(Adds details, quotes, reaction from companies)
WASHINGTON, April 8 The U.S. Air Force general
who runs the F-35 fighter jet program for the Pentagon said he
expected to reach agreements with both Lockheed Martin Corp
and engine-maker Pratt & Whitney by the end of May for
the next order of fighter planes.
Lieutenant General Chris Bogdan told reporters he expected
Pratt, a unit of United Technologies Corp, to lower the
cost of the engine it builds for the fighter plane by more than
the "weak" 2.5 percent reduction seen in the last contract and
forecast some "tough negotiating ahead."
Bogdan said Pratt had not met any of the targets it set in
2009 for lowering the cost of the engine. He said reduced order
quantities had limited the company's ability to lower costs, but
overhead costs were also likely to blame.
"It's not just the quantities," Bogdan told reporters after
a hearing of the Senate Armed Service Committee's airland
committee. "It's just not going down as fast as I want it to."
The Pentagon's F-35 program office is negotiating contracts
with Pratt & Whitney for a seventh and eighth batch of F135
engines to power the new warplane. It is negotiating a separate
contract with Lockheed for the eighth batch of jets.
The Pentagon finalized a contract with Pratt that was worth
$1.1 billion for 38 engines in a sixth batch last October, which
pushed the cost of the common configuration engine built for the
Air Force and Navy models down by 2.5 percent. It did not
provide the exact cost of the engines.
Bogdan said he hoped and expected to finalize agreement with
both companies around the same, possibly around the end of May,
but said he would "not rush into a bad deal."
Pratt spokesman Matthew Bates said the company had already
cut the cost of the engine by 40 percent, and was continuing to
work on reducing overhead and production costs, but the key to
bigger cost reductions would be to increase order quantities.
Bates acknowledged that the company had not met its cost
reduction targets, but said that was largely because the U.S.
military had scaled back its orders for the new fighter plane in
(Reporting by Andrea Shalal; Editing by Sandra Maler)