Lockheed, DoD Finalize $11.5B Contract for Lot 11 F-35s; Greg Ulmer Quoted

Lockheed Martin (NYSE: LMT) and the Defense Department have sealed a potential $11.5B deal for the company to build 141 lot 11 F-35 fighter jets for the U.S. and foreign allies.

The contract includes the delivery of 91 low-rate initial production F-35s for U.S. service branches, 28 jets for international partners and 22 units for foreign military sales clients, Lockheed said Friday.

The agreement lowers the price of the F-35A variant from $94.3M per unit to $89.2M, reflecting a 5.4 percent reduction from the previous lot of the fighter jet.

The lot 11 deal also reduces the unit price of the F-35B variant by 5.7 percent to $115.5M and the F-35C aircraft by 11.1 percent to $107.7M.

“As production ramps up, and we implement additional cost savings initiatives, we are on track to reduce the cost of the F-35A to $80M by 2020, which is equal to or less than legacy aircraft, while providing a major leap in capability, said Greg Ulmer, vice president and general manager of the F-35 program at Lockheed.

The defense contractor said F-35 LRIP 11 deliveries will kick off in 2019.

Lockheed and the Pentagon reached a œhandshake agreement for lot 11 F-35s in July.

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