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May 20, 2020 | International, Aerospace

Lockheed slated to miss F-35 delivery target in 2020 as supply chain struggles to keep up

By:   20 hours ago

WASHINGTON — Lockheed Martin will throttle back the pace of F-35 production on May 23, leaving it anywhere from 18 to 24 jets short of the 141 scheduled for delivery this year.

The COVID-19 pandemic has made it more difficult for Lockheed's supply chain to make components on time, and as a result the company is moving to an adjusted work schedule where production will slow over the next three months, said Greg Ulmer, Lockheed's vice president for the F-35 program.

Ultimately, Lockheed aims to accelerate production as soon as possible and hopes to decrease the number of aircraft that will delivered late. However, Ulmer said there are too many variables to say precisely how long buyers will be left waiting for their F-35s.

“If I have the ability to speed up or recover sooner, then I will do so,” Ulmer said. “If there are other unknown COVID-19 impacts that I don't know about that come on the horizon — I don't know that either. ... As we go forward, probably late summer or early fall, we'll have a pretty good sense of where we're going to be.”

Beginning on May 23, Lockheed will divide the approximately 2,500 employees who staff the F-35 production line in Fort Worth, Texas, into three groups, moving them to new schedule where each group works for two weeks and then has a week off. After one three-week rotation, the company will determine whether the system is successful and can either alter the schedule or continue until Sept. 4, it said in a statement.

Rotating smaller groups of employees on the line allows Lockheed to move to a slower pace of operations while at the same time ensuring that workers retain their expertise and don't need to be retrained when the production rate returns to normal, Ulmer said. “It really maximizes our ability to recover production on the backside and retain our workforce with no loss of learning.”

Lockheed Martin executives first disclosed that F-35 deliveries could be delayed during an April 21 earnings call with investors.

“There are local distancing requirements that are being more stringently applied across the globe. There is workforce disruption,” Kenneth Possenriede, the company's chief financial officer, said at the time. “We've actually had some issues with shipping constraints.”

Most of the supply chain pressure on the program stems from constraints on low-tier suppliers that produce components that feed into larger portions of the F-35. While the production line tries to do as much work on each section as possible, workers are having to slow down and wait for missing parts to arrive, Ulmer said.

Lockheed has also had challenges getting connectors for the jet on time — another problem that makes it difficult for the company to merge F-35 sub-assemblies into a finished aircraft, Ulmer said.

Once aircraft are completed and go through acceptance testing, the sequence of deliveries will remain the same, he said.

The slowdown of the F-35's production rate comes days after President Donald Trump voiced support for moving more of the jet's production to the United States. Currently, international partners who helped fund development of the F-35 can compete for work on the jet, reducing the cost of the aircraft and giving foreign buyers an industrial incentive to support the program.

“The problem is if we have a problem with a country, you can't make the jet. We get parts from all over the place. It's so crazy. We should make everything in the United States,” Trump said on Thursday.

However, the industrial challenges currently faced by Lockheed do not appear to be caused by the international supply base. Ulmer said European suppliers, who were hardest hit before the United States, are now rebounding from the pandemic.

“I really see Europe kind of [on the] leading edge of the recovery side of this,” he said.

In particular, northern Italy struggled with high numbers of confirmed COVID-19 cases, leading Italian defense firm Leonardo, which runs an F-35 final assembly and check out plant in Cameri, to shut down operations over a two day period in March to clean the facility. With the number of new cases receding, Italy began reopening nonessential businesses this month.

“Leonardo today is north of 90 percent manned, fully operating. They're pretty much back to normal operations,” Ulmer said.

The ongoing expulsion of Turkish suppliers from the F-35 program is also unlikely to be affected by the production slowdown at Fort Worth, as Lockheed has already identified companies to take over that work, he said. “With the vast majority of those, that alternate sourcing has been accomplished. I really don't see this as an impact to that."

Ramping production back up

Unless COVID-19 cases spike in the coming months, Lockheed believes it will be able to return workers to a normal production schedule in the late summer or early fall.

What will vary is timing for when suppliers can return to their usual production rates, and whether those suppliers have the capacity to expedite the manufacturing of key parts, Ulmer said. Once the supply chain has fully recovered, it will take the Fort Wort line two to three months to resume full rate production.

“There are 1,900 suppliers across the program” in the United States, Ulmer said. “So we take all that information in, we determine what rate they can deliver to, we determine if they have any kind of constraints we can help them deal with, and then we have to balance that into the production system to dial in the production rate we can execute.”

“I am optimistic that the majority of industry is on the backside. I'm reluctant to say that because there could be a rebound,” Ulmer said, “but we're at the very back end of the impact.”

https://www.defensenews.com/breaking-news/2020/05/19/lockheed-to-slow-f-35-production-as-supply-chain-struggles-to-keep-up

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  • Contract Awards by US Department of Defense - May 29, 2020

