Lockheed Martin’s F-35 program is slated for national and international cuts that would slow production of the aircraft and could impact the work done at the company’s Marietta plant.
A federal defense budget proposal released this week includes funding for 29 of the fighter jets in 2013, two fewer than this year, and delaying purchase of 179 F-35 planes over the next five years. Italy also reduced its planned F-35 orders this week, dropping its purchase order to 90 planes, instead of the originally planned 131 aircraft, according to news reports.
It’s too early to tell what the impact for the company will be, said Stephen O’Bryan, Lockheed Martin’s vice-president business development for the F-35 program.
Officials at the Marietta plant, where the F-35's center wing is assembled, referred questions to O’Bryan. In September, Cobb Chamber of Commerce and business leaders flew to Washington to lobby lawmakers to keep the F-35 program on track.
Denise Rakestraw, president of the machinists union that represents the Marietta workers, said the information was too new at this point to determine the impact on employees there.
While the Italian cuts are unfortunate, the company plans to mitigate the reductions with other international orders and interest, O'Bryan said. Lockheed has orders from other partner nations including Turkey and Israel, is competing for work in Korea, and won a contract in December to produce the F-35 for Japan. And, the federal government, Lockheed's largest F-35 customer, is still committed to purchasing 2,443 of the planes, O'Bryan said.
"We’re not going to slow down, we’re just not going to speed up. We’re increasing the amount of airplanes we’re going to roll out each year, just not at the rate we thought," he said.
Last year, Lockheed announced 1,500 layoffs, including about 200 employees at its Marietta plant, as part of a company-wide cost-cutting strategy. The Marietta plant has about 7,700 workers, including about 300 who are involved in the F-35 program.
For employees, this week's news should not lead to any huge alarm bells going off, said Bill Hartung, director of the Arms and Security Project for the Center for International Policy, a Washington, D.C.-based think tank.
"The funding for this year has been about the same as last year and Wall Street has been happy with what they've done," he said.
"Last year, when the F-22 ended, the F-35 and the C-130 [programs] covered it, but I'm not sure how they would cover if the F-35 [production] comes down," Hartung said. "So in that sense, people are more vulnerable in terms of less to fall back on."
Information from Bloomberg News was included in this report.
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