by Christopher Freeburn | August 2, 2013 9:21 am
Unidentified officials in the U.S. Defense Department tell Reuters that the military does not plan to scuttle Lockheed Martin‘s (LMT) pricey program to develop a new fighter jet.
Budget reductions mandated by federal law could slash Defense Department spending by $500 billion over the next ten years, forcing the military to choose between maintaining a larger fighting force and continuing to develop new weapons systems. Possible program on the cutting block are the development of new stealth bombers and the F-35 fighter jet, which is estimated to cost $392 billion.
Pentagon officials stressed that ending the F-35 program would be highly disruptive to the military, which is relying on the program to replace its fleets of aging jets. Additionally, ten allied nations are participating in the program.
The F-35 program could be delayed or trimmed, but it was very unlikely to be cancelled, according to an analyst from the American Enterprise Institute. Another analyst pointed out that it would cost the military four times as much to maintain the current fleet of jets than to build the F-35.
Critics of the F-35 have pointed to the program’s increasing cost and internal Pentagon evaluations that found problems with the new jet.
Shares of Lockheed Martin were unchanged in Friday pre-market trading.
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