F-35 fighter program will feel impact of Pentagon budget cuts

The Fort Worth Star-TelegramDecember 2, 2011 

The stealth design of the F-35 joint strike fighter is supposed to make it nearly invisible to enemy radar, but the super high-tech combat aircraft may not be able to avoid the bull's-eye of Pentagon budget-cutters.

Congress' failure last month to agree on $1.2 billion in additional deficit reduction measures means the Defense Department is facing enormous funding cuts mandated by law.

Without new congressional action to restore funding, experts say, the Pentagon will be forced to make big cuts in spending on new weapons.

And the F-35 is easily the biggest target for cuts because it has a large and growing price tag, rising from a planned $7 billion in new orders in 2012 to $14 billion-plus in 2016.

"When you look at cutting back on programs to save money, you're going to start with the biggest programs," said Todd Harrison, defense budget analyst with the influential Center for Strategic and Budgetary Assessments think tank.

Lockheed Martin officials conceded as much Thursday. Speaking at an investment conference in New York, Bruce Tanner, Lockheed's chief financial officer, said it is unlikely the F-35 can evade the coming budget cuts.

When the biggest funding cuts take effect in 2013, "I have to believe F-35 would build at a lower rate," Tanner said in response to questions at the Credit Suisse conference.

That could be bad for employment at Lockheed's plant in west Fort Worth, where the F-35 is being built.

Lockheed now has 6,100 people working directly on the F-35 program there, spokesman Joe Stout said, about 3,000 of them production workers and the rest in development or other support activities.

Without stepped-up production, employment at the Fort Worth plant won't grow and may decrease. As F-35 development and engineering work begins to wind down, Lockheed may cut workers in those fields without the once-expected, offsetting increases in production jobs.

There is virtually no scenario under which the Pentagon and Congress would kill the F-35 program, analysts say. But under the Budget Control Act of 2011 enacted in August, the defense budget will be cut about $12 billion in 2012, $60 billion more in 2013 and then be nearly frozen through 2021.

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