F-35 fighters still highest priority despite budget cuts: Pentagon

WASHINGTON Wed Sep 4, 2013 10:31pm EDT

Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall speaks at the Reuters Aerospace and Defense Summit in Washington, September 4, 2013. REUTERS/Larry Downing

Undersecretary of Defense for Acquisition, Technology and Logistics Frank Kendall speaks at the Reuters Aerospace and Defense Summit in Washington, September 4, 2013.

Credit: Reuters/Larry Downing

WASHINGTON (Reuters) - The Pentagon's chief arms buyer on Wednesday said he did not expect the U.S. Navy to significantly change its plans to buy F-35 fighter jets built by Lockheed Martin Corp (LMT.N), despite mounting pressure on the U.S. military budget.

Frank Kendall, undersecretary of defense for acquisition, technology and logistics, told the Reuters Aerospace and Defense Summit that the $392 billion F-35 Joint Strike Fighter was the U.S. military's highest priority conventional warfare program.

He said the Navy needed the added capabilities that the F-35 offered, noting that other countries were developing their own radar-evading fighter planes, advanced electronic warfare capabilities and other advanced weapons that threatened the U.S. military's ability to "control the air."

"I don't see any indication that the Navy is going to change its plans in any fundamental way," Kendall told the summit.

The Navy and other branches of the military have been mapping out their options if lawmakers fail to reverse mandatory budget cuts and they are forced to implement an additional 10 percent budget cut in fiscal 2015.

One possibility under discussion has been a two-year pause in orders for the F-35C carrier variant, a move that could increase the cost of the remaining aircraft to be bought by the Marine Corps and the Air Force, according to four sources familiar with the issue.

Kendall's strong endorsement of the added capabilities of the F-35 marked a setback for Boeing Co (BA.N), which is offering the Navy upgrades of its F/A-18 Super Hornet fighter in the hopes that it can sell more of those planes.

"The F/A-18 is a great airplane, but it's a fourth generation fighter. The F-15 is a great airplane, the F-16 is a good airplane, but they're fourth generational fighters, and you get a quantum improvement in capability out of the F-35," Kendall said.

Lockheed is building three variants of the F-35 for the U.S. military and the eight partner countries that are helping fund its development: Great Britain, Australia, Canada, Norway, Italy, Turkey, Denmark and the Netherlands. Israel and Japan have also placed orders for the new jet.

Kendall said Pentagon leaders next month would assess a new lower estimate of the long-term operating and maintenance cost of the jets recently prepared by the F-35 program office.

He said he expected a drop in the previous estimate of $1.1 trillion, but perhaps not one quite as steep as the projection by the F-35 program office, which now estimates it will cost $857 billion to maintain a fleet of 2,443 jets for 55 years.

He acknowledged that a decision to reduce the size of the U.S. military spurred by the budget cuts could lead to a reduction in the total number of jets to be purchased, but said those decisions were still several years off.

In the meantime, he said the Pentagon was focused on increasing the production rate so that the price of each airplane would come down.

Kendall said the F-35 program was making progress, as was the complex pilot helmet built by a joint venture of Rockwell Collins (COL.N) and Israel's Elbit (ESLT.TA), which fuses data from the many sensors on board on the plane.

He said the Pentagon hoped to be able to use the primary helmet, but it was continuing to fund work on a less capable alternative being developed by BAE Systems (BAES.L) in case the other helmet did not advance quickly enough.

He said he also remained concerned about bringing the cost of the primary helmet down.

Follow Reuters Summits on Twitter @Reuters_Summits

(Additional reporting by Paige Gance; Editing by Ros Krasny, Lisa Shumaker and Edwina Gibbs)