Friday, June 12, 2015

Weird Days for the 'Death Spiral' Eh?

While there's really no question as to how the "Who's Death Spiral is It?" game is going to be inevitably played out from where I'm sitting, it looks like The Borg and their F-18E/F are going to get at least one more year without too much loss of altitude via the generosity of Congress. But that generosity is not being granted exclusively to just the F-18:

The vote was 278-149 in favor of the bill, which drew stiff opposition from Democrats because it uses a war-fighting account to raise defense spending next year. The measure provides $8.4 billion for 65 next-generation F-35 fighters, eight more than requested by the Pentagon, as well as $16.9 billion toward nine Navy ships.
In the Senate, the Appropriations Committee approved a $576 billion defense bill that also boosts spending on the F-35 program and adds funds to speed replacement of a Russian-made engine used to launch U.S. satellites.
The Senate bill would increase the number of F-35s made by Lockheed Martin in Fort Worth to 67 from the 57 requested in fiscal 2016. It would shift $730.3 million to buy six additional Marine models of the F-35 and add $97.6 million that, when combined with other previously approved but unspent funds, would buy four additional Air Force models, according to the bill report.
The Senate measure for the year that begins Oct. 1 would also add about $978 million for 12 F/A-18 E/F Super Hornet jets made by Boeing Co., rejecting the Pentagon’s plan to end Navy purchases of the plane.

Everyone's a winner!

The F-18 buy doesn't bug me all that much. Yeah the Taxpayer pays (again), but it may be worth it, if only as a wedge to help keep LM's F-35 on the cost reduction slope, And its not as if the Navy isn't going to use up the F-18E/Fs they already anyway even after they field the F-35C. Once the Navy catches up to the AF in fully exploiting LO aircraft however, those new F-18s may last years longer than planned: because they just won't be used all that much once it happens.

Speaking of Cost Reductions. 

Evidently the F-35 unit cost is ALREADY dropping due to LM's  ‘Blueprint’ To Drive Down F-35 Costs proactively, instead of just relying on Economic Order Quantities to survive Congress' penchant for micro-management and irrational change:
Initially, the manufacturer expected that it would see the first cost savings during F-35 low-rate initial production (LRIP) lot 9, which Lockheed Martin and the DOD were negotiating at the time of [Lorraine] Martin’s presentation in mid-February. But it realized early benefits while producing LRIP 8 airframes, cutting about $260,000 from the cost of each of 43 fighters that it will begin delivering in 2016. “So that’s not chump change,” Martin declared. “I rolled that cost savings into the offer I made to the government when I negotiated the contract,” which the parties signed last November...

...At the time of the LRIP 8 contract award, Lockheed Martin said the average unit price of airframes for the three F-35 variants was 3.6 percent lower than the LRIP 7 price. The company reports that the LRIP 8 cost of an F-35A for the U.S. Air Force without its F135-PW-100 engine was $94.7 million. The price of an F-35A with its engine was $108 million, which was $4 million lower than Lot 7 prices, according to the Pentagon’s F-35 Joint Program Office (JPO).
Martin said the manufacturing improvements her company is implementing could knock another $780,000 from the price of LRIP 9 jets. Ultimately, the blueprint’s goal is to deliver an F-35 with an engine for $80 million in then-year dollars, accounting for inflation. Martin has generated news by saying the price could be even less. “If this works, and we have confidence that it will, [the government is] potentially willing to invest on the tail end $300 million. With these two sets of investments, that’s what gets us down to under an $80 million aircraft,” she said.


Norway's First F-35 Leving 'Major Mate' for Final Assembly
Let's see what the URF cost of the 2016 F-18E/F buy is going to be in then-year dollars is when the next SAR covering the buy is  released. Should make an interesting comparison. At some point in time the mouth-breathers are going to have deal with the reality and stop amortizing F-35 sunk costs over future buys, but it won't be soon. I think they will want to pretend a little longer, if only because there isn't anything else big to b*tch about.

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