Will Lockheed Martin Cuts Boost F-35 Sales Overseas?
In the world of high-tech fighter planes, operating costs for the long term have to be considered by officials in the Pentagon and defense departments everywhere. For that reason, Lockheed Martin (NYSE:LMT) went back to the drawing board and came up with a more affordable version of its F-35 logistics and operations system, Reuters reports. The plane could bring Lockheed more contracts that were expected to go to rival aircraft manufacturers.
The solution Lockheed Martin came up with was nearly 40 percent less expensive than the previous model for the F-35 logistics and operation, the news outlet reports. Pentagon officials were able to reduce their estimates from more than $1 trillion to $857 billion as a result of the development. Because the high costs put some of the fighter jet business in jeopardy, Lockheed Martin had gone back to the workshop in hopes of developing a more viable system.
The effort paid off, leading to the thought that the deal Boeing (NYSE:BA) made with the South Korean government for F-15 fighters could be brought back under the magnifying glass. Lockheed Martin’s ability to save the Pentagon hundreds of millions in operating costs could prompt South Korea to reconsider the $7.4-billion bid it is said to have accepted in a contract for Boeing military aircraft earlier in the week, according to separate Reuters reports.