the production line and failures of the engine producer to bring down costs, said Lt. Gen. Chris Bogdan, F-35 Program Executive Officer.
The cost of the program rose by $7.4 billion to $398.58 billion in 2012-year dollars, according to the Pentagon’s Selected Acquisition Report that is released each year to Congress. The increase in costs means tax payers will end up paying $162 million for each fifth generation fighter jet by the end of the program at the current rate.
Bogdan blamed the increased costs on the decision to push back production of the F-35 and failures by Pratt and Whitney, the company building the fighter jet’s engine. The costs of the JSF engine increased by $4 billion, Bogdan said.
So which one is it? Did the cost go up or is it going down? Do they even know or are we the "human terrain" that is being manipulated, spun, lied to (accounting gimmicks are lies) and deceived?
I have estimated that my lifetime beer cost will decrease by two percent, and I also intend to drink more beer. Now that depends upon inflation and the price of beer, and it makes no sense, but what the hell if the Pentagon can play with funny numbers so can I. Pass the pitcher!
ReplyDeleteThis is why the Pentagon doesn't do audits -- to permit this ridiculous sort of marketing baloney. Actually they don't know what anything costs, and don't care. Why should they? Where is Senator Proxmire when we need him. Proxmire would love the F-35. His most famous "Golden Fleece Award" was for a Pentagon contract that paid $400 per hammer and $1,200 per toilet seat.
Esoterica... Most of the decline in costs cited in the DoD and Lockheed Martin press releases came from adjustments in the inflation assumptions and labor rates - two variables affected by economic conditions, and not by direct actions of either the program office or the manufacturer or subcontractors - in other words, on paper. The cost of building the airframe actually went UP by $4.4B.
ReplyDeleteI would take all these long term extrapolations with a grain of salt. A small change in input variables over decades can create massive swings in results. Remember back in 2000 when the Congressional Budget office said the US would run huge budget surpluses as far as the eye could see? That was because they assumed the US economy would grow at 4 percent a year forever, and that the days of the business cycle were over. A model is only as good as the inputs and assumptions.
ReplyDeleteSol, the USD is climbing in value at this small period of time, so there are going to be "cost savings". Both can be true, the price increase from the engine is written over by the climb in the USD. Unfortunately, the market is not a stable system, so once the trend reverses, they F-35 will "start costing more".
ReplyDeleteInteresting thing is that no one lied, the system is simply that unstable. Welcome to the "free market".
The principal conversion change impact is the weakening of the euro (and other currencies) v. the dollar which will jack up the already exorbitant price of the F-35 and put a huge damper on any foreign sales, which are essential to the life of the flying sausage.
ReplyDeleteAin't that a shame.
My tears fell like rain.
--the Fat Man
Euro per 1.00 US Dollar Graph - one year
http://warisaracket.org/eurovdollar.jpg
Speaking financial, even the financial press has been in on the recent F35-bashing, and Andrea Shalal from the Reuters financial house hasn't been able to keep up.
ReplyDeleteAnother potential fly in the Lockheed honey-pot is that peace might break out in the Middle East. The instability and Iran-hating has been a boon to foreign military sales, especially to Saudi Arabia. US--SA, the world's largest arms exporter sells to the world's largest arms importer. Sweet. But what about the possible nuclear agreement with Iran?
The Intercept
The possibility of an Iran nuclear deal depressing weapons sales was raised by Myles Walton, an analyst from Germany’s Deutsche Bank, during a Lockheed earnings call this past January 27th. Walton asked Marillyn Hewson, the chief executive of Lockheed Martin, if an Iran agreement could “impede what you see as progress in foreign military sales.” Financial industry analysts such as Walton use earnings calls as an opportunity to ask publicly-traded corporations like Lockheed about issues that might harm profitability.
Hewson replied that “that really isn’t coming up,” but stressed that “volatility all around the region” should continue to bring in new business. According to Hewson, “A lot of volatility, a lot of instability, a lot of things that are happening” in both the Middle East and the Asia-Pacific region means both are “growth areas” for Lockheed Martin.
Continuing instability -- that's the ticket.