    June 1, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - May 29, 2020

    ARMY General Dynamics-OTS, Williston, Vermont, was awarded a $3,420,531,156 hybrid (cost-plus-fixed-fee, firm-fixed-price) contract for production and engineering services for Hydra-70 rocket systems. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of Sept. 30, 2026. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity (W31P4Q20F0282). Canadian Commercial Corp., Ottawa, Canada, was awarded a $380,117,626 hybrid (firm-fixed-price, fixed-price-level-of-effort) contract for MX sensor systems product and system support. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of May 28, 2028. U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland, is the contracting activity (W56KGY-20-D-0008). CR Nationwide LLC-Trumble Construction Inc. JV1,* Texarkana, Texas, was awarded a $49,000,000 firm-fixed-price contract for general roof construction. Bids were solicited via the internet with nine received. Work locations and funding will be determined with each order, with an estimated completion date of May 26, 2025. U.S. Army Corps of Engineers, Savannah, Georgia, is the contracting activity (W912HN-20-D-4005). General Dynamics Mission Systems Inc., Taunton, Massachusetts, was awarded a $37,012,955 cost-plus-fixed-fee contract for post-deployment software support services for Product Manager Tactical Network-Mission Network, Tactical Network-Transport On-The-Move systems and equipment. Bids were solicited via the internet with one received. Work will be performed in Taunton, Massachusetts, with an estimated completion date of June 1, 2021. Fiscal 2020 other procurement (Army) funds in the amount of $23,000,000 were obligated at the time of the award. U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland is the contracting activity (W15P7T-20-F-0114). Leidos Inc., Gaithersburg, Maryland, was awarded a $33,302,166 modification (P00032) to contract W58RGZ-17-C-0058 for continued contactor logistics support services in Afghanistan. Bids were solicited via the internet with one received. Work will be performed in Gaithersburg, Maryland, with an estimated completion date of Aug. 31, 2020. Fiscal 2020 Afghanistan Security Forces (Army) funds in the amount of $33,302,166 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. GFP Group LLC,* Corpus Christi, Texas (W911SA-20-D-2014); MDJ Contracting Inc.,* Dallas, Texas (W911SA-20-D-2015); Sames Inc.,* McAllen, Texas (W911SA-20-D-2016); Arevalos Trade Co. LLC,* San Antonio, Texas (W911SA-20-D-2017); and Miami Technology Solutions LLC,* Reston, Virginia (W911SA-20-D-2018), will compete for each order of the $25,000,000 firm-fixed-price contract to provide construction services for a broad range of renovation and construction projects. Bids were solicited via the internet with 14 received. Work locations and funding will be determined with each order, with an estimated completion date of May 31, 2025. The 419th Contracting Support Brigade, Fort McCoy, Wisconsin, is the contracting activity. AECOM Technical Services, Los Angeles, California, was awarded a $24,335,524 firm-fixed-price contract to design the renovation of Sijan Hall, U.S. Air Force Academy, Colorado. Bids were solicited via the internet with five received. Work will be performed in Colorado Springs, Colorado, with an estimated completion date of April 20, 2024. Fiscal 2020 operations and maintenance (Air Force) funds in the amount of $24,335,524 were obligated at the time of the award. U.S. Army Corps of Engineers, Omaha, Nebraska, is the contracting activity (W9128F-20-C-0005). Alliant Techsystems Operations LLC, Plymouth, Minnesota, was awarded a $22,158,960 modification (P00026) to contract W52P1J-17-C-0025 to procure 120mm M1002 new production cartridges for 120mm tank training ammunition. Work will be performed in Plymouth, Minnesota, with an estimated completion date of Dec. 28, 2021. Fiscal 2020 procurement of ammunition (Army) funds in the amount of $22,158,960 were obligated at the time of the award. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity. Digiflight, Columbia, Maryland, was awarded an $18,193,257 modification (000456) to contract W31P4Q-09-A-0012 for programmatic support services for the Apache attack helicopter project office. 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Fiscal 2020 operations and maintenance (Army) funds; and Army working capital and research, development, test and evaluation (Army) funds in the amount of $16,056,757 were obligated at the time of the award. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity. Raytheon Lockheed Martin Javelin JV, Tucson, Arizona, was awarded a $13,842,939 modification (P00047) to contract W31P4Q-19-C-0038 for engineering services for Spiral 3 system qualification of the Javelin missile. Work will be performed in Tucson, Arizona, with an estimated completion date of Sept. 30, 2021. Fiscal 2020 missile procurement (Army) funds in the amount of $13,842,939 were obligated at the time of the award. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. Sauer Inc., Jacksonville, Florida, was awarded a $10,480,000 firm-fixed-price contract for renovation of existing food preparation areas, serving areas and administrative areas. Bids were solicited via the internet with eight received. Work will be performed on Fort Bragg, North Carolina, with an estimated completion date of Dec. 4, 2021. Fiscal 2020 military construction (Army) funds in the amount of $10,480,000 were obligated at the time of the award. U.S. Army Corps of Engineers, Wilmington, Delaware, is the contracting activity (W912PM-20-C-0014). Security Signals Inc.,* Cordova, Tennessee, was awarded a $10,201,843 firm-fixed-price contract for soldier hand-held signal devices. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of May 31, 2024. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity (W52P1J-20-F-0328). Elbit Systems of America, Roanoke, Virginia, was awarded an $8,977,727 modification (P00008) to contract W56JSR-17-D-0017 to ensure continued support for the Army Communications Electronics Command Integrated Logistics Support Center. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of Sept. 25, 2022. U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland, is the contracting activity. WFEL Ltd., Stockport, Cheshire, United Kingdom, was awarded an $8,034,740 firm-fixed-price contract for retrofit kits for the Dry Support Bridge system. Bids were solicited via the internet with one received. Work will be performed in Fort Hood, Texas; and Cheshire, UK, with an estimated completion date of Jan. 31, 2022. Fiscal 2020 other procurement (Army) funds in the amount of $8,034,740 were obligated at the time of the award. 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