Germany’s Formal Buy of F-35s Raises a Pressing Question; Can Lockheed Martin Deliver the Airplanes on Time?

After formalizing its purchase of 35 F-35As to replace its nuclear capable Panavia Tornados Wednesday, Germany must reckon with the possibility that Lockheed won’t be able to start delivering them by the 2027 deadline the deal specifies.

Lockheed’s F-35 sales success throughout Europe and the possibility of further orders spurred by the war in Ukraine has nicely padded its order book. But the increasingly tense geopolitical situation in the Indo-Pacific where Russia is locking arms with China raises the question of whether the company can meet Germany’s 2027 initial delivery date and its other foreign F-35 commitments if Congress decides to dramatically accelerate F-35 buys for the U.S. Air Force and Navy?

Given the world situation and the state of the USAF in particular, this looks increasingly possible. The compromise 2023 National Defense Authorization Act (NDAA) which was slated to go before the Senate this week would authorize purchase of 69 F-35s in 2023 (38 F-35As, 15 F-35Bs, 16 F-35Cs).

In November, the Pentagon revealed that it was $1.4 billion short of funds for the next major contract to buy F-35s. While the House version of the NDAA made up much of this gap, DoD and Lockheed are closing in on what is expected to be a contract for 375 aircraft in the F-35’s 15th through 17th production lots. Even if that number is achieved, it’s substantially less than the 485 planes the Pentagon anticipated authorizing in 2019.

Shrinking U.S. buys might be read to indicate relaxed pressure on Lockheed’s production capacity, freeing it to meet international order timelines more easily. But the undeniable hole in U.S. Air Force fighter capacity and the risk it is creating as events in the South China Sea and the Pacific in general unfold could very well spur crisis orders from the Pentagon in the next few years.

What’s the state of play of F-35 production? Lockheed spokesperson, Alison Orne Mckibbin, repeated the familiar refrain that F-35 delivery and schedule discussions are a part of the government-to-government process. She affirmed that Lockheed “will deliver upon the final commitment made between the governments.”

Currently, “deliveries are expected to remain in the 147 to 153 range for the next couple of years,” Orne McKibbin says. “We will then achieve our 156 aircraft delivery target in 2025 and anticipate annual deliveries of 156 jets beyond 2025 for the foreseeable future.”

A 156-jet threshold for the remainder of this decade suggests there very well may a potential production crunch if the U.S. decides (or is forced to decide) it needs more airplanes. Consider that Germany, Poland, Switzerland, Finland, Canada and Singapore are all new F-35 customers whose orders have not been fulfilled and who expect deliveries to begin in this decade.

Between them and South Korea which has contracted for 40 airplanes (six of which have thus far been delivered) these foreign customers have ordered 296 aircraft according to Lockheed. The delivery dates for these customers commence in this decade starting in 2024.

Let’s assume their deliveries constitute an eight-year run. If all of the aircraft on order are delivered by 2032, that’s 37 F-35s per year to meet these contracts. That does not include currently scheduled production for Japan, Israel, Australia, Norway, Italy, the Netherlands, Denmark, Belgium and the United Kingdon. On top of these, the Czech Republic and Spain are real possible near-term new customers.

While Lockheed has not specified whether the above demand plus a projected annual output of 65 to 85 F-35s for the U.S. adds up to its anticipated 156 per-year production number, it would seem logical. It would also seem to suggest there’s little headroom for additional production, particularly given the pandemic related supplier shortages and inflationary pressures Lockheed has cited as important factors in its production mix.

There are caveats including the capacity of F-35 Final Assembly and Check-Out (FACO) facilities in Cameri, Italy and Nagoya, Japan to churn out aircraft. But their production hinges on component supplies from the U.S. There is also the possibility that some foreign buyers like the United Kingdom may curb their final acquisition numbers for financial reasons.

But if that possibility exists, so does the possibility that the international situation may have the reverse effect, spurring them to buy more than their current contracts call for. Could Lockheed meet surge-demand from the U.S. and its other customers if called upon? AeroDynamic Advisory managing director, Richard Aboulafia, isn’t certain.

“I’m not sure why they’re stuck on that production rate limit,” Aboulafia says. “I don’t think it’s structural. It might reflect an unwillingness to invest in more production capacity when the peak rate might only last a few years. Or it might represent a negotiating tactic, helping them to get back pricing power on to-be-negotiated production contracts.”

Lockheed offered no specific information on its potential maximum F-35 production rate though it does confirm that its program of record is now more than 3,000 F-35s in total including U.S. production numbers that may or may not be realized.

“With Germany signing the [Letter of Authorization] this week, its 35 jets will be included in the [total] in January,” Orne McKibbin added.

In order to meet its NATO nuclear weapons sharing commitment, Germany will need its F-35s on time. Its schedule is dictated by the fact that its Tornados are simply out of fatigue-life and must be retired near the end of the decade whether F-35 replacements are ready or not.

German pilots are slated to train with the first German-lot F-35s in the U.S. beginning in 2026. Training will move to Germany the following year, before the Luftwaffe, declares an initial operational capability in 2028.

Defense News reports that this timeline is of high concern for the Germany because it must prepare appropriate facilities at its designated F-35 base, Büchel, near Bonn in the western part of the country. Among other things, F-35s require special hangars with appropriate electrical power and cool, dry air for maintenance. They also require secure special access facilities for mission planning and use of the system’s mission/treat libraries.

Luftwaffe Chief of Staff Lt Gen. Ingo Gerhartz today told Defense News that officials are in the process of contracting a general contractor with experience in building F-35-related infrastructure. The Luftwaffe is driving to expedite the permitting and construction process (which other officials have said can take six or seven years) to meet the envisioned 2027 target.

The German push to ready its facilities adds urgency to Lockheed’s production scheduling and allocation. As the government in Berlin throws energy and resources into making the F-35 operational in Germany by 2028, it may be wise to contingency plan in the event that Lockheed Martin is so pressed by other demands that it can’t deliver on time.