That was in January, and LM stock has been virtually flat since then compared with the longer term.
graphs, three months and one year. It's about to go down.
http://finance.yahoo.com/echarts?s=LMT+Interactive#{%22range%22%3A%223mo%22%2C%22scale%22%3A%22linear%22}
http://finance.yahoo.com/echarts?s=LMT+Interactive#{%22range%22%3A%221y%22%2C%22scale%22%3A%22linear%22}
Simple, the price rose but recently they found some BS way to "save" roughly the same amount of money so now the price "dropped". In reality, it just returned to what it was before it rose; there is, was, and never will be, any cost savings on this asinine, expensive, POS aircraft.
ReplyDeleteDifference in perspective is the difference between Program and Procurement.
ReplyDeleteI like the way the US reports its Programs: You total the whole amount of development and include the costs to the manufacturers and contractors as well. This is good because it gives future planners an idea of how much a development costs all-up. What the tax payer pays covers would be a part of this.
Procurement cost is different: How much are your services actually forking out for things with taxpayer money.
Given LM and P&W are covering 100% of cost overruns and 50% of concurrency costs, it's possible for them to have delays that are their fault which drive up the cost of Production, but because they've agreed to cover these cock-ups the Procurement costs being paid for with taxpayer funds remain in line with what was contractually agreed.
e.g. A new way to apply paint without needing to pull the aircraft out of the line and into a clean room is one of the cost saving measures that's meant to drop the cost of the aircraft. Let's say LM cock-up this new process and have to strip paint and reapply to the first few aircraft, although otherwise the new paint process is a success after that. This is an overrun that LM have to cover themselves out of their own pocket, but the cost of re-work still has to be reported to the Program Office.
Program costs go up but Procurement cost still comes down.
your assertion has no basis in reality. the airplane has had nothing but "cockups" yet Lockheed Martin has been extremely profitable over the course of the planes development! how could this happen if they actually had to pay for mistakes? the delays alone in software should have that corporation in the red yet as i have already stated they're extremely profitable.
ReplyDeleteits should be obvious to all that we're seeing something that makes the fraud seen in the housing debacle look downright legal.
but the bigger problem is that the Pentagon is squandering its credibility.
you're smoking crack and defaulting to a position that all is well. your normalcy bias should have seen you dead by now. i am constantly amazed by the ability of people to rationalize irrational actions or deeds. yeah. people are lying. the program office is here to help only themselves and they're not a guardian of the people's trust.
ReplyDeletefrom what i've read the Gripen is no more advanced and in some ways a step behind the Super Hornet in its best form. so if the Gripen has this result then the Super Hornet should do as well if not better. ditto with the Typhoon and maybe the Rafale.
ReplyDeleteWell, again, depending on scenario. I am sure there was some cherry-picking involved, the results just sound too good. Typhoon is probably even better, but the platform has its own issues. And its not like it is a secret that Super Hornet is the best fighter in the world right now, if you take into account all the specifications, the recent upgrades and maturity of the system. I mean, US Navy is not really "excited" for F-35 and did everything it did to keep SH program afloat for a good reason. Would be nice to have something better, but right now, SH, Typhoon and maybe Rafale are the best fighters money can buy. Well, and Gripen apparently.
ReplyDeletethis is what i hate about the new military....everything is so fuzzed up now that you can't make heads or tails of things. once the US was faced with a huge fleet of F-4's and the Russians came out with the Mig-29 and SU=27. what did they do? they told the public and Congress that we were outmatched. no spin. no equivocating just the cold hard truth that the bad guys had better gear.
ReplyDeletefrom that we developed the Teen series of fighters. why can't they simply do that today. admit that the F-35 became obsolete while in development and that the PAK-FA and J-20 outmatch it and turn to with a new plane?
They are splitting concurrency costs on LRIP 5/6 jets and later. We've already paid for the overruns on the earlier jets, and we are responsible for the modification costs of the early jets as well. Funny how costs become more stable once the contractors actually have a stake to keep them under control.
ReplyDeleteGiven LM and P&W are covering 100% of cost overruns and 50% of concurrency costs...
ReplyDelete“Why, sometimes I've believed as many as six impossible things before breakfast.”
