February 14, 2012 / 5:30 PM / in 7 years

UPDATE 1-Italy cuts spending on F-35 fighter plane

* Italian newspaper said Italy to reduce F-35 order by 40

* Defence min to address parliament about cuts on Wednesday

* Min says Italy still committed to Joint Strike Fighter

ROME, Feb 14 (Reuters) - Italy will cut investment in Lockheed Martin Corp’s F-35 stealth fighter plane as part of an overall reduction in military spending, Defence Minister Giampaolo Di Paola said on Tuesday.

“The F-35 was revised like all the other weapons programmes,” Di Paola said after a Cabinet meeting that approved the military spending plan.

Di Paolo said he would give further details of cuts to the supersonic jet programme during testimony before the joint Senate and Chamber defence committees on Wednesday.

The fighter “is still an important commitment” for the country’s defence system, he added.

In 2002 Italy said it would order 131 supersonic warplanes by 2018, but since the start of 2012 Di Paola has repeatedly said he was reviewing the programme as part of Prime Minister Mario Monti’s austerity plan to shore up public accounts.

The defence cuts were announced the same day as Italy refused to guarantee funding for Rome’s bid to host the 2020 Olympic Games.

“The turbulence of the financial markets doesn’t allow us to ignore the difficult financial situation” of the country, Monti said in reference to the decision not to back the Olympic bid.

Italy will ask for about 40 fewer planes, Il Sole 24 Ore daily reported on Tuesday, without citing its source.

Italy’s planned spending cuts follow those confirmed by the United States on Monday.

The Pentagon postponed orders for 179 F-35 Joint Strike Fighters over the next five years to save $15.1 billion. It is the third restructuring by the United States in recent years of the F-35 project, which is its biggest current weapons programme.

The slowdown in production will lead to an overall higher average cost for the fighters, Tom Burbage, head of Lockheed Martin’s F-35 programme, said in Norway on Tuesday.

Italy’s state-owned defence company Finmeccanica is one of the subcontractors on the project. Finmeccanica’s Alenia unit will assemble the planes purchased by Italy, the Netherlands and Norway.

Finmeccanica shares fell more than 2.3 percent after Di Paola announced the cuts.

Northrop Grumman is responsible for about 25 percent of the F-35 program, and Britain’s BAE Systems has about 17 percent.

Di Paola said the country remained committed to the programme both because the F-35 will replace Italy’s increasingly obsolete fighter force, and because of its industrial importance.

“More than 20 companies have won contracts and there are about 10,000 potential jobs” linked to Italy’s portion of the aircraft’s production, he said.

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