―
Lewis Carroll,
Alice in Wonderland
Feb 10, 2015
CONGRESS PUSHES DoD TOWARD CLEAN AUDIT, via POLITICO’s Jen Judson: “Congress is pushing the Pentagon to ensure the behemoth department is ready for its first-ever audit that will begin by the end of fiscal 2017. The Defense Department, which has spent years preparing to meet the congressional mandate to pass an audit by the end of fiscal 2019, cleared a key milestone last fall by bringing 90 percent of its General Fund fiscal 2015 dollars under compliance. Still, some lawmakers want to set up strict penalties should the DoD fail to meet the rest of the mandate.
“Sens. Joe Manchin (D-W.Va.), Ron Wyden (D-Ore.), Ted Cruz (R-Texas) and Rand Paul (R-Ky.) are pushing new legislation that would come down harder on the DoD if it failed to meet audit-readiness requirements and conversely would offer ‘financial leniencies’ if it stays on track.”
Because money. And because the public will come and ask why they were lied to for so long. And even more, the same public seems to be more interested in welfare, nanny state and food stamps - they will of course won't have the problem with cancellation of F-35, but when the folks in charge of military will come forth and say "Well, now we need tons of money to develop a replacement for failed F-35" - any politician that supports that request will basically be commiting political suicide. Thats what many of the military folk seem to be afraid of - not so much the cancellation of F-35, but the answer they will get when they ask to develop the replacement.
ReplyDelete“Why, sometimes I've believed as many as six impossible things before breakfast.”
ReplyDelete― Lewis Carroll, Alice in Wonderland
“There is no point in using the word 'impossible' to describe something that has clearly happened.”
― Douglas Adams, Dirk Gently's Holistic Detective Agency
LRIP 8 CONTRACT TERMS 2014
LRIP 8 contract terms continue to eliminate the government’s exposure to risk by having Lockheed Martin cover 100% of any cost overruns. The government and Lockheed Martin will share returns derived from any underruns in target cost (20% for government and 80% for Lockheed Martin). The contract also includes a concurrency clause which requires Lockheed Martin to share costs equally with the government (50/50) for known concurrency changes arising from System Development and Demonstration testing and qualification.
1.88% increase represents $140m across a whole year. Easily absorbed by a $40b p.a. company who, if not in the F-35, have had better progress in other areas (think you've covered a numbered of LM ground programs moving ahead globally).
ReplyDeleteNot defending LM (or P&W, or others) in the F-35 development mind, just highlighting difference between Program and Procurement.
Indeed.
ReplyDeleteMig-29 and Su-27 came as an answer to the F-15 and F-16. It was the soviets who played catch up especially after the mid 70ties.
ReplyDeleteF-22 and Tranche 3 Typhoon are the best air superiority jetfighters the west has right now, because they were designed simply for that.
Rafale, Gripen and SH are multi role.
Gosh...I really think we would have been better off upgrading F-22s, builidng new F-16s with upgrades, and developing a new STOVL aircraft (or upgrading harriers). F-16s and Harriers are fine as bomb trucks once SAMs and OPFOR air has been suppressed by F-22s and EA-18Gs. Using F-35s as bomb trucks doesn't seem cost effective.
ReplyDeleteIf costs are not audited, then anybody can say anything and claim it is true.
ReplyDeleteYou may not believe this, but Lockheed has accountants that excel in running circles around a jerk like General Bogdan, and they will never get caught because the accounts are never audited. Do you understand the word audit?
Meanwhile, as Solomon has indicated, Lockheed stock price has risen 25% in the past year on strong earnings, and prospects for higher production of faulty F-35 prototypes thanks to General Bogdan and his staff of propagandists who falsely claim that they are actually holding Lockheed "100%" accountable for something.
The next Bogdan step is, together with Marine Corps leadership, is to declare the fault-ridden F-35 combat capable, which is a farce. And this at a time the DOD IG has found:
Finding A--Insufficient progess has been made toward implementation of the critical safetry item program
Finding B--Oversight of product development and realization of requirements was inadequate
Finding C--The quality assurance organization was not independent and not adequately staffed
Finding D--Reduction of the assembly defect rate was inadequate
Finding E--Corrective action request escalation was inadequate
Finding F--Software quality management was insufficient
Find ing G--Subcontract management procedures were still inadequate
Now these are not cost overruns, these are quality control failures which the US government is going to pay for, one way of the other, because nothing will be allowed to interfere with Lockheed profits. In fact Bogdan & Co. want to increase F-35 prototype production to benefit Lockheed despite problems with the aircraft performance, like the engine can't survive aggressive maneuvers, the computer software is way behind, the Lightning plane may blow up if hit by lightning, etc.
The rational is that the F-35 is not a fighter but an attack jet, and will have to fly accompanied by other fighter jets. The F-35's Pacific operators understand this and will have other jets to protect the F-35. Not so with European NATO members.
ReplyDeleteSolomon
ReplyDeleteThe Gripen is the first jet to be equipped with the Meteor missile, and that may explain the exchange rate in the Gripen's favor.
Japanese and UK F-35s will be equipped with the AESA Meteor, a version of Meteor missile with the AAM-4's AESA seeker. US forces F-35 too will have to carry the AESA Meteor to improve their changes of survival against the Su-35, as the AMRAAM is no longer good enough.
Except for the distinct advantage offered by the Growler and a bit more payload I would not rate SH over the Gripen. The SH in the end, like the F35, is more of a fighter-bomber then a fighter. Look at max G-numbers F35 being limited it seems to 4.5, SH to 7.5 and Gripen to 9, but only by its pilot, the airframe can take a few G's more.
ReplyDeleteWhere the F35 is horrid in certain aspects SH still is decent so preferable, but the Gripen does not have any real weaknesses beyond those that are part of its small stature.
An other point is that Gripen, despite having only 1 engine is among the most safe and reliable planes there is. It also is very cheap to run and support.
In conclusion, to me this Swedish design brimming with American technology is for now the best true fighter you can buy.
So no, SH will very likely NOT do better against the Su35.
I read in an aviation magazine, a wile ago, about a NATO exercise that included Swedish Gripens. The article quoted American pilots ( I believe F15) frustration at how hard it was to detect and eyeball the Gripen because of its very small size. Small size is a form of stealth in itself.
Wile I do not see the US buying Swedish, I do still hope a collapse of the F35 program will force smaller airforces like the Dutch to buy the much more affordable alternative.
I respectfully disagree about the SH being the best plane in the world right now and that certainly is not a readily accepted fact.
ReplyDeleteIn my opinion the Growler variant is unique and as such a huge plus, SH also is a very good fighter-bomber, but... I rate the newest variants of the F15 and F16 as well as Gripen and Rafale higher as all round planes and the Typhoon as a fighter.
SH is lacking in certain parts of the performance envelope, Less then 9G in a modern plane simply won' do. It does seem to make up for this a lil with slow speed maneuverability.
As far as 'non A2A'preformance of Gripen is concerned, I suggest you look in to that a little more. It has a huge pallet of available weapons, bigger then most. Because it is specifically designed with software to do so any missing weapon system can be added much easier then with most other planes.
I know.. I sound like a fan.. and I actually have become one. Partly probably because of my long love for the F16, of which Gripen is the only natural successor, but mostly because of my distaste towards my governments desision to buy 37 F35's instead of the 85 Gripens they could have had for the same or less money.
That wholly depends on the amount of spin put on it by politicians and manufacturers.
ReplyDeleteIt won't be to hard to scare half a nation in to wanting a new plane to defend them against some horrible threat. But that needs one thing to happen beforehand: a very public mea culpa about the F35. About it being unable to do the job AND a huge waste.
Sadly that is exactly what is keeping F35 afloat.. the fear of BOTH PARTIES of having to admit their mistake.
Secondly.... it actually won't need a huge new investment. There are advanced versions of the F15, F16, F18 available to be build that will do the job better and cheaper then the F35. Instead of producing the 1000s of lame ducks just produce the same number .. or more.. of any of them and you in the end spend less.
Even better, but a lil more expensive would be adding several F22's
This is what I would do: Have Boeing build its own version of the Gripen E/F .. even cheaper then any American option.. I would even put them on carriers next to a bunch of new build F18's. Use the savings to reinstate the F22 program.
Because of the very low cost per flight-hour of the Gripen you would have very well trained pilots and money to spare.
If you want to put nationalism in the mix.. replace Gripen by the F16.. but expect slightly inferior results due to its a much older design and higher cost.
Renamed "F39 Griffin" it would be properly american.
ReplyDeleteTo improve it further Boeing could use the EPE evolved version of F414.
With 20% increase in thrust one could possibly add two more weapon stations
and carry the same load as an F16.
what is your avatar???
ReplyDeleteNormalacy bias my f-cking ass, go track the markets and the USD will you? Better yet, go track down your economist friend and ask him how will the USD rise affect the F-35 price before you take your crap out on me?
ReplyDeleteCheck before you shoot. That is basic.
bullshit. how about you go read papers by every watchdog agency that has a view on the F-35 program and you will have to be a stark raving idiot OR on LM payroll to not think that its the worst thing that has happened to the US military since Custers last stand.
ReplyDeletethe keyword here is 'dogfight', yeah, big deal, if we travelled back in time like 30-40 years
ReplyDeleteyou do know that even during the first gulf war there were a number of air to air engagements within visual range.
ReplyDeleteWhy?
ReplyDeleteThere are a very limited number of ways you get in to a dogfight
The first, you dont see the other guy coming
The second, you see other guy coming, but dont shoot
The third, the enemy appears within visual range
The first, is fighting a stealth platform, the second, poor situational awareness, the third, I suppose is an "interceptor", that takes off from concealed bases within visual range and rapidly climbs to dog fighting altitude.
There were dog fights in the gulf war because allied forces werent allowed to shoot them down further out.
I switched off when you fell back to using Appeal to Ridicule as a debate technique again.
ReplyDeleteThe fourth, when your BVR missiles miss/malfunction.
ReplyDeleteThe fifth, when your out of BVR missiles.
I remember reading about to engagement in particular one F-15s vs MiG-29s and one of the MiG pilots panicked and mistook the other MiG as an enemy and shot it down, the other was F-15s supporting F-111s and dealing with Iraqi Mirages (I think I'd have to re read to be sure) when a MiG-25 went through them, the F-15 pilot launched an aim-9 at the Mig and the Mig popped flares which worked so the F-15 launched another aim-9 but by this stage the mig-25 was in full afterburner and simply outran it.
oh and another reason for the first (your list) is simply due to the fog of war, especially true with jamming going on.
The USMC, the RAF and RN were quite happy developing ASTOVL. It was US Congress (civilians) who wanted ASTOVL merged with JAST in '94/'95. A perfectly fine Joint supersonic Strike/CAS/CAP/Intercept STOVL aircraft program ruined by USN and USAF requirements.
ReplyDeleteThat depends on the version and what exactly you're comparing it too.
ReplyDeleteBased on what I've researched, I've drawn to my own conclusions that the Gryphon is a pretty formidable plane for what you pay for. The latest variant has a nasty array of radar and sensors too, no doubt to counter new variants of Sukhois.
What is attractive for the Gryphon is its safety and reliability record. It certainly shatters the prominent fears over one engined planes.
You missed the point, My point was that there was no real cost improvement by LM, the reason the cost went down was from events beyond their control, the USD went up, hence raw materials became cheaper. LM did not generate any savings at all, just claimed credit for market fluctuations. And when the USD stabilizes down again later on, you end up with a "price increase" but I doubt LM is going to highlight that.
ReplyDeleteHence there was no real cost savings, in fact, the cost actually went up (via the engines). It is just hidden in the dollar's upward trend at this time. And when the USD stabilizes downwards again, you end up with a more expensive F-35.
Missiles still miss more then they hit...
ReplyDeleteIt is called blobfish.
ReplyDeletehttp://www.stunninginterestingfacts.com/2013/01/the-blobfish.html
that was kind of my point
ReplyDeleteI know, just agreeing.. lol.
ReplyDeleteF-35 is a multirole fighter. If you fit it for merely dogfighting you're missing the point. F-35 is more or less an aerial support ground attack plane replacing F/A-18s in the Navy and F-16s in the airforce but I have to be honest F-35 should have been given more dogfight capabilities but if it can survive being stealthy why need to have a close in encounter.
ReplyDeleteFor a versus... SU-35 is for F-22, not F-35. And if F-35s stealth technology works against SU-35's then what's the point when F-35s could simply shoot down SU-35s without going through dogfights.